Good Morning Morocco: Vietnam’s Tariff Headwinds Mark Maghreb’s Moment

By Gavin Serkin

The screech of snake charmers' cracked clarinets, the sight of performing monkeys tugging on their masters’ chains, the wafts of mint, liquorice and caraway from babouche or snail soup stalls: Marrakech’s iconic main square, Jemaa el-Fnaa, overwhelms the senses unlike anywhere else. Or almost.

Ten years ago, I experienced an equivalent dizzying cacophony arriving for the first time in Ho Chi Minh City, effectively one giant marketplace combined with the world’s biggest concentration of motorbikes per person. Yamaha, Honda, Sym: they swarm like wasps in every space through busy street stalls, pavement cafes, even into shops.

This street-level commercial frenzy is central to Vietnam's economic rise, cultivating home-grown entrepreneurial ambition across gender, age and class. It’s one of the reasons I ranked Vietnam second among frontier markets poised to become high-growth emerging economies in my book Frontier: Exploring the Top Ten Emerging Markets of Tomorrow. Since then, Vietnam’s GDP has more than doubled — from $171 billion to $476 billion — making it one of the fastest-growing economies in the world.

Given its export success — from electronics to textiles and furniture — it’s little wonder Vietnam appeared near the top of President Trump’s tariff hitlist. In 2024, Vietnam ran the world's third-largest goods trade surplus with the US, at $123.5 billion - behind only China and Mexico.

With Vietnam firmly in Trump’s trade war crosshairs, the stock market reflects a more defensive stance. Speaking at the 2025 Vietnam Forum in London in June, Dominic Scriven, Executive Chairman of Dragon Capital Group, described the current "trade reshuffling" as a "liveable situation" for the economy, given that the current 46% tariff is ultimately likely to be negotiated down to nearer 20%. Using the example of Nike, a running shoe might leave its factory in Vietnam at $24 and sell for $150 in the U.S. A 20% tariff on the export price would raise that to $30 — a cost increase that, Scriven noted, some companies in the supply chain have already agreed to absorb.

Even so – and despite Vietnam’s strong domestic demand and consistent FDI inflows — a total $1.5 billion in foreign capital exited the Vietnamese stock market in the first five months of 2025, largely from blue-chip holdings.

Zero-Sum Gain

The source of Vietnam's pain is Morocco's gain. Trump’s April 2025 tariff list has Morocco enjoying preferential tariffs averaging around 10%. Positioned beyond Washington’s protectionist lens, Morocco appeals as a low-risk production and logistics centre in the remapping of global supply chains.

Mirroring Vietnam’s success in anchoring itself as a "China plus one" fixture and at the ASEAN core, Morocco is positioning itself as North Africa’s portal to Europe, the Middle East, and sub-Saharan Africa amidst global supply chain realignment.

Morocco retains further fundamental traits similar to those that make Vietnam attractive to investors for the longer term, including a youthful population possessing an inbuilt reflex and educational capacity for trading and entrepreneurialism. With over 45% of the population under the age of 25, youth unemployment remains a challenge. Yet, it also represents a workforce which can be absorbed into emerging sectors.

The other fundamental positive is a geopolitical location of immense strategic and commercial significance. Just as Vietnam benefitted as the go-to production location on the cusp of China, so too Morocco has become a magnet for supply chains seeking stability, low labour costs, and export connectivity.

Soft Power

Morocco, like Vietnam, also boasts a rare commodity within the frontier markets universe: institutional stability. Perhaps surprisingly, Vietnam's Communist leadership has enabled incremental advances in foreign investor participation, commercial opportunity, and corporate accountability. In Morocco, the constitutional monarchy has delivered consistent policy combined with investment in infrastructure and enhanced diplomatic credibility and global trade connections.

In the same way Vietnam built a significant part of its economic success on geopolitical balancing — maintaining pragmatic relations with China, the US, and ASEAN neighbours – Morocco is similarly performing its own version of multipolar diplomacy. Investing in Africa, trading with Europe, and partnering with Gulf and Asian capital, Morocco has mastered the art of positioning itself as both African and global.

Rabat increasingly plays host to high-profile international events — from the IMF-World Bank Annual Meetings in 2023 to COP climate summits, and the United Nations Human Rights Council "retreat" last November. Promoting a moderate Islamic identity that resonates in multilateral forums, Morocco's soft power enhances its attractiveness to foreign investors as a stable, values-driven market in an era of geopolitical unpredictability.

A less quantifiable dimension of Morocco’s rise, this growing cultural and diplomatic influence, has seen Rabat play a quiet but strategic role on the international stage. The only African country with both Atlantic and Mediterranean coastlines, Morocco's deep ties with Europe and re-engagement with the African Union have made it an increasingly trusted voice in North–South dialogues.

