The new U.S. tariff policy, effective August 1, 2025, has triggered profound strategic shifts among companies across Asia. Against the backdrop of rising trade tensions, Vietnam is rapidly establishing itself as a critical hub for businesses seeking to mitigate tariff exposure while enhancing operational efficiency.
Initially, Vietnam faced considerable uncertainty when early drafts proposed tariffs as high as 46% on exports. Such a scenario would have forced many corporations to overhaul entire business models under immense cost pressure. However, after negotiations, the final tariff was reduced to 20%. While higher than previous levels, the revised rate is now deemed manageable and has helped restore investor confidence. From that point, capital inflows rebounded strongly, positioning Vietnam as one of the region’s most dynamic growth stories.
Diversifying production away from China is not a new phenomenon. For more than a decade, the “China Plus One” strategy has guided corporate boardrooms, as rising wages, stricter environmental regulations, and intensifying trade frictions encouraged manufacturers to seek alternatives. The latest U.S. tariffs, however, have acted as an accelerant, transforming a gradual shift into a decisive pivot.
Southeast Asian nations are competing vigorously to capture this moment. Thailand and Malaysia are investing heavily in industrial parks, while Indonesia highlights its demographic dividend. Yet Vietnam retains a distinct advantage: labor costs remain significantly lower than in Thailand or Malaysia; production and logistics expenses are highly competitive; and its strategic geography — bordering China and situated along vital shipping routes — delivers unmatched connectivity. Most importantly, Vietnam offers political and regulatory stability, a factor increasingly prioritized by global investors.
“Crucially, the shift is no longer limited to final assembly,” noted Trang Bui, CEO of Cushman & Wakefield Vietnam. “Entire supply chains are now being relocated to Vietnam, driven by policy stability, particularly around re-export taxation. This has generated substantial momentum for premium ready-built factories, which are emerging as a strategic product within Vietnam’s industrial real estate portfolio.”
Once considered a weak point in Vietnam’s industrial landscape, ready-built factories (RBFs) have rapidly evolved to international standards. Today, they provide standardized specifications suitable for a wide array of light to medium industries — a sharp contrast to the fragmented facilities of the past.
According to Cushman & Wakefield, Vietnam’s RBF supply has expanded exponentially since 2017. By Q2 2025, total supply reached approximately 11 million square meters, with occupancy rates surpassing 85%. Leading clusters include Ho Chi Minh City (3 million sqm), Dong Nai (2.2 million sqm), Bac Ninh (1.6 million sqm), and Hai Phong (2.2 million sqm), forming robust industrial corridors that attract consistent foreign capital.
Most RBFs are constructed with prefabricated steel frames, corrosion-resistant coatings, and insulated roofing designed to withstand natural disasters. Ceiling heights range from 4 to 13 meters, enabling large equipment installations and natural ventilation. Floor loading capacities between 1,000 and 4,000 kg/m² support diverse industrial machinery.
Equally significant, facilities now comply with key Vietnamese technical standards: electricity supply (TCVN 9207:2012), industrial lighting (TCVN 7114:2008), and fire safety (QCVN 06:2022/BXD). Lighting systems deliver 100–750 lux depending on functional areas, while advanced ventilation combines negative pressure fans with natural airflow to ensure healthy indoor air quality.
“With these specifications, Vietnam’s ready-built factories can now accommodate most industrial production requirements,” Bui added. “From electronics components and semiconductors to automation equipment, the fundamentals are in place. For specialized industries such as cleanrooms or heavy-load operations, developers can customize solutions within short lead times.”
A prime example of this new generation of facilities is KTG Industrial’s project in VSIP Bac Ninh 2. Covering 14 hectares, Phase 1 includes seven factories with more than 44,000 sqm of leasable space. A highlight is compliance with ACI 117-10 floor flatness and levelness standards, enabling installation of precision machinery and minimizing vibration — essential for high-tech and automated production lines.
The project also features scalable power infrastructure (100–200 W/m²) and advanced insulation systems. Energy efficiency is built into the design, including LED lighting, water-saving fixtures, and insulation enhancements, collectively projected to save tenants USD 75,000–80,000 annually.
