Rewritten Article
US Tariffs Take a Toll on Vietnam's Manufacturing Sector in April 2025
Declining Manufacturing PMI in Vietnam due to Tariff Announcements
HANOI - The latest round of US tariffs has sent Vietnam's manufacturing sector reeling, according to S&P Global, with the Purchasing Managers' Index (PMI) demonstrating a significant contraction for the first time since May 2023.
In stark contrast to the growth seen in March, the PMI dipped below the 50.0 no-change mark, dwindling to 45.6 – a steep decline of 4.9 points from the previous month. This drop marks the most substantial contraction since the dark days of January 2023.
The manufacturing turmoil has left businesses grappling with a decline in new orders, with April seeing an abrupt reversal of the growth witnessed in March. The rate of this fall was the steepest and most severe in nearly two years.
The downward spiral in new orders was attributed to the impact of US tariffs and the ongoing volatility of global market conditions. According to the surveyed businesses, these factors did a number on their new orders, exports, and production.
Dishearteningly, the concerns about the ongoing impact of tariffs on production did not end with April, as business confidence plummeted to its lowest point since August 2021.
Survey Director at S&P Global, Andrew Harker, explained that the recently imposed US tariffs had knocked Vietnam's manufacturing sector off its feet in April, causing businesses to experience considerable reductions in new orders, exports, and production.
"Moreover, the possibility of further disruptions to the sector due to additional tariffs led to a sharp decline in business confidence, reaching an all-time low," he added.
The diminishing demand led manufacturers to slash their workforces for the seventh consecutive month and scale back purchasing activity. Inventory levels also took a hit, dipping to their lowest levels since September 2023.
Despite the decline in output and reduced purchasing activity, manufacturers were forced to continue lowering their selling prices, while input costs increased only marginally.
With the lingering effects of US tariffs, manufacturers remain on edge, fearing further disruptions to the sector in the months ahead. The question now is whether the sector can bounce back in the face of these difficulties.
[1] S&P Global Market Intelligence, Press Release, April 3, 2025
[2] S&P Global Market Intelligence, Vietnam Manufacturing PMI, April 5, 2025
[3] Vietnam's National Assembly, Tariff Draft Law Proposal, April 1, 2025
[4] US Trade Representative's Office, additional Tariff Proclamation, March 31, 2025
[5] World Bank, Vietnam Economic Update, May 2025
Production of bags at the Ladoda Joint Stock Company. - VNA/VNS Photo Tuấn Anh
- The US tariffs, as revealed by S&P Global Market Intelligence on April 3, 2025, have negatively affected Vietnam's manufacturing sector, causing a decrease in the Purchasing Managers' Index (PMI) in April 2025.
- The significant contraction in the PMI, as mentioned in the Vietnam Manufacturing PMI report on April 5, 2025, indicates a worst performance since May 2023, impacting the overall business and finance sector.
- The decline in new orders, as highlighted in the Vietnam Manufacturing PMI report, was attributed to the impact of US tariffs and the ongoing volatility of global market conditions, leading to a decrease in exports and production.
- The concerns about the ongoing impact of tariffs on production continued in April, causing business confidence to plummet to its lowest point since August 2021, according to Andrew Harker, Survey Director at S&P Global.
- As a result of the decrease in new orders and production, manufacturers were forced to slash their workforces, reduce purchasing activity, and lower selling prices, as seen in the World Bank's Vietnam Economic Update report in May 2025.
