On July 2, 2025, The White House announced a new tariff agreement with Vietnam, representing the administration’s first trade deal in Asia outside of China, and signaling a notable shift in US trade policy in the region. The agreement sets a 20% tariff rate on certain goods. The primary goal of this deal is twofold: to prevent Chinese goods from circumventing US tariffs by being re-exported through Vietnam (aka transshipping) and to promote bilateral trade between the US and Vietnam.
Impact on Supply Chains
The display industry is tangential to the lighting industry and the new trade deal is impacting the display industry. The new tariff framework has prompted many Taiwanese technology firms with significant operations in Vietnam to reassess and adapt their strategies. Qisda, which sends about half of its display products to the US, is responding by doubling its Vietnamese production capacity by mid-2025 and planning to triple it by the end of the year. This expansion aims to mitigate the impact of tariffs and streamline supply logistics for US-bound shipments.
AUO (AU Optronics) has stated that its exports from Vietnam are currently exempt from the new tariffs due to a reciprocal tariff list, leaving its business largely unaffected for now. The company is, however, maintaining close communication with customers and monitoring policy developments to ensure continued supply chain resilience.
Innolux, another major player, primarily acts as a component supplier. The company notes that while it is less directly affected by tariffs, the price impact is felt by its brand clients. The deal is seen as positive for the sector, reinforcing Vietnam’s role as a crucial assembly hub, especially for displays and notebook computers.
While there are differences between the display and lighting industries, increasing Vietnamese exports to the US also seem likely for lighting manufacturers wanting to diversify suppliers, beyond China.
Expansion by Upstream Component Suppliers
Upstream suppliers, such as LED backlight module manufacturers, are also increasing their investments in Vietnam. These modules themselves are not directly subject to tariffs, but downstream system integrators are affected. Coretronic and Radiant Opto-Electronics are among the companies rapidly expanding their Vietnamese operations to meet increased demand and to reduce tariff risks.
Strategic Implications
This US-Vietnam tariff pact reflects a broader strategic realignment in US trade policy, as companies recalibrate supply chains to balance costs, maintain market access, and comply with evolving regulations. Vietnam is increasingly becoming a key manufacturing base for display components and final assembly, in addition to other industries, particularly as companies seek to diversify away from China and adapt to new tariff realities.
The agreement is seen by industry players as a necessary step to ensure a stable trade environment, especially given Vietnam’s growing importance in the global technology supply chain. The finalized deal is expected to support ongoing industrial development in Vietnam and provide a more predictable framework for companies serving the US market.
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