Amid complex global developments, the Prime Minister has directed ministries to develop response scenarios for potential trade wars, aiming to protect supply chains and maintain the economic growth target of at least 8% this year.
Warnings About Trade War Risks Affecting Vietnam
During the Government meeting on February 5, the Prime Minister expressed concern about the complex fluctuations in the global political and economic situation. The head of Government emphasized that actions from major trading partners such as the US and China are directly impacting Vietnam's economy, particularly exports and business production.
"Such developments would disrupt supply chains and shrink Vietnam's export markets," the Prime Minister assessed, while directing ministries, sectors, and localities to proactively propose solutions and response scenarios.
A report from the Ministry of Planning and Investment has highlighted potential risks that could lead to a "new tariff war" globally. Notably, the US announced a 25% tariff on imports from Mexico and Canada, along with a 10% increase on goods from China effective February 4. China responded immediately, raising the risk of an escalating trade war.
The meeting warning about trade war risks was chaired by Prime Minister Pham Minh Chinh.
Growth Targets and Strategic Solutions
The Government has set a GDP growth target of at least 8%, aiming to build momentum for double-digit growth in subsequent years. To achieve this goal, the Prime Minister suggested revitalizing traditional growth drivers such as investment, exports, and consumption, while promoting new drivers like green economy and innovation.
Effectively Utilizing Free Trade Agreements
The Ministry of Planning and Investment recommends that localities and businesses effectively exploit opportunities from the 17 free trade agreements (FTAs) that Vietnam has signed. The Ministry of Industry and Trade has been directed to accelerate negotiations with partners such as Middle Eastern countries, Switzerland, Norway, and Finland to expand new export markets.
Regulatory agencies need to strengthen support for businesses to meet new export market standards and assist in anti-dumping cases to protect the legitimate interests of Vietnamese enterprises.
Promoting Public Investment and Infrastructure Development
Public investment remains a key driver for achieving high growth targets. In the first month of the year, public capital disbursement reached 35,400 billion dong, an increase of 9.6% compared to the same period last year. The Prime Minister emphasized the goal of completing at least 3,000 km of highways in 2025, launching Tan Son Nhat Airport's T3 terminal on April 30, and substantially completing the first phase of Long Thanh Airport this year.
Key Projects and Expenditure Reforms
The Prime Minister assigned the Minister of Transport to report promptly on the railway project connecting with China and find solutions for BOT road projects. The Minister of Industry and Trade was requested to report on mechanisms and policies for building the Ninh Thuan nuclear power plant and to finalize regulations on direct power purchase agreements (DPPA).
Currently, Vietnam allocates more than 30% of total budget expenditure for development investment, national defense security, and social welfare, while administrative apparatus and recurrent expenditures account for nearly 70%. The Prime Minister has requested reducing the proportion of recurrent expenditures to below 60%, and ministries, sectors, and localities must save an additional 10% of recurrent expenditures in 2025 to supplement resources for the Lao Cai - Hanoi - Hai Phong railway line.
Boosting Domestic Consumption
Besides exports and public investment, domestic consumption is also an important driver for growth. The Government is considering extending tax and fee reduction policies and developing credit policies to stimulate consumption.
Ministries, sectors, and localities need to support businesses in expanding distribution networks and bringing Vietnamese goods to rural and mountainous areas. Promoting e-commerce applications and online business platforms is also an effective solution to expand the domestic market in the context of digital transformation.
With the Government's decisive leadership and the efforts of ministries, localities, and the business community, Vietnam can completely overcome challenges, maintain growth momentum, and continue sustainable socio-economic development.
>> See more: Striving for growth above 8%: Vietnam sets breakthrough economic targets until 2045
