The ongoing US-China trade war continues to reshape global supply chains, making it increasingly expensive and uncertain for American companies to rely solely on Chinese manufacturing.
In early 2025, President Donald Trump’s administration imposed a 10% tariff on all Chinese exports, with the potential for further hits against the country, forcing businesses to explore alternative manufacturing hubs to mitigate these rising costs.
For companies like Kenvox, a leading Chinese silicone and plastic molding factory serving U.S. and Canadian clients, its manufacturing operations in Vietnam present a compelling cost advantage for its current and potential clients as it leverages its presence in both countries to offer American clients a smoother way forward.
Vietnam’s economic growth, favorable business environment, labor costs, and participation in multiple trade agreements position it as a strategic alternative to Chinese manufacturing.
Let’s explore precisely why Vietnam has emerged as a manufacturing powerhouse, the benefits of establishing a manufacturing facility there, and how Kenvox can use its facilities in the country to help its customers maintain a competitive advantage.
Best Alternative Solution: Why Vietnam is Gaining Momentum
Recent U.S. trade policies have made sourcing from China increasingly costly. The latest 10% tariff on Chinese exports in 2025, coupled with ongoing geopolitical tensions, has disrupted supply chains, raising import costs for American businesses. These tariffs impact a wide range of industries, including electronics manufacturing, footwear production, and the textile industry, further escalating operational costs for companies relying on Chinese manufacturers.
By shifting manufacturing operations to Vietnam, businesses can avoid these heavy import duties on Chinese products while maintaining access to essential raw materials from China. This strategic move allows companies to lower import costs and sustain their profit margins without compromising production capabilities.
China+1 Strategy: Global Businesses Seeking Alternatives
The “China+1” strategy, where businesses diversify their manufacturing base beyond China, has gained significant traction. Vietnam stands out as an attractive alternative manufacturing hub due to its competitive labor market, business-friendly environment, and strong foreign investment incentives.
In 2023, Vietnamese exports to the U.S. grew by over 25%, underscoring the country’s ability to absorb supply chain disruptions and attract major corporations. The country also now has a trade surplus with both China and the U.S., further highlighting its growth as a manufacturing powerhouse. By leveraging Vietnam’s manufacturing capacity, companies can ensure resilience against fluctuating trade policies while maintaining their supply chain efficiency.
The Key Benefits of Manufacturing in Vietnam for 2025 and Beyond
Going south from China to Vietnam is increasingly attractive for several reasons, not least because of its already impressive manufacturing capabilities. Just like China in the last 30 years, this Asian country has evolved to meet and even surpass international standards in many industries, seeing impressive growth rates in terms of logistics, GDP, and manufacturing output.
Tariff Mitigation & Trade Agreement Advantages
Establishing a manufacturing facility based in Vietnam allows American businesses to effectively circumvent the heavy import duties imposed on goods coming from China thanks to the Vietnamese government’s long-term goal of making their country friendly to international trade.
This strategic choice significantly reduces costs and enhances competitiveness both domestically and in international markets.
International Trade Organizations Vietnam Participates In:
- Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): This agreement provides manufacturers in Vietnam with invaluable access to Canadian and Mexican markets, broadening their market reach and potential customer base.
- EU-Vietnam Free Trade Agreement (EVFTA): This landmark agreement eliminates 99% of import tariffs on Vietnamese goods, greatly facilitating smoother and more cost-effective exports to Europe, thus enhancing profitability and expanding export opportunities.
- ASEAN Trade Benefits: Vietnam’s many trade agreements position the country as a prime location for businesses seeking to integrate seamlessly into various international trade networks. This ensures that companies benefit from reduced tariffs and easier market access within the ASEAN region, promoting a more efficient and favorable trade environment for manufacturers looking to globalize their reach.
Robust Supply Chain Flexibility & Geographic Advantages
Vietnam’s proximity to China provides logistics capabilities that enhance supply chain efficiency:
- Easy Access to Chinese Raw Materials: Vietnam’s strategic location allows seamless integration with China’s mature supplier landscape. For example, Kenvox’s Vietnam plants are located in the northern regions of the country next to the Chinese border and right between manufacturing giants like Samsung and Foxconn, meaning they can easily import manufacturing goods materials from China or have access to the same local supply chain major manufacturers use.
- Expanding Supplier Base: Investment in industrial development has strengthened the supply chain network for Vietnamese manufacturers, particularly in electronics manufacturing, the textile industry, and the footwear industry.
- Diverse Manufacturing Landscape: Vietnam is already a major player in electronics, the fashion industry, and the footwear industry, with increasing capabilities in high-quality products for both consumer electronics and medical devices.
