Charles R. Goulding and Preeti Sulibhavi discuss how Global companies in Vietnam are turning to 3D printing and R&D tax credits to offset new tariffs and stay ahead in the manufacturing game.
Vietnam has rapidly emerged as a significant manufacturing hub, positioning itself as a viable alternative to China. This strategic shift has attracted numerous global companies seeking diversified supply chains. In 2024, Vietnam’s total trade revenue reached US$786.29 billion, reflecting a 15.4% year-on-year increase, with a trade surplus of US$24.77 billion. However, the recent imposition of a 46% tariff on Vietnamese goods by the U.S. has introduced new challenges, impacting companies like Nike, Lululemon, and SharkNinja, all of which have substantial manufacturing operations in Vietnam.
Impact of U.S. Tariffs on Vietnam
The U.S. administration’s decision to levy a 46% tariff on Vietnamese imports has significant implications for Vietnam’s export-driven economy. Despite Vietnam’s efforts to address trade imbalances by increasing imports of American goods, including defense and security products, the substantial trade surplus, which exceeded US$123 billion in 2024, remains a point of contention. Prime Minister Pham Minh Chinh has expressed willingness to negotiate, even proposing a 45-day delay on the tariff implementation to facilitate discussions.
3D Printing Initiatives by Nike, Lululemon, and SharkNinja
Amid these trade tensions, companies like Nike, Lululemon, and SharkNinja have been leveraging advanced manufacturing technologies, including 3D printing, to enhance product development and production efficiency.
- Nike: Nike has been at the forefront of integrating 3D printing into its manufacturing processes. The company utilizes this technology to create prototypes rapidly, allowing for accelerated design iterations and testing. This approach not only reduces development time but also enables more intricate and performance-oriented designs in their footwear lines, for example, in the Nike Air Max collection.
- Lululemon: Lululemon has explored 3D printing to develop customized yoga accessories and apparel components. By employing this technology, Lululemon aims to offer personalized athleisure products that cater to the specific needs and preferences of its customers, enhancing both functionality and aesthetic appeal.
- SharkNinja: SharkNinja, known for its household appliances, has incorporated 3D printing to streamline the prototyping of new products. This integration allows for rapid testing and refinement of designs, leading to more efficient production cycles and the ability to bring innovative products to market more swiftly. Ninja offers a whole line of products for everything from cleaning to your kitchen including the Ninja Artisan™ Pizza Oven, taking its cue from the Ooni pizza oven.
Vietnam’s 3D Printing Landscape
Vietnam’s commitment to technological advancement is evident in its burgeoning 3D printing sector. The country has witnessed a surge in local startups and educational institutions focusing on additive manufacturing. This growth is supported by government initiatives aimed at fostering innovation and integrating advanced technologies into the manufacturing ecosystem. The development of 3D printing capabilities within Vietnam not only enhances its appeal as a manufacturing destination but also aligns with the global shift towards more flexible and sustainable production methods.
Regional Implications and Negotiations
Vietnam’s proactive stance in addressing tariff challenges may set a precedent for other Southeast Asian nations facing similar pressures. Countries like Cambodia and Indonesia might be encouraged to engage in negotiations to mitigate tariff impacts and promote favorable trade terms. The willingness of Vietnam to negotiate underscores the importance of diplomacy and strategic partnerships in navigating complex international trade dynamics.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes are typically eligible expenses toward the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software can also be an eligible R&D expense. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit-eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Conclusion
The intersection of trade policies and technological innovation presents both challenges and opportunities for Vietnam and the global companies operating within its borders. While the imposition of tariffs poses immediate economic concerns, the continued investment in technologies like 3D printing positions Vietnam as a resilient and forward-thinking manufacturing hub. The collaborative efforts between the Vietnamese government and international corporations to embrace innovation and engage in constructive negotiations will be pivotal in shaping the future landscape of global manufacturing and trade relations. The Vietnamese willingness to negotiate demonstrates that when national interests are carefully considered, cooler heads prevail. Hopefully Vietnam and President Trump can come to terms.
