Vietnam remains on edge, even though Donald Trump has put sweeping tariffs on hold, granting the Southeast Asian country a 90-day window for negotiations.

As Trump announced 46% tariffs on Vietnamese imports last week — the highest among Southeast Asia’s six largest economies — the country’s manufacturing hub of Bac Ninh was gripped by uncertainty. The steep tariff signaled upheaval for small and mid-tier electronics suppliers and tighter margins for global tech giants who have their factories in the province.

The tariff pause announced on April 9 offers only temporary relief and Vietnam still has plenty to worry about, Hanh Nguyen, a doctoral researcher at the Australian National University, focusing on Southeast Asia’s economy and security, told Rest of World.

“The reciprocal tariff on China still complicates the issue for Vietnam as China is Vietnam’s leading trade partner and provides parts and components for Vietnam’s manufacturing sector,” Hanh told Rest of World.

Bac Ninh, roughly 50 kilometers (31 miles) northeast of the capital Hanoi, is Vietnam’s major tech manufacturing hub, home to suppliers for Apple and Samsung. In recent years, the province has seen a surge in investment from China as global tech giants looked for a “China-plus-one strategy.” In 2024, Bac Ninh received $5.12 billion in foreign investment, more than anywhere else in Vietnam.

“Vietnam’s overall [cost] advantage has become very slim now,” Xie Qing, a factory property realtor in Bac Ninh, told Rest of World two days after the 46% tariff rate was announced. “The pessimism is spreading. Some people felt the sky was falling down.”

Vietnam was among the biggest winners of the trade war, which Trump started during his first term when he targeted China. The country quickly emerged as the top choice for tech giants looking to reduce their reliance on China-based supply chains.

In recent years, Apple has shifted its production of iPads, MacBooks, and AirPods to Vietnam, and suppliers from China followed. Last year, China topped the list of countries investing in Vietnam for the second time in a row, based on the number of new projects.

Nguyen Thi Anh Nguyet, the CEO of SJ Labor, which helps electronics factories in Bac Ninh recruit workers, told Rest of World that just two months ago, Chinese manufacturers had approached her seeking help to set up production lines in the area.

“Now the plans have been put on hold, so I don’t know if they’ll move or not,” Nguyet said.

The overall tariff fallout is expected to undermine Vietnam’s 8% GDP growth target, although even tougher tariffs on China may still make Vietnam relatively attractive. A Japanese device maker chose the country as its new manufacturing base on Wednesday just before Trump announced a tariff pause.

The pause now prompts businesses to adopt a “wait and see” approach, according to David Yuen-Tung Chan, a researcher at Lingnan University in Hong Kong.

“Should these adjustments in tariffs endure over the long term, Vietnam could emerge as a significant beneficiary for sure,” Chan told Rest of World. However, he noted that the current tariff level of 125% on Chinese imports, might not be set in stone, and that “there’s a realistic possibility that tariffs on Vietnamese imports would see an increase exceeding current levels.”

Vietnam’s Communist Party chief To Lam, the most powerful politician in the country, was among the first world leaders to call Trump on April 4, offering to reduce tariffs to zero if the U.S. did the same.

“Vietnam is in a disadvantaged situation,” Hanh, the researcher in Australia, said. The country has little leverage since Vietnam’s exports to the U.S. were valued at nearly 10 times more than U.S. exports to Vietnam last year, she added.

In Bac Giang, another manufacturing province neighboring Bac Ninh, workers heading home from their day shift at a Luxshare factory — a key assembler of AirPods — declined to comment on tariffs saying they didn’t follow the news.

Since last year, Apple suppliers in Vietnam have been courting workers with free accommodation and cash amid a worker shortage. “Some promise up to 8 million dong ($300) in sign-on bonuses,” Vuong Van Hung, a former Luxshare security guard who now recruits workers, told Rest of World. “In 8–9 years of working [in the industry], I’ve never seen such high incentives.”

On April 5,  Vietnam’s first smart deep-sea port was inaugurated in Hai Phong, another rising manufacturing hub in northern Vietnam.

Bruno Jaspaert, CEO of Deep C Industrial Zones, an industrial property developer based in Hai Phong, attended the port opening, where high-profile dignitaries including Deputy Prime Minister Mai Van Chinh, and the Danish and Dutch ambassadors were in attendance.

Jaspaert told Rest of World that the Vietnamese officials “seemed all very convinced that in the end, they will make a deal” with the U.S.

Out of the four biggest U.S. trade deficits — involving China, the European Union, Mexico, and Vietnam — Jaspaert said the country would still need at least one trading partner that keeps producing for American buyers. 

“So my bet is it’s not going to be China. It’s not going to be Europe because Europe will also retaliate. So that leaves Mexico and Vietnam,” he said.