- Government Incentives: The Vietnamese government provides tax incentives, corporate tax breaks, and import duty waivers to foreign investors.
- Youthful Workforce: With a median age of 32, Vietnam offers a labor-intensive manufacturing environment that ensures long-term growth.
Diversification to Reduce Geopolitical Risks
Given the uncertain trade landscape, Vietnam offers a stable and neutral business environment:
- Shielding from U.S.-China Trade War: Vietnamese products avoid the scrutiny and tariffs imposed on Chinese exports.
- Strengthening U.S.-Vietnam Relations: The U.S. sees Vietnam as a strategic trade partner, offering a business-friendly environment with fewer regulatory risks.
- Political Stability: Unlike China’s communist government, Vietnam has a more neutral international stance, minimizing risks associated with economic sanctions.
Improved Brand Perception for Western Customers
Vietnam’s reputation in international markets benefits businesses:
- “Made in Vietnam” Label: Perceived more favorably than Chinese products, especially in industries like medical devices and defense.
- Alignment with ESG & Sustainability Trends: Vietnam is adopting renewable energy and environmental standards, appealing to major companies focused on sustainable manufacturing.
Currency & Financial Benefits
Vietnam’s financial stability makes it an attractive alternative:
- Stable Currency: The Vietnamese dong (VND) experiences fewer fluctuations than China’s yuan (CNY), reducing foreign exchange risks.
- Simplified Business Regulations: Foreign direct investment rules are more transparent than China’s complex regulatory environment.
Challenges of Manufacturing in Vietnam
While Vietnam offers significant advantages, manufacturing companies must navigate key challenges compared to the likes of the largest manufacturing economy in the world, China:
Infrastructure & Logistics Limitations
- Shipping Logistics: Ports and transportation infrastructure are still developing, requiring efficient infrastructure enhancements.
- Quality Control Issues: The availability of third-party quality standards and inspection services is limited compared to China, which means manufacturers and importers might have to incur additional costs they would otherwise not require in other economies.
- Production Costs: While there are some compelling cost advantages, average salaries in Vietnam are not significantly lower than in Chinese cities, and overall production can still be more expensive in Vietnam than in China.
Workforce Skill Gaps
- Need for Workforce Training: Vietnam’s skilled labor force is still developing, requiring investment in educational institutions and vocational training.
- Language Barriers: Fewer English-speaking representatives in Vietnamese factories compared to Chinese manufacturers.
Raw Material Sourcing Challenges
- Dependence on Chinese Suppliers: Vietnam still imports many raw materials and natural resources from China, limiting full manufacturing independence.
- Developing Local Supply Networks: Expanding domestic demand for locally sourced materials remains a work in progress.
How Kenvox Leverages Its Vietnam Subsidiary for Future Growth and Smooth Transfers
Kenvox didn’t just see an opportunity for growth in Vietnam in the last ten years but also to make sourcing easier for its clients thanks to its synergy between plants in both China and its southern neighbor. It did this by establishing a manufacturing footprint in Vietnam for final assembly, utilizing Chinese factories for raw materials.
It then gradually localized sourcing, integrating with Vietnam’s growing supplier landscape., along with building strategic partnerships and workforce developments:
- Opportunity for a Smooth Transfer: A smooth transfer of production lines, molding, and other crucial manufacturing elements from China to Vietnam is possible thanks to Kenvox’s presence in both countries. They reduce the risk five to sixfold for their clients as they take any mold from China to Vietnam, for example, without issues and extra costs to their clients.
- Collaborations with Educational Institutions: Training millions of factory workers to enhance manufacturing efficiency.
- Industrial Park Investments: Establishing operations in major cities and provinces like Hai Duong with efficient infrastructure.
Future-Proofing Against Trade Policy Shifts
By this point, you can see how a Vietnam-based manufacturing sector ensures stability in case of further U.S.-China trade tensions; by giving manufacturers the opportunity to make the best-informed decision for their shareholders while still being able to be posited in the North American market.
Remember that Vietnamese exports benefit from trade agreements that facilitate cost savings for clients.
Why the Right Move is Kenvox’s Vietnam Manufacturing Option
Kenvox’s expansion into Vietnam secures its competitive advantage in the global manufacturing industry. By reducing import costs, maintaining supply chain efficiency, and benefiting from trade agreements, Kenvox ensures cost-effective solutions for U.S. and Canadian clients.
With its Vietnam subsidiary, Kenvox is poised for long-term economic growth, ensuring supply chain resilience and manufacturing capacity independent of U.S.-China trade policies.