In the bustling workshops of Hoi An and the sprawling factories of Hanoi, the hum of sewing machines and the shuffle of workers’ feet have long been the soundtrack of Vietnam’s economic ascent. But now, a new and jarring note has entered the mix: anxiety over the future of exports, jobs, and livelihoods. The culprit? A wave of tariffs imposed by the Trump administration that is reverberating across Southeast and East Asia, threatening to upend the region’s hard-won gains and sending shockwaves through the global fashion and manufacturing industries.
According to recent data released by the United Nations Development Programme (UNDP), the impact of these tariffs has been nothing short of seismic. Cambodia’s exports to the United States are projected to fall by a staggering 24 percent, while Vietnam and Fiji could each see drops of more than 19 percent. Sri Lanka is also bracing for a 15 percent decline. For Vietnam, America’s go-to supplier for footwear outside of China, this could mean a loss of over $25 billion in export volume over time—a fifth of its total U.S. export business. The UNDP’s analysts observed, “Exporters are adjusting, but resilience depends on market exposure and product mix.”
The numbers are sobering. In August 2025, Vietnam’s own export data showed a 2 percent drop from the previous month, with footwear—a cornerstone of its manufacturing sector—falling by 5.5 percent. Vietnam, which produces shoes for global giants like Nike, Adidas, Timberland, Puma, Skechers, and Dr. Martens, is the world’s second largest footwear supplier. Yet the 20 percent tariffs now levied on its goods are biting hard, especially when compared to the 9.7 percent average export decline across other Southeast Asian manufacturing hubs. The country had been the sixth largest exporter to the U.S. in 2024, shipping $136.5 billion worth of goods, but that position is now under threat.
Cambodia faces its own daunting challenges. The Southeast Asian nation exported $2.79 billion in apparel and nearly $934 million in footwear to the U.S. last year, with a whopping 58 percent of its total exports destined for American consumers. The UNDP report warned that, “In effect, Cambodia could lose more than half of its U.S.-oriented exports, translating into a contraction of over one-third of its total export sector.” For a country so dependent on trade, such a blow is more than just an economic setback—it’s a potential social crisis in the making.
The social toll of these trade shocks is already being felt across the Asia-Pacific region. Only 54 percent of the population has any form of social protection, and a staggering 1.3 billion people work in the informal sector, lacking the safety nets that could cushion them against sudden job losses. As the UNDP pointed out, small enterprises—many of which drive the region’s export-led growth—are “often the first to fall” when aggressive new tariffs hit. More than 60 percent of countries in the region are experiencing stagnation or even backsliding in social progress, a trend that tariffs could push to new lows.
The recent decision by Cambodia’s government to approve a new minimum wage—one that falls short of the demands of nearly one million garment, footwear, textile, and travel goods workers—underscores the pressure facing both workers and policymakers. The garment sector, a lifeline for many families, is being squeezed from both ends: international buyers are pulling back, and domestic wages are failing to keep pace with workers’ needs.
“The global economy is entering a new chapter of rising protectionism, shifting trade alliances, and deepening uncertainty,” said Kanni Wignaraja, UN Assistant Secretary-General and UNDP Regional Director for Asia and the Pacific. “For Asia-Pacific, one of the most trade-dependent regions, this turbulence is seismic. It is also a moment of choice for economic and social reform.”
While Vietnam and Cambodia struggle with the fallout, China—long the main target of the Trump administration’s tariff campaign—has managed to adapt more nimbly. Although China currently faces a 10 percent tariff, a pause on even higher 30 percent duties is set to expire on November 10, 2025. In the meantime, China has shifted its export strategy, offsetting a 25 percent plunge in shipments to the U.S. (worth $57 billion) with an 11 percent surge in exports to other markets, raking in an additional $146 billion in business between April and August 2025. According to UNDP data, China’s overall exports actually grew by 5.9 percent year-over-year during this period, bucking the downward trend seen in its neighbors.
But the trade war’s effects aren’t limited to Asia. In the United States, the tariffs have increased costs for businesses and consumers alike, disrupted global supply chains, and stoked inflation and economic uncertainty. Major companies, from Apple to John Deere, are rethinking their sourcing and manufacturing strategies—reshoring some operations to the U.S., diversifying suppliers, and investing in automation to weather the storm. These policy shifts are aimed at reducing dependency on foreign supply chains, but they also highlight the need for a balanced, strategic approach to trade. As companies scramble to adapt, the ripple effects are being felt across industries, from electronics to agriculture.
Retaliatory tariffs from countries like China have compounded the pain for American exporters, especially in the agricultural sector. U.S. farmers, once reliant on robust demand from overseas, are now grappling with shrinking markets and falling prices. The economic strain is spreading across multiple sectors, underscoring just how interconnected—and vulnerable—the global economy has become.
For policymakers, the current turmoil poses a stark choice: double down on protectionism or seek new avenues for cooperation and reform. The UNDP’s Kanni Wignaraja put it succinctly: “It is also a moment of choice for economic and social reform.” For the millions of workers in Vietnam, Cambodia, and beyond, the stakes couldn’t be higher. With only a slim majority of the region’s population enjoying social protections, and most workers lacking formal employment status, the prospect of mass layoffs looms large.
Meanwhile, small businesses—the backbone of many export-led economies—are bracing for the worst. As the UNDP report noted, they are “the first to fall” in the event of trade shakeups. The risk is not just economic, but deeply social: lost jobs mean lost incomes, which in turn threaten to unravel years of progress in poverty reduction and social development. If the current trends continue, the region could see a surge in hardship, with fewer opportunities for upward mobility and greater vulnerability to future shocks.
As the world watches, the question remains: will governments and industries rise to the challenge, forging new paths through the turbulence, or will protectionism and uncertainty deepen the divide? For now, the fate of millions hangs in the balance, caught between global policy shifts and the relentless churn of the world economy.
