Pham Thi Bich Phuong, sales director of SK Foods, which produces products from rice such as rice flour straw, noodles, pasta, and pho, said exports to the U.S. provide steady revenues and also help the company build relationships with global partners and enhance its brands.
It has identified advantages and disadvantages of both presidential candidates’ policies and developed strategies to respond to potential changes in the trade and economic environment, she said.
Rice flour straws are being produced by SK Foods. Photo courtesy of the company |
Many Vietnamese businesses similarly view the U.S. as a key market. Exports to the country topped US$88 billion in the first nine months of 2024, a 25.5% year-on-year increase.
This made it Vietnam’s largest export market, especially for electronics, textiles, footwear, furniture, and agricultural products.
Trade barriers proposed by candidates
According to Phuong, if Harris wins, SK Foods will benefit from the U.S.’s open trade policies and greater support for organic food imports.
But compliance costs would be higher due to having to meet sustainability standards and fiercer competition from suppliers specializing in green goods in the U.S. and elsewhere, she said.
According to Heng Koon How, head of market strategy at Singapore-based bank UOB, