Vietnam's Flood Disaster: When Your China Backup Plan Goes Underwater

The flooding hit central Vietnam, a region home to a key coffee production belt as well as the country's most popular beaches. Dak Lak province recorded 63 deaths, with tens of thousands of homes flooded. Dak Lak, Lam Dong, and Dak Nong account for 76% of Vietnam's total coffee growing area. Traders said floodwaters were hampering the coffee harvest in the region.

The United States remains Vietnam's largest export market, with $85.1 billion in export revenues recorded in the first seven months of 2025. Vietnam's electronics manufacturing generated $115 billion in revenue in 2023, over a quarter of the country's GDP, with major companies like Samsung and Foxconn heavily invested. In the first 10 months of 2025, Vietnam's manufacturing and processing industry increased by 10.5 percent.

For US companies, Vietnam's flooding exposes the concentration risk in Southeast Asian manufacturing. Electronics, textiles, and automotive components flow through Vietnamese ports to American distribution centers on predictable schedules. Major roads remained blocked due to landslides, and one million customers were left without electricity. When infrastructure fails for days or weeks, those schedules break. Companies with single-source Vietnamese suppliers now face delayed shipments, incomplete orders, and the choice between halting production or paying premiums for alternative sources.

For non-US manufacturers, particularly European and Asian companies, Vietnam represents a hedge against Chinese supply chain concentration. Vietnam's manufacturing reshoring trend reflects companies diversifying away from China. But diversification only works if alternative sources remain operational. When extreme weather events shut down manufacturing regions for extended periods, the diversification strategy fails at precisely the moment it matters most.

The broader pattern shows how climate risks compound manufacturing concentration. Vietnam experiences an average of four to six typhoons annually, with the central coastline particularly vulnerable from August to November. Natural disasters left 279 people dead or missing in Vietnam and caused more than $2 billion in damage between January and October. The Environment Ministry estimated economic losses of $343 million across five provinces from these floods alone.

Companies built supply chains assuming Vietnamese infrastructure would remain accessible year-round. Seasonal flooding is predictable. What's changing is intensity and duration. When 150 centimeters falls in 72 hours instead of spreading across weeks, existing drainage infrastructure fails catastrophically. The supply chains optimized for normal weather can't adapt fast enough when normal stops happening.

In a world of black swans and cascading disruptions, this is what resilience in action looks like.