Future-readiness is another hallmark: rooftops are solar-ready, parking lots support EV charging, and an integrated Energy Management System (EMS) monitors real-time energy use and carbon emissions, offering predictive analytics for optimization.
The trend toward “green factories” is no longer niche but mainstream. Increasingly, industrial parks incorporate low-carbon materials, renewable energy, water recycling, and natural daylighting as standard practice. Worker well-being is also prioritized: ASHRAE-compliant ventilation systems ensure fresh air, skylights enhance natural lighting, and designated green spaces improve onsite quality of life. Covered motorbike parking provides 12–13 spaces per 1,000 sqm, while smoke-free policies reinforce healthy environments.
“Our ambition goes beyond delivering industrial space. We aim to provide facilities that enhance productivity, safeguard the environment, and improve the quality of life for every worker,” said Mr. Tran Quang Trung, Head of Project Development at KTG Industrial.
Regional comparisons reinforce Vietnam’s competitive edge. China, while still the global manufacturing leader, faces rising labor costs and intensifying U.S. trade frictions. Thailand boasts mature infrastructure but struggles with high rents and limited land supply. Malaysia offers foreign ownership but contends with escalating rental costs. Indonesia has scale but uneven infrastructure, while Singapore remains focused on high-tech sectors with some of the region’s most expensive rents.
Analysts often liken Vietnam today to China in the early 2000s: low costs, abundant labor, and robust FDI inflows. With strategic policies, Vietnam is well-positioned to move up the value chain — from consumer goods to high-tech industries such as semiconductors, precision electronics, and automation.
The outlook over the next five to ten years is highly promising. Liberalized FDI policies, coupled with major infrastructure investments in transport, ports, and energy, are creating strong foundations. At the same time, the growth of internationally certified green factories positions Vietnam to meet rising ESG requirements from global corporations. Challenges persist — including shortages of skilled technical labor, limited land availability, and intensifying ASEAN competition — yet ongoing reforms in vocational training, regulatory simplification, and high-tech incentives point toward sustained momentum.
In effect, the new U.S. tariffs have inadvertently catalyzed a global supply chain reconfiguration. And Vietnam, with its unique blend of cost competitiveness, geographic advantages, and policy stability, is emerging as Asia’s next strategic manufacturing powerhouse.
Source: https://www.cushmanwakefield.com/en/vietnam/news/2025/08/vietnam-industrial-space-powering-the-future-of-global-supply-chains
𝐀𝐋𝐒 – 𝐓𝐡𝐞 𝐋𝐞𝐚𝐝𝐢𝐧𝐠 𝐨𝐟 𝐀𝐯𝐢𝐚𝐭𝐢𝐨𝐧 𝐋𝐨𝐠𝐢𝐬𝐭𝐢𝐜𝐬
The International Air Cargo Association (TIACA) has published its first-ever white paper dedicated exclusively to e-commerce, underscoring the sector’s transformative role...
Central Asia is moving from the periphery of global aviation to the forefront of East–West connectivity, driven by shifting geopolitical dynamics and the growing need for...
Asia’s airfreight market is entering a period of volatility and urgency. With U.S. tariff suspensions set to expire in July and August, exporters are accelerating shipments...
The global air cargo sector is entering a period of sharp disruption and uncertainty in 2025, fueled largely by shifting U.S.–China tariffs.
National holidays in Japan and several European countries contributed to a sizeable mid-August dip in air cargo tonnages – similar to one experienced in the equivalent period...
The global trade environment is increasingly defined by market conflicts, regulatory uncertainty, and persistent disruptions.
The prolonged trade tensions between the United States and China continue to cast a significant shadow over regional air cargo volumes. Given Hong Kong’s critical role in...
Digital transformation and the rapid expansion of e-commerce are reshaping the air logistics industry, providing businesses with a powerful competitive advantage.
Southeast Asia is rapidly emerging as a global hub for trade and logistics, propelled by robust intra-ASEAN commerce, surging e-commerce growth, and the region’s push toward...
ALS