In the wake of Donald Trump's re-election on November 5, 2024, Vietnam's leaders are expressing a mix of optimism and concern regarding the future of Vietnam-U.S. relations. Prime Minister Nguyen Xuan Phuc has reiterated support for strengthening bilateral ties, hoping for a trajectory similar to Trump's first term. Hai Hong Nguyen, a senior lecturer at VinUniversity, believes there are solid grounds for optimism regarding the partnership. However, recent comments from Vietnam's new president, Luong Cuong, at the APEC CEO Summit in Lima, Peru, highlight significant concerns about Trump's trade policies. Cuong warned that isolationism and trade wars could lead to recession and poverty, emphasizing that Vietnam's economy, which relies heavily on exports, could be adversely affected. Cuong pointed out that Vietnam's economy relies on exports for 85% of its GDP, and the nation has a $100 billion trade surplus with the U.S. [dbce01c5][f061ed8f]
As the U.S. presidential election approached, the potential impacts on global trade and investment became increasingly evident, particularly for Vietnam. Finnomena, a financial services firm, identified the U.S., India, and Vietnam as key investment markets to mitigate the expected impact of import tariffs under Trump. CEO Jessada Sookdhis noted that U.S. medium-sized and small businesses in sectors such as banking, energy, and industry could benefit from anticipated corporate tax reductions. [6968b4d4]
Vietnam has experienced remarkable growth in exports, averaging a 15.3% increase annually from 2018 to 2023. In the first nine months of 2024, exports to the U.S. surpassed $89 billion, resulting in a significant trade surplus of $78.5 billion, a 31% increase year-on-year. However, both Trump and Kamala Harris have proposed raising import taxes, with Trump suggesting a 10-20% tax on imports and Harris advocating for tax credits to support domestic industries. Experts predict that regardless of the election outcome, U.S. trade policies will likely remain protective of American businesses, which could reshape the trade landscape for countries like Vietnam. [263c463f]
In a surprising twist, Trump's election has also unexpectedly boosted Chinese firms, particularly in Yiwu, where merchandise orders for Trump-themed products have skyrocketed. Over 1,000 Trump-related products are now available on platforms like Amazon, with a red 'Make America Great Again' hat selling over 10,000 units in just a month. E-commerce merchant Ricky Luo reported a surge to 3,000 orders in one night post-election, generating over $20,000 in two days from U.S. and Japan orders. [46c6cc28]
During a phone call on November 11, 2024, Vietnam's Communist Party leader To Lam congratulated Trump on his election victory. They discussed enhancing economic ties between the two countries, emphasizing that the U.S. is Vietnam's largest export market. In September 2023, Vietnam and the U.S. upgraded their relationship to a comprehensive strategic partnership, and Lam expressed Vietnam's readiness to promote stable bilateral relations. Trump acknowledged the importance of Vietnam-U.S. economic cooperation, and both leaders extended invitations to visit each other's countries. Trump had previously visited Vietnam twice during his first term, attending an APEC summit and meeting Kim Jong Un. [f7b0ad42]
Finnomena's analysis suggests that India and Vietnam will benefit from manufacturing relocations from China, particularly as Trump plans to increase tariffs on Chinese goods by four times and global goods by 10%. Economists predict a 2% GDP impact on China, while Thailand may benefit from geopolitical easing and production relocations. Arm Tungnirun expressed surprise at Trump's election win and warned of increasing Chinese products in Thailand's market. [6968b4d4]
As the election nears, the implications for Vietnam's economy and its export capabilities remain a focal point for businesses and policymakers alike. Cuong's emphasis on adherence to international law and fair competition reflects Vietnam's commitment to navigating the evolving trade landscape effectively. He warned against imposing new trade standards without scientific rationale, which could stifle job opportunities and innovation. The interconnectedness of global trade and domestic political outcomes highlights the need for Vietnamese businesses to strengthen ties with U.S. partners to mitigate potential challenges. Cuong has set a target of 6.5% to 7% economic growth for 2025, showcasing Vietnam's resilience despite recent challenges, including damage from Super Typhoon Yagi. [263c463f][dbce01c5][f061ed8f]