Trump posts on Truth Social:
I just made a Trade Deal with Vietnam. Details to follow!
Vietnam has a large trade deficit with the US and is a key manufacturer of low-cost goods, like shoes. Shares of Nike dipped on the details, which Trump has now announced:
It is my Great Honor to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam after speaking with To Lam, the Highly Respected General Secretary of the Communist Party of Vietnam. It will be a Great Deal of Cooperation between our two Countries. The Terms are that Vietnam will pay the United States a 20% Tariff on any and all goods sent into our Territory, and a 40% Tariff on any Transshipping. In return, Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade. In other words, they will “OPEN THEIR MARKET TO THE UNITED STATES,” meaning that, we will be able to sell our product into Vietnam at ZERO Tariff. It is my opinion that the SUV or, as it is sometimes referred to, Large Engine Vehicle, which does so well in the United States, will be a wonderful addition to the various product lines within Vietnam. Dealing with General Secretary To Lam, which I did personally, was an absolute pleasure. Thank you for your attention to this matter!
Evidently, Nike shareholders (at least) were hoping for a lower tariff rate. Better get your shoes before that 20% kicks in.
Trump seems to think that Vietnamese consumers want to buy American SUVs.
For broader markets, this is showing that Trump is winning in his agenda. He talked about ‘reciprocal’ trade but this is heavily one-sided.
This article was written by Adam Button at www.forexlive.com.