In the grand landscape of the global economy, the United States has long been viewed as a titan while Vietnam has occupied a more modest position as a small player within the ASEAN blocGiven this disparity in size and economic power, juxtaposing the two nations may seem an exercise in futility, particularly in assessing who might bear the brunt of future economic troubles.

However, appearances can be deceiving.

On one hand, Vietnam is grappling with the staggering withdrawal of foreign investments, totaling approximately 16.5 million trillion Vietnamese DongOn the other, the United States faces a daunting federal debt that has risen to an astronomical over $36 trillion.

In extreme scenarios, while Vietnam's economy may teeter on the edge of recession, the United States could not only face its own downturn but also ignite a worldwide economic crisis.

To truly understand the current dynamics, it’s essential to dissect specific elements.

Following a recent 25% tax increase announcement in Mexico, Vietnam's manufacturing sector has been rattled to its core.

Official statistics from Vietnam reveal a staggering 12.2% drop in direct foreign investment compared to the previous year.

Simultaneously, industry associations in Vietnam reported a 29.8% decline in total investment from overseas since the beginning of 2023, with preliminary estimates suggesting that at least 16.5 trillion Vietnamese Dong has exited the market.

What has precipitated this situation?

Both domestic and international analysts have reached a consensus that Vietnam's economic growth in recent years has largely been reliant on friend-sourcing outsourcing from the United States.

However, in recent years, this outsourcing trend has shifted towards near-sourcing, leading to significant losses in Vietnamese manufacturing orders, while trade volumes between Mexico, Canada, and the U.S

have surged.

Yet, with the U.Snow targeting Mexico and Canada, Vietnam may soon find itself grappling with similar challenges.

In the first three quarters of this year, Vietnam’s export data still indicates the United States as its largest market, with a trade surplus of $104 billion favoring VietnamThis clearly illustrates the significant dependency on American markets.

Moreover, the investment climate in Vietnam has failed to see meaningful improvements; frequent power shortages continue to plague the country year after yearRecently, Intel scrapped a $3.3 billion investment plan in Vietnam, redirecting the project to Poland, further underscoring the loss of foreign direct investment for Vietnam.

If the trend of foreign capital flight continues, Vietnam's economy is bound to face recessionary challenges.

However, the difficulties confronting the United States are potentially far more severe, especially after the national debt officially surpassed $36 trillion last week.

At the end of July this year, the debt exceeded $35 trillion, then surged to $36 trillion within less than four months; that’s an increase of over $10 billion per day on average over a period slightly exceeding 100 days.

Looking back, the debt stood at $34 trillion at the start of January 2024, only to jump $1 trillion in nearly seven months, highlighting the accelerating pace of U.S

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debt accumulation.

The U.STreasury is walking a tightrope, particularly since the Federal Reserve began tightening monetary policy starting in March 2022.

This monetary tightening phase not only began in March 2022; by June, the balance sheet reduction commenced, which was later doubled in scale by September of the same year.

As a result, the cost of servicing U.Sdebt continues to rise, pushing yields on various maturities of treasury bonds to soar, thus increasing the fiscal pressures on the Treasury DepartmentIn an attempt to manage these obligations, Secretary Yellen has had to issue a growing number of new debts purely to fund both principal repayments and interest payments.