How Trump's presidency could affect Vietnam's economy, stock market
Donald Trump’s election as the United States' 47th President could have a strong impact on Vietnam's economy and stock market, say some Vietnamese analysts.

Steel products at a Hoa Phat factory. Photo courtesy of the company.
Nguyen The Minh, director of analysis at Yuanta Vietnam Securities, argued that Vietnam would face "many economic challenges".
"Most notably, Vietnam is considered by the U.S. as one that causes a trade deficit. This perception leads to import tariffs and anti-dumping measures as the country is still classified as a non-market economy with a large trade surplus with the U.S.," Minh told The Investor.
In the first 10 months of 2024, the U.S. was Vietnam's largest export market with a turnover of $98.4 billion, while China was the Southeast Asian country's largest import market with $117.7 billion, according to the General Statistics Office.
Currently, Vietnamese products that have very low import tariffs in the U.S. market are wood (0%), seafood (0%), and tires and tubes (4%). Meanwhile, textiles, steel, and galvanized steel are all subject to quite high levies, from 8-25%. Most of these products are not subject to anti-dumping tax.
But U.S. investigations into the origin of Vietnamese goods might become more stringent to ensure that Chinese businesses would not be able to avoid taxes via Vietnam.
On the other hand, reduced demand in the U.S. could cause cheap Chinese goods to flood into other markets, hurting industries in those regions, including Vietnam.
Another disadvantage comes from exchange rate issues. According to ACBS Securities, the Vietnamese dong (VND) in the short term is likely to face greater downward pressure because all the policies proposed by Trump could increase the value of the USD.
Measures such as tariffs on imports and corporate tax cuts are expected to strengthen the USD. In the short term, a stronger USD would increase the risk of depreciation for the VND. Additionally, if U.S. economic indicators remain strong, tax cuts could provide support for U.S. businesses and consumers.
However, higher import costs could cause inflation risks in the U.S., potentially slowing the Fed’s interest rate cuts. A prolonged period of high USD interest rates would increase pressure on VND.
If VND interest rates go north, it would affect the recovery ability of domestic businesses. Profits of the Vietnamese banking industry might be negatively affected. Businesses with high debt costs, especially USD debts, would be negatively impacted.
Minh expects that U.S monetary policies would be operated more flexibly under the Trump administration.
“President Donald Trump supports reducing interest rates, as shown in his policy proposals during the election campaign. I expect a cycle of strong interest rate cuts to support the U.S. economic recovery. Thereby, Vietnam would benefit. Vietnamese enterprises involving areas like seafood, textiles, furniture, stone and logistics would receive positive impacts,” he noted.
Besides, the U.S. raising taxes on imported goods would bring many advantages to Vietnam. Vietnam would benefit from a wave of FDI shifts, with the group most positively affected being industrial park developers.
Historic records show that in the 2018 U.S.-China trade war, President Trump’s decision to tax Chinese goods caused many businesses to move production chains out of China, and Vietnam was one of the destinations.
ACBS added that a number of export business groups that can prove the origin of their goods would benefit. Goods flowing directly or indirectly from China through Vietnam into the U.S. would also bolster profit growth for transportation and warehousing businesses.
Impact on Vietnamese stocks
Minh noted that VN-Index has gone through a trading period with low liquidity due to investor concerns.
“Let's look back at the previous U.S. presidential elections. Before the elections, the liquidity of VN-Index was low and it was less volatile, even negative. But after the elections with new U.S. presidents announced, the index always increased quite positively,” Minh said.
"In the short term, the index may be affected by strong fluctuations and corrections for a few sessions, but the trend is positive in the next few months, even within next year. VN-Index on Wednesday traded quite positively with a rise of 15.25 points,” he added.
However, Minh emphasized that President Trump is known for making many unpredictable decisions, therefore, the Vietnamese stock market might react negatively in the early stages.
Agreeing with Minh, experts from ACBS Securities believe that short-term risks for VN-Index and the Vietnamese stock market might be higher given the Trump administration.
This is mainly due to uncertainties that Trump may bring to the global economic and financial environment. Equity markets often treat uncertainty as “negative” at an early stage and only later could they assess its true impact, they added.
Donald Trump has won the 2024 election and will be President for a second time. Trump’s win marks a stunning political comeback for the former President and celebrity businessman after he lost in 2020 to Joe Biden. His first term as head of the White House is from 2016-2020.
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