In April, Vietnam landed in the line of fire as the U.S. announced a 46% reciprocal tariff targeting Chinese-made goods. Unsurprisingly, Vietnam stands to lose significant momentum in the fallout.  It previously benefitted from initial tariff volleying between the U.S. and China in 2018, maintaining trade relationships with both countries. U.S. supply chains relocated to cheaper and more stable Vietnam, increasing trade surplus and fueling rapid economic growth. Now a direct target, Vietnam’s demonstrated adaptability will be key in maintaining the momentum it painstakingly cultivated.   

This leaves Vietnam’s cleantech ecosystem especially vulnerable, with goods like semiconductors, new materials, and solar PVs being targeted. Its resiliency relies on its ability to adapt opportunities for new technologies and relationships to map new growth trajectories.  

Firing On All Fronts: A Brief Overview of the Vietnamese Cleantech Ecosystem 

Vietnam’s cleantech ecosystem quickly capitalized on its strategic positioning and growing economy. Public sector actors leveraged local flourishing solar PV production to enact large-scale energy reform through targeted renewables-focused policy initiatives: 

• Recent iterations of Power Development Plan VIII (PDP8) and the National Action Plan for Renewable Energy & Circular Economy emphasize increased renewable energy generation, aiming for compete coal phaseout by 2050 and 28-36% renewables share by 2030, with 50% of office buildings and residences utilizing rooftop solar power. 

• Competitive trading mechanisms through market liberalization and pricing transparency via the Electricity Law Reform help mitigate regulatory barriers to renewables penetration and grid reform.

• The Hydrogen Energy Development Strategy targets a production goal of up to 20M tons by 2050 for power, transportation, production, and manufacturing use. This is backed by supportive tax incentives like exempted and reduced maritime use fees over the course of hydrogen project development and local government mandates prioritizing green ammonia-based projects. 

Motivated by high-level support, private sector established key cleantech-focused actors at multiple stages of start-up growth with academia leading R&D efforts and dedicated cleantech investors providing financial and developmental support: 

• Phenikaa Group: Corporate investor for environmentally-aligned advanced materials and high-grade eco-materials among other manufacturing related subsectors. Their Phenikaa Innovation Fund targets relevant science- and technology-based start-ups and research projects.

• Earth Venture Capital: Early-stage investor and start-up builder with focuses on new energy, new materials, and machine learning, often supporting product development as well. 

• Touchstone Partners: VC focusing early-stage technology-based impact start-ups contributing to Vietnam’s ESG landscape. They’ve cited a specific focus on climate tech. 

• Saigon Hi-Tech Park Incubation Centre (SHTP-IC): Early-stage incubator for high-tech start-ups within new materials, biotechnology, nanotechnology, AI/automation, IoT, precision mechanics, and microelectronics. 
   

Hanoi University of Science and Technology (HUST): Supports start-ups with focuses like wind, geothermal, wave energy, and advanced materials through their early-stage incubator BK Holdings, late-stage commercialization-focused incubator Lab2Market, and the BK Fund, the first university-led VC fund for technology-based university spinouts.  

Tracked Solar Module Imports by Country 

Source: U.S. Census Bureau, Chart by Cleanview  

Threat Assessment: How Might These Tariffs Slow Innovation?  

1. Render funding opportunities less accessible to innovators: With local production tied so closely to export industries, investors may adopt even more caution in a more vulnerable economic environment. More expensive raw materials or intermediary goods sourced from China threatens current production levels. Production slowdowns and disruptions to supply chains as the tariffs hang in limbo threaten market stability. Weakened foreign currency inflows through drops in exports could raise import costs and lead to inflation, which could further dampen investor interest. 
    

1. Endanger projected growth in key sectors: Vietnam’s burgeoning semiconductor industry, which was projected to reach $21.45B in revenue in 2025, faces challenges due to the tariffs. The 46% tariff on imported goods renders Vietnamese semiconductors less competitive in the American market. Notably, the tariffs have targeted imported Vietnamese solar panels following investigations into alleged unfair subsidies by Chinese firms operating in the region.   

1. Weaken Vietnam’s role in global supply chains: In response to the tariffs, Chinese-owned companies have shifted production to Laos and Indonesia. This could signal a reconfiguration of global supply chains that bypasses Vietnam. Vietnam risks losing the strategic positioning that it cultivated in the last 5 years should it fail to reduce dependency on U.S. exports.  

Adapt to Survive: Strategies to Ensure Ecosystem Longevity 

To further cleantech’s survivability moving forward, ecosystem actors can build on already solid foundations to carve out new paths to develop innovative technology. With production stalled and export operations marred by higher costs, there will be a stronger emphasis on technology to streamline supply chains and focus on optimization. This creates opportunities for new technological developments championing energy efficiency and sustainable production.  

Increasing energy demand from its burgeoning technology industry keeps it on par with global interest in energy management and power sources for big data, computing and energy infrastructure. Vietnam has already invested in R&D to further explore this. Renewables provide solutions to meet energy needs sustainably. Pulling focus from targeted solar PV manufacturing could result in new monitoring or management technologies, for example. Increasing public-sector focus on hydrogen could also result in innovations focused on efficient and sustainable production as they ramp up local generation capacity.  

Other nations could capitalize on the vacuum created as Vietnam’s international trade relations shift, inviting new markets and stronger potential international trade relationships: Vietnam already has existing free agreements that it can leverage to reduce dependency on the U.S. market, and any of these relationships could also strengthen with the U.S. pulling back. Efforts are underway to expand trade partnerships beyond the U.S., targeting regions such as the European Union, Middle East, Latin America, and the greater APAC region. Currently, Vietnam is furthering their relationship with Japan to maintain free and open international trade, which could help mitigate the impact of U.S. tariffs and strengthen regional supply chains through increased cooperation with neighboring countries.  

Local players now have opportunities to address technological and financial gaps to carve out new paths to growth. Definitive actions to fortify the ecosystem’s existing physical and political infrastructure is key to adapting Vietnam’s ecosystem to withstand the tariffs’ resulting shocks, ensuring resiliency in the longer term.