Across Europe, the US and the MENA region, Morocco benefits from over 50 trade agreements, covering a market of more than 2 billion consumers.

In line with plans for accelerated industrialisation, foreign direct investment is increasing at a pace — particularly in sectors like automotives, aerospace, and renewable energy. Tanger Med, now Africa’s largest port, connects Morocco to over 180 ports worldwide, making it a key node in global logistics. In automotives, Morocco has overtaken South Africa as the continent’s largest exporter, with over 800,000 vehicles produced in 2024.

African Corridor

Just as Vietnam developed world-class industrial zones to attract global players, Morocco is scaling up investment in competitive industrial ecosystems. Casablanca Finance City (CFC), launched as a strategic initiative in 2010 and now has over 200 companies accredited, including major multinationals. Along with a low-tax, internationally aligned environment to support globally focused operations, CFC represents a cornerstone of Morocco’s wider strategy to link global capital with regional opportunity, reinforcing the city’s position as a dealmaking hub. According to recent OECD data, Morocco is now the second-largest investor in sub-Saharan Africa from within the continent, behind South Africa.

Building on the CFC initiative, the government’s “Pacte d’Investissement,” signed in 2022, set out to mobilise 550 billion dirhams ($60 billion) in private investment by 2026 with emphasis placed on industries that align with global demand trends: electric mobility, green hydrogen, sustainable agriculture, and digital services.

Combined with strategic investments in transportation and logistics, this is creating a new African corridor to Europe. Stellantis, Renault and BYD are among international conglomerates deepening their commitments. Bold moves in energy transition include a $6.4 billion EV battery gigafactory launched in 2024 by China’s Gotion High-Tech. 

Serving its commercial expansion, Morocco’s road and rail network — including Africa’s only high-speed rail line — is connecting industrial parks, ports, and city centres at growing speed. One flagship project is the Atlantic Port of Dakhla at the southern tip of Western Sahara, envisioned as a gateway for trade with ECOWAS countries such as Senegal, Côte d'Ivoire and Nigeria.

Diverging Markets

In contrast to Vietnam's stock market selloff this year, the Casablanca Stock Exchange underscores strong momentum. Trading volumes have risen sharply, new listings are gaining interest, and reforms — including the introduction of derivatives and a central clearinghouse — are focused on ultimately bringing Morocco back into MSCI’s Emerging Market Index, which it exited in 2013. If successful, this could attract billions in passive and institutional capital. Morocco’s main equity index has jumped 22 percent this year, vastly outperforming peers  

Like Vietnam, Morocco’s economic ascendency is part of a multi-year transition predicated on fundamental shifts at home and beyond. In recent years, Morocco has stood out among frontier markets for its consistent macroeconomic management. Inflation remained contained below 5% in 2023 despite global food and fuel shocks. The central bank, Bank Al-Maghrib, has maintained a cautious policy stance, keeping borrowing costs steady and foreign reserves well above the benchmark floor of five months of import cover.

Morocco’s fiscal consolidation is paying off too. After peaking during the pandemic, the budget deficit is narrowing, with debt-to-GDP expected to fall below 70% in 2025. This gives Morocco credibility at a time of fiscal instability across emerging markets. The IMF’s latest Article IV review, published in March 2025, praised Morocco’s progress, highlighting its structural reform agenda and resilience.

Off-Radar

While Vietnam remains a compelling long-term growth story, its exposure to the US trade war dynamic now carries heightened uncertainty. Investors are wary that Vietnam’s extraordinary rise is now levelling off.

Morocco, by contrast, far removed from Washington’s tariff radar, continues its ascendancy unencumbered. Morocco’s free trade agreement with the US, preferential access to the EU, and neutrality in most geopolitical conflicts makes the country attractive to multinationals, not only for cost competitiveness but also from a perspective of geopolitical de-risking.

Critically, while Vietnam has long held global investor and business attention — it ranks among the top three destinations for FDI into manufacturing in the ASEAN and its stock market is tracked by many of the world’s largest institutional investors – Morocco has appeared relatively overlooked. Despite its reforms and infrastructure investment, Morocco remains far less represented in global portfolios and benchmarks — and therein lies its upside. In a global environment hungry for supply chain alternatives and regional diversification, Morocco ticks many of the right boxes.

Morocco still has work to do. The country needs to further deepen capital markets, improve labour force participation, and modernise education to support its industrial ambitions. Like Vietnam, it must strike a balance between state involvement and private sector innovation.

But the direction is clear. From ports to policy, from green energy to governance, Morocco is laying the foundations to become a globally significant manufacturing and investment destination.

*Gavin Serkin is the author of Frontier: Exploring the Top Ten Emerging Markets of Tomorrow, and a Journalist and Consultant on emerging & frontier markets, with particular focus on Africa and the Middle East