President Donald Trump recently announced a promising development in trade discussions with Vietnam, indicating a potential shift toward zero tariffs. The news came after a fruitful conversation with To Lam, General Secretary of the Communist Party of Vietnam.
The New York Post reported that Trump and Lam discussed the possibility of removing all tariffs between the two nations, contingent upon securing a free trade agreement. This dialogue occurred during a phone call on a Friday, proving that Trump's tactics are already getting results.
Vietnam expressed its desire to eliminate tariffs as part of broader efforts to enhance bilateral relations and economic partnerships.
This move is seen as a significant step towards deepening economic ties and encouraging mutual growth.
Vietnam has already taken proactive steps by eliminating at least 23 tariffs on U.S. imports. These actions occurred just two days before Trump's announcement and are part of Vietnam's strategy to avoid potential trade disputes.
Following the announcement, there was a noticeable boost in the stock market, particularly for companies with substantial manufacturing ties in Vietnam. Brands such as Nike, Lululemon, American Eagle, and others saw their shares increase, despite broader market downturns.
Major stock indexes had been experiencing declines for two consecutive days before this uplift. The positive reaction highlights the substantial impact of tariff negotiations on global markets.
Representatives from industries like apparel, where Vietnam plays a crucial role as a supplier, particularly noted the positive shift. Vietnam is known as the largest global supplier of footwear for brands like Nike and Adidas.
In the past year, trade between the U.S. and Vietnam totaled approximately $149.6 billion. However, the trade balance is skewed, with U.S. imports from Vietnam vastly outpacing exports.
Products such as toys, furniture, and apparel constitute the bulk of U.S. imports from Vietnam. Notably, nearly a third of all U.S. footwear imports in 2023 originated from Vietnam, underlining the country's significant role in American retail markets.
Despite the potential benefits, the conversation also touched on challenges, such as the proposed global tariffs, which could see rates as high as 46%.
These tariffs, set to be implemented from April 9, have been temporarily delayed following a request from Vietnamese Deputy Prime Minister Ho Duc Phoc for a three-month postponement.
Furthering economic ties, Vietnam is preparing additional pathways for American investments, particularly in technology sectors. These initiatives are part of broader efforts to strengthen the economic relationship between the two nations.
Trump's conversation with Lam not only focused on tariff elimination but also paved the way for heightened cooperation and investment between the U.S. and Vietnam. In his remarks, Trump expressed gratitude and anticipation for future meetings, which could seal the agreement.
"Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their tariffs down to ZERO if they can agree with the U.S.," Trump remarked. He added, "I thanked him on behalf of our country and said I look forward to a meeting shortly."
This dialogue between U.S. and Vietnamese leaders signifies a potential turning point in international trade policies, with substantial implications for global markets, especially in sectors reliant on Vietnamese manufacturing.