The recent escalation of the US–China trade war since 2018 has reshaped the global investment landscape and encouraged the relocation of supply chains, positioning Vietnam as a major beneficiary. The surge in Foreign Direct Investment (FDI) into the country is predominantly concentrated in the manufacturing and technology sectors. This study analyses the role of Vietnam’s political and economic policies in attracting FDI through a neo-mercantilist approach. The findings indicate that Vietnam’s success is driven not only by geographical factors and labour costs, but also by strategic state interventions, including fiscal incentives, investment deregulation, bureaucratic reform, and the development of industrial zones and trade agreements. Nevertheless, Vietnam still faces significant challenges, including dependency on Chinese raw materials, vulnerability to US tariff measures, and persistent issues related to corruption and legal inconsistent application. These findings underscore that amid growing turbulence in the global economic landscape, a hybrid approach combining market liberalization with strategic state intervention is key for developing countries, such as Vietnam, to maintain their competitiveness. This study recommends strengthening regulatory transparency and enhancing domestic industrial capacity as a foundation for sustainable, long-term economic growth.