Vietnam Economic News: 28.6 – 5.7.2025
Summary of Vietnam Economic News: 28.6 - 5.7.2025
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Summary of Vietnam Economic News: 28.6 - 5.7.2025 ---
TRUMP READIES TARIFF LETTERS IN WAKE OF VIETNAM DEAL
Reuters News – 4 July 2025
Vietnam trade deal sends a strong signal that tariffs on other countries won't hover near the universal 10% mark--they will be higher, says Ipek Ozkardeskaya at Swissquote Bank. Trump earlier told reporters that the U.S. would start sending letters to countries detailing tariff rates, which could range from 60% or 70% to 10% and 20%. "We'll probably have 10 or 12 go out tomorrow, and over the next few days." Trump called the rates a "bargain," adding: "I don't want to stretch it too much. We want to keep it pretty reasonable." For smaller countries, tariffs would pretty much be kept the same, he said. Asked if there would be flexibility on when countries would start paying, he said: "Not really, they'll start to pay on August 1."
NEW U.S. TARIFF RATE PUTS VIETNAM'S GDP AT RISK
Reuters News – 3 July 2025
Higher U.S. tariffs on transhipped goods through Vietnam will likely impact Vietnam's economy more than those on other goods, Deepali Bhargava of ING writes in a note. The new 20% U.S. tariff rate on Vietnam's exports could put 2.5% of its GDP at risk, but the 40% tariff targeting transhipments will hit it harder, Bhargava says. Such flows from China have risen recently and will impact exports, with studies estimating that "indirect Chinese content" in Vietnam's exports to the U.S. ranged between 16%-28% in 2021/2022, Bhargava says, noting that some companies label "Made in Vietnam" on China-made goods, "making it an illegal but difficult-to-trace practice."
U.S.-VIETNAM TRADE DEAL ISN'T ENOUGH, FOOTWEAR GROUP SAY
Dow Jones Newswires – 2 July 2025
The Trump administration's deal to lower proposed tariffs on goods from Vietnam to 20% from 46% isn't enough to help footwear retailers, according to Matt Priest, who heads the Footwear Distributors and Retailers of America. Vietnam accounted for $10.6 billion in shipments last year and is on pace to become the biggest supplier for the U.S. footwear industry this year, he says. "Disrupting that pipeline with additional tariffs would hit American consumers and our industry hard," he says. He urges the administration to acknowledge steep footwear duties already in place and avoid adding more strain.
NIKE INVESTORS CELEBRATE U.S. TRADE DEAL WITH VIETNAM
Dow Jones Newswires – 2 July 2025
The Trump administration's latest trade deal is welcome news for Nike investors. The deal lowers proposed tariffs on goods from Vietnam, where Nike sources much of its sneakers and apparel. The news removes some uncertainty on the sportswear giant's tariff-related cost increases, which has fuelled investor fears more than the actual severity of tariff policies, BMO Capital Markets analyst Simeon Siegel says. "Before you can fix the problem, you need to diagnose it. Today felt like a step closer to diagnosis," he tells WSJ. Last week, the company had warned of a gross incremental cost increase of about $1B due to tariff rates in place. Nike climbs 4%.
NIKE, LULULEMON, AND MORE RETAIL STOCKS RISE ON VIETNAM TRADE DEAL
Dow Jones Newswires – 2 July 2025
Retail stocks with heavy exposure to Vietnam were rising Wednesday after President Donald Trump announced a trade deal with Vietnam that would lower tariffs on goods imported to the U.S. from there to 20% from the 46% announced back in April. The biggest movers were apparel companies that manufacture their goods in Vietnam, such as Nike, Lululemon, and Lands' End. While the SPDR S&P Retail ETF rose just 0.5% on the news, Nike rose more than 3%, Lululemonwas up 0.6%, and Lands' End rose more than 4%. On Holding, which makes most of its sneakers in Vietnam, was also up more than 3%. Other retail stocks were mixed, with Best Buy up nearly 1% and Walmart down 1%. Trump's tariffs on goods from Vietnam were among the highest announced on his "Liberation Day" in April. He quickly put these so-called reciprocal tariffs on a 90-day hold pending trade negotiations. With that new deadline approaching on Wednesday, the pressure is on the administration to make and announce more deals. Some countries may get more time, however. Treasury Secretary Scott Bessent said back in June that the U.S. would "roll the date forward to continue good faith negotiations."