Policy commitments

Coming from a business background, from a famous billionaire, Mr. Donald Trump entered the election campaign differently from many previous presidents. Just like the election campaign for the 2017-2021 term, in the few years of running for the 47th presidential term, Mr. Trump continued to focus on economic and security issues, steadfastly and consistently.

Economically, the prominent policy commitments are still taxes and fossil energy, along with the deportation of illegal immigrants… to “start a completely new economic boom”.

Mr. Trump's commitments are very strong and could change, even reverse many of the current administration's policies.

Import taxes will be pushed up very high, from 10-20% for most goods from other countries, even up to 60%, making it very difficult for goods to enter the US. Taxes on American businesses and people will be greatly reduced, with the aim of protecting American industry, encouraging domestic production, reducing dependence on foreign goods, creating jobs and increasing income.

During his previous term, Mr. Trump imposed 10% and 25% tariffs on aluminum and steel imports from Canada and the EU, respectively. Mr. Trump launched a trade war with China, imposing import tariffs of up to 25% on hundreds of billions of dollars of goods.

Another noteworthy point is that Mr. Donald Trump tends to want to influence the policy of the US Federal Reserve (Fed) – the US central bank – as he did in his first term, with the tendency to not want the USD to be too strong or too weak, thereby supporting exports. He wants “the right to express opinions” on monetary policy, instead of the complete independence of the Fed.

Mr. Donald Trump. Photo: ITR

In addition, Mr. Trump also aims to cut energy costs in half within a year of taking office by accelerating oil and gas exploitation, reducing policy barriers to the construction of power plants... to reduce inflation.

What is the impact on Vietnam?

So, in just about 2 months, Mr. Trump will enter the White House and may quickly make shocking statements and decisions like in his previous term. Mr. Trump may propose a general tax rate of 10% to 20% on all imported goods. 

Vietnam has been a country with a trade surplus with the US for many years now, so will it be affected by the tax policy of the new White House owner, how much will it be affected, and will there be any exceptions for it? Ha Noi?

Mr. Luu Chi Khang, Director of the Research Center, Vietnam Construction Securities Joint Stock Company CSI, said that there is no need to be pessimistic, it could even be positive. Accordingly, Mr. Trump promised to issue a protectionist trade regime, applying a 10% tax on all imported goods and a 60% tax on imported goods from China if he wins the election. This will cause the capital flow of many Chinese enterprises exporting to the US to find ways to relocate, one of the destinations is Vietnam. Therefore, Vietnam may benefit. The first and strongest group of industries to benefit is industrial park real estate.

In fact, in the 6/11 trading session, right after Mr. Trump won the election, a series of Vietnamese industrial park (IP) real estate stocks such as KBC, VGC of Viglacera, SZC of Sonadezi Chau Duc, SIP of Saigon VRG Investment JSC... all increased to the ceiling.

Mr. Khang said that after industrial real estate, export industries are the ones. Although they may be subject to a 10-20% tax, it is still lower than the committed tax rate of 60% for the second economy. world. Some businesses can benefit from export market share to the US. Notable among them are the wood and seafood industries. Textiles and garments will also benefit, but there will be competition from other businesses, including Chinese ones, that want to do business in Vietnam.

Mr. Khang acknowledged that Mr. Trump also protects and promotes the US oil production industry, so it is possible that Vietnamese oil and gas exploration and exploitation enterprises will benefit, but the level of benefit is not large. As with the green energy industry, Mr. Trump cut aid to this group.

CSI experts believe that exported phones and components will be affected by taxes. Enterprises Travel, getting a visa in the US will also face difficulties due to Mr. Trump's new immigration policy... With the trade protection policy, many businesses in the US are unlikely to be interested in investing in Vietnam, especially in the renewable energy industry.

Mr. Le Quang Tri - Director of Brokerage at Nhat Viet Securities JSC also shares the same opinion, saying that some industry groups are expected to benefit if Donald Trump is elected such as: industrial park real estate, seafood, wooden furniture, textiles...

According to Mr. Tri, the new owner of the White House may promote protectionist policies and impose high taxes on imported goods from China, causing US companies to shift production to other countries, including Vietnam. Vietnamese seafood, such as pangasius and shrimp, can replace products from China in the US, creating conditions for export growth. Vietnamese wood products have the potential to replace Chinese goods in the US market, especially when the US imposes high taxes on products from China.

Vietnamese textile products have the opportunity to replace Chinese goods in the US market, but may also face the risk of higher tariffs when exporting to the US. China's technology restriction policy may open up opportunities for Vietnamese electronic products to access the US market.

These industries could benefit from Trump's protectionist policies and preference for domestic production, especially in the context of shifting global supply chains.

Meanwhile, the USD not being too strong under Mr. Trump is considered a factor that helps countries reduce pressure on exchange rates, thereby implementing solutions to support economic growth.

However, all of these are just policy commitments to voters. Only by how much protectionism Mr. Trump implements, and how much he applies to which country’s goods, can we more clearly assess the impact. And will the new White House owner make any exceptions? As well as the policies between the parties are also very important.

The world is learning how serious Mr Trump is about taxing all imports from the world to the US, from allies and other countries alike.

Mr. Michael Kokalari, Director of Macroeconomic Analysis and Market Research at VinaCapital, said that Mr. Trump's re-election will not have a major impact on Vietnam's economy.

VinaCapital believes that the risks and threats of tariffs are largely exaggerated and overblown, and there is no reason to worry that a Trump victory will derail Vietnam’s healthy economic growth. During the election campaign, there were many exaggerated statements and exaggerated information from the media.

Mr. Trump wants Chinese manufacturers to build factories in the United States and hire American workers, just as Japan did in the 1980s and 1990s, Mr. Kokalari said. The 60% figure may just be a bargaining chip in negotiations with China.

In fact, Mr. Trump has a very knowledgeable and talented team of economic advisers, and they are fully aware of the negative consequences of imposing heavy tariffs on goods imported into the United States. These negative consequences include discouraging the return of manufacturing jobs to the United States, because high tariffs drive up the value of the dollar.

Moreover, Vice President-elect JD Vance also showed his economic acumen when he pointed out that the role of the USD as a global reserve currency has led to an overvalued USD – which makes it economically unviable to bring manufacturing jobs back to the US. Heavy tariffs would exacerbate this problem.

According to Mr. Kokalari, the US is expanding positive economic relations with Vietnam, at the highest level of Goverment America. Moreover, Mr. Trump is a populist, and Vietnam is highly regarded by American voters. VinaCapital does not see any significant opposition to the consumption of “made in Vietnam” products from American consumers.

In fact, Vietnam could be seen as a useful partner in helping the US move away from its dependence on cheap goods from China, as high wages and a scarcity of skilled factory workers will limit US efforts to bring manufacturing jobs back, focusing only on high-value-added products.

In short, Vietnam can produce goods that American consumers want to buy but are too expensive to produce in the United States, and Mr. Trump would prefer if they did not buy from China.

Vietnamnet.vn

Source: https://vietnamnet.vn/nhung-cam-ket-chinh-sach-cua-ong-trump-se-tac-dong-toi-kinh-te-viet-nam-ra-sao-2339848.html