What Does Donald Trump’s Win Mean for Digital Businesses in Vietnam?

Donald Trump’s re-election as U.S. president will likely bring significant changes to the global economic landscape, directly affecting Vietnam’s digital businesses. Trump’s anticipated policies could present a complex mix of challenges and opportunities for a sector that has thrived on globalisation, digital connectivity, and strong international partnerships. As Saigon Digital is a digital business that works with a plethora of international clients, this analysis is our exploration of the potential impacts for Vietnamese digital businesses in the coming years under Trump’s administration, focusing on trade policies, potential tariffs, and the evolving dynamics of United States and Vietnam relations.

Increased Trade Frictions: A Double-Edged Sword

Trump’s approach to foreign policy and trade has often focused on prioritising American interests, which could mean stricter trade policies and a heightened scrutiny of imports. His administration is expected to impose tariffs on imports from various countries, including Vietnam, albeit lower than the steep tariffs imposed on China. These tariffs may pose challenges for Vietnamese businesses reliant on exporting digital and physical goods to the U.S. market, especially in the tech and manufacturing sectors.

While this could complicate the cost structures for digital businesses with US-bound products, it also opens opportunities. For example, with tariffs on Chinese goods potentially remaining high, some U.S. companies may look to Vietnam as a preferred partner, bypassing the added costs of Chinese imports. This trend could benefit Vietnamese digital platforms facilitating trade logistics and tech services supporting cross-border commerce.

Shifts in Manufacturing Create New Growth Avenues

One of the most substantial impacts of Trump’s trade policy may be seen in the manufacturing sector, as businesses look to reduce dependency on China to avoid higher tariffs. Vietnam’s favourable business environment, competitive labour costs, and geographical proximity to China position it as an ideal alternative for manufacturers seeking to diversify their supply chains.

For digital businesses, this could result in several positive ripple effects:

• Expansion of E-commerce Platforms: As production shifts to Vietnam, there will likely be increased demand for e-commerce or similar platforms that connect Vietnamese manufacturers with global buyers and consumers. This opens new growth opportunities for platforms facilitating export-driven e-commerce, potentially driving more significant traffic and revenue to Vietnam. One such platform is Valo Vietnam. Valo Vietnam hit our radar as a potential technology leader for Vietnamese suppliers and buyers internationally looking to respectively export goods globally.
• Enhanced Demand for Digital Marketing Services: With more Vietnamese products entering the global market, demand for digital marketing services tailored to U.S. consumers may surge. Digital agencies specialising in export-orientated marketing strategies, SEO, and content marketing could experience growth as Vietnamese companies seek to establish brand visibility overseas.
• Investment in Tech Infrastructure: Increased foreign direct investment (FDI) into Vietnam could also lead to greater tech infrastructure development, enhancing local digital businesses’ capabilities. This investment may bolster Vietnam’s tech ecosystem even further, offering opportunities for digital companies to scale operations and innovate with new technologies.

Challenges and Regulatory Pressures for Digital Businesses

While the shift in manufacturing to Vietnam could create growth avenues, it also comes with challenges. Vietnamese businesses could face heightened competition as Chinese companies relocate to Vietnam to avoid U.S. tariffs. This could drive down profit margins and pressure local firms to differentiate their offerings. This means staying agile and maintaining a competitive edge for digital businesses by focusing on customer-centric experiences, enhanced technology, and robust marketing strategies.

Another potential challenge is the increased scrutiny of the origins of exports. The U.S. government may implement stricter regulations to prevent Chinese companies from routing products through Vietnam to circumvent tariffs. This could complicate supply chains and increase operational costs for Vietnamese digital businesses involved in export-orientated activities. To maintain compliance, digital businesses must ensure transparent supply chains and may have to invest in regulatory compliance measures to avoid penalties.

The Role of Currency and Economic Stability

Trump’s re-election could lead to policies that strengthen the U.S. dollar, which may have implications for the Vietnamese dong. A stronger dollar could make Vietnamese exports more expensive for U.S. buyers, potentially affecting profit margins. For digital businesses that rely on international transactions, currency fluctuations could introduce an element of financial risk.

To navigate these challenges, Vietnamese digital businesses may benefit from strategic currency management practices, such as pricing adjustments or hedging strategies, to mitigate the impact of fluctuating exchange rates on their bottom lines.

Potential for Long-Term Economic Relations and Resilience

Despite the possible hurdles, Vietnam’s strong economic relationship with the U.S. provides a stable foundation for growth. The U.S. has recognised Vietnam as a reliable partner, especially in its shift away from reliance on Chinese manufacturing. American consumers are increasingly receptive to “Made in Vietnam” products, and this growing trust could mitigate some of the adverse effects of tariffs.

