What 2024 US presidential election means for Vietnam's economy
What 2024 US presidential election means for Vietnam's economy
The outcome of the U.S. presidential election is unlikely to have much effect on Vietnam; however, if Donald Trump wins the vote, the impact on Vietnam's economy may be greater, according to economists.
Kamala Harris (L) and Donald Trump, candidates in the 2024 U.S. presidential election. Photo: Reuters |
Michael Kokalari, director of macroeconomic analysis and market research at VinaCapital, an investment and asset management firm based in Vietnam, said that Vietnam’s export prospects to the U.S. will remain strong regardless of the winner because of geopolitical realities and the similarities between the trade policies of the Democrats and Republicans.
Bui Thi Quynh Nga, a senior macroeconomic analyst at Phu Hung Securities Corporation, stated that if Trump wins the election, the impact on Vietnam’s economy would be greater than if Vice President Harris emerges victorious.
Tran Ngoc Thuy Vy, an analyst at Mirae Asset Securities JSC, shared the view, saying that Trump might create stronger changes.
As a case in point, Vietnam may benefit from the shift of supply chains away from China as the Republicans wish to impose high tariffs on imports from China.
However, Vietnam may encounter risks given Washington's policy to protect domestic goods and stringent trade agreements, Vy noted.
Trump reportedly wants to raise tariffs on imports from China to 60 percent and impose 10-20 percent blanket tariffs on shipments from other countries.
The U.S. is the largest importer of Vietnamese products.
In January-September, Vietnam exported over US$88 billion worth of products stateside, surging nearly 26 percent year on year.
Meanwhile, China remained Vietnam's largest supplier of commodities, with an import turnover of $104.81 billion.
As a result, Vietnam will be put at a disadvantage if the U.S. levies high tariffs on China-originated products turned out in third countries, according to Vy.
If Harris wins the election, U.S. policy is expected to remain largely consistent, as she may choose to continue the Biden administration’s policies.
Vy noted that if Harris decides to have the U.S. rejoin the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, Vietnam, as a member, would likely see a boost in exports.
Meanwhile, Mirae Asset stated that the U.S. presidential election is unlikely to significantly impact Vietnam’s stock market.
The U.S. stock market would face a high risk of a short-term correction, so Mirae Asset predicted the Vietnamese stock market would be hit slightly adjacent.
Regarding the exchange rate, Nga noted concerns about rising inflation if the Republican candidate wins.
Trump has suggested he might exert more control over the Federal Reserve, which traditionally operates independently of the presidency.
If he returns to office, his policies could potentially devalue other currencies, including the Vietnamese dong.
Nevertheless, Nga predicts that the U.S. dollar may weaken in the short term after the election, as the Fed is likely to continue with interest rate cuts.
Kokalari from VinaCapital predicted that if Trump wins, he is likely to focus on weakening the U.S. dollar rather than significantly raising tariffs, despite his frequent statements to the contrary.
The U.S. presidential election is scheduled for Tuesday, November 5.
