Trump's global &#34;tariff stick&#34; has finally landed, and Vietnam, which heavily relies on exports to the U.S., has become one of the biggest victims.
According to CCTV News, on April 2 local time, the U.S. announced a 10% &#34;baseline tariff&#34; on all countries and imposed personalized higher &#34;reciprocal tariffs&#34; on countries with the largest trade deficits with the U.S., with tariffs on imports from Vietnam reaching as high as 46%, far exceeding those of most other countries. The tariffs will officially take effect on April 9.
This clearly exceeded market expectations, and following the announcement of the tariffs, global stock markets plummeted, with the Vietnamese stock market experiencing a direct crash. By the close on Thursday, the VN Index of Vietnam fell by 6.7%, marking the largest single-day drop since 2001.
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At the same time, several American companies that rely on Vietnamese manufacturing saw their stock prices plummet, with Nike dropping over 11% in pre-market trading on Thursday and Adidas falling over 7%.
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This tariff policy may mean a need to reassess global supply chain strategies, especially for companies with significant manufacturing investments in Vietnam or those that rely on imports from Vietnam, which face significant risks.
<h2>Can the 8% economic growth target still be maintained?</h2>
The U.S. is Vietnam's largest export market, with Vietnam's exports to the U.S. reaching as high as $142 billion in 2024, accounting for nearly 30% of its GDP. However, Vietnam's trade surplus with the U.S. reached over $120 billion in 2024, making it the third-largest source of the U.S. trade deficit. This enormous surplus is the main reason for the dissatisfaction of the Trump administration.
This also means that the tariff policy of the Trump administration will have a direct and substantial impact on the Vietnamese economy. According to previous analysis by Goldman Sachs, if the U.S. raises tariffs on Vietnam by 10%, Vietnam's GDP growth could be dragged down by about 1%. Now, a 46% tariff will have an even more severe impact on the Vietnamese economy.
In this context, Vietnam's target of at least 8% economic growth this year undoubtedly faces significant challenges.
In light of this severe situation, Vietnamese Prime Minister Pham Minh Chinh immediately convened an emergency government meeting to discuss response strategies after Trump announced the tariff policy. In a government statement issued after the meeting, Vietnam still maintains its target of at least 8% economic growth for this year.
Prime Minister Pham Minh Chinh stated:
<blockquote>
This is an opportunity to adjust the economic structure and achieve rapid and sustainable development... to expand the market, diversify product markets and supply chains, and promote localization
Previously, Vietnam attempted to avoid the impact of U.S. tariffs through a series of &#34;charm offensives,&#34; including reducing import tariffs on the U.S. and even providing support for the Trump Organization's golf courses and hotel investments in Vietnam. However, these efforts clearly failed, and U.S. tariff policies were still implemented.
</blockquote>
<h2>Who Will Be Most Affected?</h2>
The new U.S. tariff policy on Vietnam is expected to significantly impact American companies that rely on Vietnamese manufacturing, particularly in the apparel, footwear, furniture, and toy industries.
In the footwear industry, half of Nike's shoes and nearly one-third of its apparel production are concentrated in Vietnam. Adidas relies on Vietnamese factories for 39% of its footwear and 18% of its apparel. Other major footwear brands, such as Deckers Brands (the parent company of UGG and Hoka) and VF Corporation (the parent company of Vans), also heavily depend on Vietnam's production capacity.
According to data from the Footwear Distributors and Retailers of America (FDRA), nearly one-third of U.S. footwear imports in 2023 came from Vietnam, highlighting Vietnam's position in the U.S. footwear supply chain.
The furniture industry is also facing challenges. According to investment bank Mann, Armistead &amp; Epperson, 26.5% of U.S. furniture imports in 2023 came from Vietnam. Wayfair, the largest home e-commerce company in the U.S., has close cooperation with Vietnamese furniture manufacturers, and Wayfair's stock price plummeted over 18% in pre-market trading.
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In the toy industry, well-known toy manufacturers such as Hasbro, SpinMaster, Mattel, and Crayola have established close partnerships with Vietnam's GFT Group. This group operates five production facilities in northern Vietnam and employs over 15,000 workers.
What should manufacturers do next? Michael Mathias, Chief Financial Officer of American Eagle Outfitters, a U.S. jeans and apparel brand, stated in a previous earnings call that the company plans to reduce its production in Vietnam to single digits.
<h2>The Dilemma of Global Supply Chain Restructuring: A Zero-Sum Game with No Winners?</h2>
From the current situation, Trump's tariff policy may not only fail to promote the return of U.S. manufacturing but may instead exacerbate the risk of a global economic recession, resembling a &#34;killing a thousand enemies while self-inflicting eight hundred damage&#34; zero-sum game.
After the announcement of the tariff policy, global stock markets and bond yields plummeted simultaneously, with the correlation between the two reaching its highest level in two years. This indicates that the market is preparing for a potential global economic recession
Peter Baum, Chief Financial Officer and Chief Operating Officer of American home goods manufacturing giant Baum Essex, expressed frustration that reciprocal tariffs would cause significant damage to his company. During Trump's first term in 2019, Baum Essex moved its factories from China to the Philippines, Cambodia, Vietnam, and India.
Baum also stated:
<blockquote>
This is the beginning of a global economic recession. After 80 years and five generations of effort, Trump has bankrupted us.
</blockquote>
As the official effective date of the tariffs on April 9 approaches, the market will closely monitor the Vietnamese government's response and further adjustments in the global supply chain. As Citigroup pointed out, April 2 may just be a milestone in &#34;Trade War 2.0,&#34; rather than the end

The Vietnam stock index VN fell sharply by 6.7% on Thursday, marking the largest single-day drop since 2001. Nike's U.S. stock plummeted over 11% in pre-market trading, while shares of other American companies reliant on Vietnam's manufacturing, such as Adidas and Puma, also saw significant declines. Tariffs are expected to have a severe impact on Vietnam's economy; however, in the face of Trump's tariff threats, the Vietnamese government still maintains its economic growth target of at least 8% for this year

- The U.S. announced a 10% baseline tariff on all countries and a 46% tariff on imports from Vietnam, effective April 9, 2025, significantly impacting Vietnam's economy.  
- Following the announcement, global stock markets fell sharply, with Vietnam's VN index dropping 6.7%, the largest single-day decline since 2001, and major U.S. companies reliant on Vietnamese manufacturing, like Nike and Adidas, saw their stock prices plummet.  
- The tariffs may necessitate a reevaluation of global supply chains, posing substantial risks for businesses heavily invested in Vietnam, while Vietnam's government aims to maintain an 8% economic growth target despite these challenges.

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Trump's "tariff big stick" has crashed the Vietnamese stock market! Nike, Adidas, and Puma's stock prices have collectively plummeted