For digital businesses, this trust means potential new customers in the U.S. market and opportunities to expand into other industries, including education, healthcare, and digital financial services. Vietnamese digital companies can maintain their growth trajectory despite external pressures by adapting to regulatory and trade changes and focusing on delivering high-quality services.

Trump’s $1.5B Investment in Vietnam: Boosting Digital and Tech Sectors

Donald Trump’s recent re-election has coincided with a significant investment announcement by the Trump Organisation, pledging $1.5 billion for a luxury golf, hotel, and residential complex in Vietnam’s Hung Yen province. In partnership with Vietnam’s Kinh Bac City Development Holding Corporation, this high-profile investment is poised to influence various sectors, including digital businesses, positively. Here’s a closer look at the potential ripple effects on Vietnam’s digital landscape:

Digital Opportunities in E-commerce, Marketing, and Real Estate Technology

1. E-commerce and Tourism: Increased foreign interest could drive demand for platforms that promote local products and services to tourists. E-commerce sites featuring Vietnamese goods and services tailored to international customers may see a boost as more high-end consumers visit the region.
2. Digital Marketing Services: With heightened interest in the project, local digital marketing agencies will have opportunities to work with global brands to promote events, tourism, and real estate offerings. Specialised campaigns targeting high-net-worth individuals could become highly valuable.
3. Real Estate Technology: The luxury real estate component of the Trump project could spur innovation in property technology (prop-tech) solutions. This includes digital platforms for virtual property tours, secure online transactions, and data-driven real estate insights, creating a market for digital businesses offering these solutions.

Strengthening Vietnam’s International Investment Image

This investment brings capital to Hung Yen and strengthens Vietnam’s profile as a welcoming and viable investment destination for luxury projects. The endorsement by a high-profile international entity could catalyse further investments from other global corporations. Vietnamese tech companies can leverage this positive international image to attract clients and investors interested in entering the Southeast Asian market, leading to an expanding ecosystem of tech partnerships and investment opportunities.

Infrastructure Growth and Improved Digital Connectivity

The Trump-Kinh Bac partnership is expected to improve infrastructure in and around Hung Yen. Increased transportation, industry, and urban development funding will enhance regional connectivity, benefiting the entire digital ecosystem. Digital businesses, from startups to large tech firms, will likely benefit from this strengthened infrastructure, which can support higher-speed internet, expanded digital services, and better logistics for e-commerce.

This strategic partnership between the Trump Organisation and Kinh Bac highlights the potential of the U.S.-Vietnam relationship in fostering substantial investment and growth.

Strategic Adaptations for Vietnamese Digital Businesses

Given the changing dynamics, digital businesses in Vietnam can take proactive steps to harness the opportunities and mitigate risks. Here are several strategies for digital business resilience and growth:

1. Diversify Markets Beyond the U.S.: While the U.S. remains a key trading partner, expanding into other markets can help reduce the impact of U.S.-centric trade policies. Digital businesses should consider tapping into the European, Japanese, and South Korean markets, where demand for Vietnamese products is also growing.
2. Invest in Compliance and Transparency: As the U.S. scrutinises Vietnamese exports’ origins, digital businesses should ensure transparent operations and robust supply chain documentation. This could help avoid regulatory complications and maintain a positive relationship with U.S. partners.
3. Leverage Local Expertise: Digital agencies with expertise in U.S. compliance and market entry strategies can offer a competitive edge. Vietnamese companies seeking to enter or expand in the U.S. market would benefit from partnering with firms that have an in-depth understanding of regulatory requirements, marketing strategies, and consumer behaviour.
4. Adapt to Digital Transformation: By investing in technology and innovation, digital businesses can stay competitive and responsive to changing market conditions. Embracing AI, automation, and big data can enhance operational efficiency while providing a more personalised experience for global customers.
5. Focus on Sustainable Growth: Vietnamese businesses should emphasise sustainable growth strategies for long-term resilience. This involves balancing growth with scalability, maintaining financial stability, and investing in employee training to build a workforce equipped to handle international expansion.

Trump’s re-election brings both challenges and growth potential for Vietnamese digital businesses. While trade policies may present hurdles, they also offer unique opportunities for businesses that are prepared to adapt and innovate. With U.S. companies likely to continue diversifying away from China, Vietnam has the potential to further establish itself as a valuable trade partner in global supply chains.

If Vietnamese digital businesses can withstand these changes, they have the potential to thrive in the evolving global marketplace by focusing on compliance, market diversification, and technological advancement.

At Saigon Digital, we support your journey in navigating these complex dynamics. Whether you’re looking to expand into new markets or strengthen your digital infrastructure, our team of in-house experts are ready to help you succeed in the changing global landscape. Contact us today to explore how we can drive your business forward in these transformative times.