Trump's tariffs could impact 6 groups of Vietnamese exports?
VTC News•30/11/2024
(VTC News) - VNDirect Securities Corporation has just analyzed and commented on the impact of the tariff policy applied by US President-elect Donald Trump after taking office.
According to VNDirect, a 60% tariff on imports from China and a 10-20% tariff on all imports could have a significant impact on the global economy. Meanwhile, for the US, the tariff increase could increase inflation, reduce domestic demand, leading to a forecast 1% decrease in US GDP growth. “ We believe that Vietnam’s trade position, with the US being the largest export market, accounting for about 29% of exports, could be strengthened, even increasing market share, thanks to the tariff difference with China ,” VNDirect said in its recent macro update. Commenting on the impact of the tariff increase on each export group, VNDirect also said that the impact from the imposition of additional tariffs (potential risks) will vary, depending on each item, the proportion of exports to the US and the level of competition from US domestic substitutes or other export competitors in the same segment. " We assess the impact of the tax increase on six main export groups from Vietnam to the US, including: electronic products, textiles and footwear, machinery and equipment, wood and wood products, seafood and iron and steel. These products account for nearly 80% of the value of US imports from Vietnam in 2023 ," VNDirect said.
VNDirect comments on tax rates on imported goods to the US under Donald Trump. (Illustration photo).
According to VNDirect, while consumer goods exports may be affected by higher inflationary pressures, export products serving US businesses will benefit from corporate income tax cuts and the removal of restrictive regulations. Experts also recommend that operators closely monitor exchange rate fluctuations, especially at the time of the Fed meeting in mid-December and Mr. Trump's inauguration in January 2025. Although the State Bank intervened promptly in the last weeks of October, the VND continued to depreciate in the first two weeks of November and by 4.7% compared to the beginning of the year as of November 19 due to the increase in DXY after the US election and the increased demand for USD to pay the debt obligations of the State Treasury. In the new context, VNDirect believes that the Vietnamese economy can still maintain stable growth in 2025 based on the internal strength that has been consolidated over the past years. However, VNDriect has revised its 2025 GDP growth forecast down to 6.6% from 6.9% previously to reflect the potential impact of rising global trade protectionism and a strong US dollar. According to VNDirect experts, to prepare for changes in US trade policy, Vietnam needs to strengthen its position as a reliable trade partner by increasing transparency in the trade sector and making notable efforts to reduce the US trade deficit with Vietnam through increased imports, negotiating and signing major trade agreements, such as those related to LNG gas and purchasing aircraft from US manufacturers. In addition, to minimize the risk of becoming a transit hub for Chinese exports to the US, Vietnam needs to continue implementing trade defense measures to deal with Chinese goods showing signs of "evading US taxes".
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