Economic risks exaggerated after Trump's victory, should Vietnam worry?

Many countries are concerned about the impact of Donald Trump’s economic policies on their economies during his upcoming US presidency. But according to VinaCapital, these risks may be exaggerated.

American consumer goods imported into Vietnam are well received by consumers - Photo: QUANG DINH

After Donald Trump won the recent US presidential election, attention is turning to the economic policies the new administration will implement when he takes office in January 2025.

Tariff concerns may be overblown

Many countries are concerned about the impact of this event on their economies, but according to Michael Kokalari, CFA, director of macroeconomic analysis and market research at VinaCapital, these risks may be exaggerated.

The first and most important reason is that the recent US presidential election recorded a lot of exaggerated statements and exaggerated information from the media, which made many voters feel like it was information for campaigning instead of fair and objective information.

"There is no reason to worry that Mr. Trump's victory will hinder Vietnam's steady growth," said VicaCapital expert.

Mr. Trump has proposed imposing high tariffs on imports, especially from China, as part of a campaign to appeal to working-class voters. However, VinaCapital believes that this is a tactic to gain leverage in negotiations and the possibility of applying such high tariffs in practice is very low.

Mr. Trump's current team of economic advisers is considered to be highly qualified and will carefully consider the impact of increasing tariffs on imports, in order to avoid causing negative consequences for the US economy.

Although Mr. Trump aims to limit imports from China, Vietnam is not on the list of main target countries. Mr. Michael Kokalari emphasized that the US is actively expanding economic relations with Vietnam, and "made in Vietnam" products are positively received by American consumers.

The Trump administration may see Vietnam as a useful partner in reducing its dependence on goods from China, especially for high-value products that the US cannot produce domestically.

"Vietnam can produce products that American consumers want to buy but are too expensive to produce in the US, and Mr. Trump would like it if they did not buy from China," the expert said.

Consider Vietnam's trade surplus with the US

Mr. Tran Nhu Tung, Vice President of the Vietnam Textile and Apparel Association and Director of the Sustainable Development Committee, said that in the short term, the textile and garment industry will benefit if the US increases tariffs on imports from China as President Trump said before the election. In the first months of 2024, textile and garment exports to the US will continue to increase, especially as suppliers stock up on purchases before the election.

However, Mr. Tung said that Vietnamese businesses have prepared in advance and need to implement those plans well. "In addition, we need to focus more on ESG policies and traceability of goods. This is something the US is tightening to avoid fraud of Chinese goods," Mr. Tung said.

It is worth noting that Vietnam currently has a large trade surplus with the US, estimated at around $100 billion last year. This could become a problem for the Trump administration.

According to lawyer Tran Anh Duc (Ho Chi Minh City Bar Association), the trade surplus between Vietnam and the US is at a high level and will continue to increase in the coming time. In that context, there is a trend of Chinese enterprises investing in Vietnam to find production facilities, which brings great opportunities along with challenges.

"Vietnam is in a good position to benefit from the global trade shift and changes in supply chains. But the important thing is to move forward and climb higher in the value-added chain," said Mr. Joon Suk Park, an expert at HSBC.

Source: https://tuoitre.vn/rui-ro-kinh-te-bi-phong-dai-sau-chien-thang-cua-ong-trump-viet-nam-co-nen-lo-lang-202411080841035.htm