Expert Nguyen Thanh Lam believes that despite the challenges posed by Donald Trump's second term, this event also brings opportunities for the Vietnamese economy and businesses.
The US presidential election has concluded, and all eyes are now on what the new administration of Donald Trump will do when it takes office in January 2025. There have been considerable concerns about the impact of this event on global economies, particularly global trade.
With its large, open economy, Vietnam could be significantly impacted by Trump's election. However, alongside the challenges, experts also believe this event presents opportunities for the Vietnamese economy and businesses.
Concerns about inflation and rising tariffs.
According to Heng Koon How, Head of Market Strategy, Global Market and Economic Research Unit, UOB Bank (Singapore), the policies that Trump desires all carry the risk of inflation.
During his campaign, Trump advocated for a series of escalating tariff measures. These tariffs ranged from a significant increase in trade tariffs on China to 60%, to a punitive 200% tariff on imported vehicles from Mexico. These tariffs would be added to the proposed overall tariff of 10% on all goods imported into the United States…
However, “these policies, even if only partially implemented, could cause inflation in the US economy. The Peterson Institute for International Economics has warned that Trump’s tariff proposals could cost a typical American household more than $2,600 a year. This higher inflation could lead to a shorter interest rate cut from the Fed than the market anticipates,” commented Heng Koon How.
Mr. Nguyen Thanh Lam, Director of Individual Client Analysis at Maybank Securities, also believes that Mr. Trump's re-election could have a strong impact on global supply chains, by increasing US import tariffs from China to 60% and from other countries to 10%.
According to Mr. Lam, this not only strongly impacts exporting countries like Vietnam but also increases the value of the US dollar globally as capital continues to flow into safe-haven assets. In addition, Trump's policies could cause US inflation to rise again, and the Federal Reserve (Fed) is unlikely to cut interest rates as aggressively as expected, leading to pressure on the exchange rate.
Challenges are inevitable; however, from a more optimistic perspective, Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, believes these risks have been exaggerated and there is no reason to worry that Trump's victory will derail Vietnam's economic growth.
According to Michael Kokalari, the recent US presidential election saw a great deal of exaggerated claims and sensationalized information from the media. This led many voters to feel that it was campaign information, rather than fair and objective information, but it also led to excessive concerns about the economic impact of a second Trump term.
"The threat of tariffs is largely being exaggerated. High tariffs may simply be a 'ploy' to garner support from one of Trump's key voter groups, the working class, and in negotiations, particularly with China," commented Michael Kokalari.
In fact, Trump assembled a team of highly knowledgeable and talented economic advisors who fully understood the negative consequences of imposing excessively high tariffs on imported goods into the U.S. These negative consequences included hindering the process of bringing manufacturing jobs back to the U.S., as high tariffs would drive up the value of the dollar.
Furthermore, Vice President-elect JD Vance also demonstrated a keen understanding of economics by pointing out that the role of the US dollar as a global reserve currency has led to its overvaluation – making it economically unfeasible to bring manufacturing jobs back to the US.
Meanwhile, the US economy is facing its worst period of "stagnant inflation" (meaning high inflation and low economic growth) since the 1970s. Imposing heavy taxes would exacerbate the strong inflation that the US economy is very likely to experience next year.
Find opportunities in challenges.
Despite the uncertain outlook from the US election, experts at UOB Bank believe that Southeast Asia, including Vietnam, will remain a stable region for economic growth and strong trade opportunities.
UOB forecasts that foreign direct investment (FDI) into Southeast Asia will increase by 38% to US$312 billion by 2027 and US$373 billion by 2030. Amidst the upcoming uncertainty for global trade arising from the US election, it is important to note the strong and supportive trade relationships established by the Association of Southeast Asian Nations (ASEAN).
Regarding Vietnam-US trade relations under President Trump, Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, believes there is no reason for Trump to target Vietnam when there is no significant opposition to the consumption of "made in Vietnam" products from American consumers.
In fact, Vietnam could help the U.S. break free from its dependence on cheap goods from China. Vietnam can produce goods that American consumers want but are too expensive to manufacture in the U.S.
The VinaCapital expert believes that Vietnam will continue to maintain stable development under the Trump administration. Vietnam's skillful "bamboo diplomacy" in maintaining good relations with major powers has helped the country achieve many successes, and there is no reason to believe this will change. Although the US may impose new tariffs on imported goods, the likelihood of imposing high tariffs (20-30%) on Vietnamese goods is very low.
"Even if the US imposes comprehensive tariffs (5-10%) on goods from all countries outside of China, Vietnam would still maintain an advantage in FDI inflows compared to its competitors. However, Vietnam needs to proactively consider ways to reduce its trade surplus with the US before this becomes a major concern for the new administration," Michael Kokalari analyzed.
Mr. Nguyen Thanh Lam, Director of Individual Client Analysis at Maybank Securities, also believes that despite the challenges posed by Mr. Trump's second term, this event also brings opportunities for the Vietnamese economy and businesses.
"Foreign direct investment (FDI) into Vietnam could increase further, similar to the situation during Trump's first term, because a 10% import tariff is still much better than 60%. In addition, new business opportunities may emerge in the energy, information technology, and aviation logistics sectors, as Vietnam may seek to import more goods and services from the US (such as LNG, software, etc.) to ease tensions with its partner," Mr. Lam stated.
Speaking at the Vietnam Investment Forum 2025, organized by Vietnambiz and Vietnammoi in Ho Chi Minh City on November 8th, Mr. Nguyen Ba Hung, Chief Economist of the Asian Development Bank (ADB), also commented that Mr. Trump's election victory will certainly affect world trade, although fulfilling his campaign promises remains uncertain.
Therefore, Vietnam, with its high degree of economic openness and high export-to-GDP ratio, will face significant challenges in global trade policy, especially in the US market.
"Besides continuing to leverage our advantages in foreign trade, we need solutions that balance with the domestic economy. We need measures to focus on stimulating domestic demand, encouraging the domestic economy to recover and develop better, and transforming it into a balancing force for economic growth," Mr. Nguyen Ba Hung proposed.
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