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Business Times
10-07-2025
- Business
- Business Times
Vietnam prepares for impact of 20% tariffs as investors back deal
[HANOI] Vietnam aims to sign more free trade agreements to diversify its export markets as it grapples with global uncertainty posed by the US tariff offensive. 'The global economy is being impacted by geopolitical competition, climate change, digital transformation, and especially tariff policies from major markets such as the United States,' Deputy Trade Minister Phan Thi Thang said at an investment summit in Hanoi on Wednesday (Jul 9). 'However, Vietnam still has many opportunities to break through.' Vietnam, an export powerhouse that last year had the world's third-biggest trade surplus with the US, is trying to navigate Washington's demands while keeping good relations with China, its biggest trading partner. The US has said a tentative deal has been reached, setting a 20 per cent levy on Vietnamese goods and 40 per cent on transhipments, which is mainly aimed at China. 'Electronic components, automobiles and textiles are facing tariffs from the US,' Thang said. 'But this is an opportunity to increase added value and to shift to high-tech products.' Vietnam's negotiators are still working to finalise the details of the trade deal announced by US President Donald Trump last week. The 20 per cent tariff was a significant reduction from the previously threatened 46 per cent rate and puts it ahead of regional rivals such as Thailand, Malaysia and Indonesia, who were sent letters on Monday setting out tariffs from 25 per cent upwards. While Vietnam currently holds a first-mover advantage in Asia, it's possible that neighbours will end up with lower levies. And it's unclear how the terms of the 40 per cent transhipment tariff will be enacted and enforced. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Still, investors in the nation's stock market see the 20 per cent tariff as 'good news', according to Thu Nguyen, deputy CEO of VinaCapital Fund Management, who expects to see more technology companies listing in Vietnam. Vietnam's stocks have rallied to a three-year high as trade tensions shifted to other Asian nations facing higher tariffs. Vietnam saw growth accelerate in the second quarter as foreign buyers raced to get ahead of higher Trump levies, but the uncertainty in global markets has put the central bank on standby to act to curb inflation and support growth. The nation is keeping its target of at least 8 per cent GDP growth this year, and will continue to strive for economic expansion of 10 per cent or above in 2026 to 2030, Deputy Prime Minister Ho Duc Phoc said at the same investment summit on Wednesday. One of the biggest sticking points throughout negotiations was Vietnam's trade relationship with China. The US demanded more action from Hanoi to prevent Chinese goods from being rerouted and repackaged through Vietnam to skirt higher tariffs. Beijing said it was examining the trade deal and would retaliate if its interests were hurt. BLOOMBERG
Bangkok Post
09-07-2025
- Business
- Bangkok Post
Vietnam to draw foreign inflows on lower-than-expected US tariff
HANOI — Foreign investors are expected to flock back to Vietnam's stock market after the country received a lower-than-expected US tariff, said Thu Nguyen, deputy chief executive officer of VinaCapital Fund Management. Vietnamese stocks benefited from the return of foreign investors after US President Donald Trump announced a trade deal with the Southeast Asian nation, Thu said in an interview with Bloomberg TV 's Haslinda Amin on the sidelines of an investment summit in Hanoi. A potential FTSE Russell market upgrade will also entice investors, she added. The tariff 'was interpreted by foreigners as a good deal for Vietnam,' she said. And that has 'translated into inflows in some of the mostly liquid companies in Vietnam,' Thu said. Trump last week said a 20% tariff will be placed on Vietnamese exports to the United States, with a 40% levy on any goods deemed to be transhipped through the country. Trump said that Vietnam had agreed to drop all levies on US imports. The benchmark VN Index has risen more than 3% since then, bringing the advance so far this year to almost 13%. Foreign sentiment appears to have improved after the 20% tariff announcement on July 2, with nearly 5 trillion dong (US$191.3 million) in foreign inflows recorded as of July 4, Bloomberg Intelligence analyst Sufianti wrote in a report Wednesday. Vietnam's negotiators are still working to finalise the details of the trade deal. The 20% tariff was a significant reduction from the previously threatened 46% rate and puts it ahead of regional rivals such as Thailand, Malaysia and Indonesia, who were sent letters Monday setting out tariffs from 25% upwards. Market watchers are also optimistic of a potential reclassification of Vietnam to secondary emerging-market status from frontier in September by the London-based global index compiler. FTSE had projected that Vietnam's stocks could draw as much as $6 billion in capital inflows following an upgrade.
Business Times
09-07-2025
- Business
- Business Times
Vietnam prepares for impact of 20% tariff as investors back deal
[HANOI] Vietnam aims to sign more free trade agreements to diversify its export markets as it grapples with global uncertainty posed by the US tariff offensive. 'The global economy is being impacted by geopolitical competition, climate change, digital transformation, and especially tariff policies from major markets such as the United States,' Deputy Trade Minister Phan Thi Thang said at an investment summit in Hanoi on Wednesday (Jul 9). 'However, Vietnam still has many opportunities to break through.' Vietnam, an export powerhouse that last year had the world's third-biggest trade surplus with the US, is trying to navigate Washington's demands while keeping good relations with Beijing, its biggest trading partner. The US has said a tentative deal has been reached, setting a 20 per cent levy on Vietnamese goods and 40 per cent on transshipments, which is mainly aimed at China. 'Electronic components, automobiles and textiles are facing tariffs from the US,' Thang said. 'But this is an opportunity to increase added value and to shift to high-tech products.' Vietnam's negotiators are still working to finalise the details of the trade deal announced by US President Donald Trump last week. The 20 per cent tariff was a significant reduction from the previously threatened 46 per cent rate and puts it ahead of regional rivals such as Thailand, Malaysia and Indonesia, who were sent letters on Monday setting out tariffs from 25 per cent upwards. While Vietnam currently holds a first-mover advantage in Asia, it's possible that neighbours will end up with lower levies. And it's unclear how the terms of the 40 per cent transhipment tariff will be enacted and enforced. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Still, investors in the nation's stock market see the 20 per cent tariff as 'good news', according to Thu Nguyen, deputy CEO of VinaCapital Fund Management, who expects to see more technology companies listing in Vietnam. Vietnam's stocks have rallied to a three-year high as trade tensions shifted to other Asian nations facing higher tariffs. Vietnam saw growth accelerate in the second quarter as foreign buyers raced to get ahead of higher Trump levies, but the uncertainty in global markets has put the central bank on standby to take steps to curb inflation and support growth. The nation is keeping its target of at least 8 per cent GDP growth this year, and will continue to strive for economic expansion of 10 per cent or above in 2026 to 2030, Deputy Prime Minister Ho Duc Phoc said at the same investment summit on Wednesday. One of the biggest sticking points throughout negotiations was Vietnam's trade relationship with China. The US demanded more action from Hanoi to prevent Chinese goods from being rerouted and repackaged through Vietnam to skirt higher tariffs. Beijing said it was examining the trade deal and would retaliate if its interests were hurt. BLOOMBERG
