The Impacts of the Conflict Involving the US, Israel, and Iran on Supply Chain Security and Macroeconomic Status in Vietnam

Abstract

The US, Israel with Iran conflict has triggered a systemic supply shock that propagates nonlinearly through Vietnam’s supply chain security via four convergent channels: energy, strategic raw materials, logistics, and financial-exchange rate dynamics. The blockade of the Strait of Hormuz has disrupted critical inputs lacking viable substitutes in high-technology production. These shock channels interact through nonlinear feedback mechanisms, eroding macroeconomic resilience thresholds and activating path dependency across core supply chains. The growth model predicated on FDI-oriented assembly manufacturing has reached its structural tolerance limit as macro-regulatory instruments lose effectiveness under exogenous supply pressures and institutional shocks. Consequently, macroeconomic imbalances intensify and structural vulnerabilities become increasingly pronounced. Sustaining rapid growth and long-term development requires a fundamental transition toward an endogenous autonomy model, anchored in four strategic pillars: strengthening sovereign liquidity buffers and institutional defense capacity; developing strategic energy reserves; localizing semiconductor value chains and sovereign artificial intelligence infrastructure; and consolidating circular agricultural supply chains to reduce input dependency and enhance systemic resilience.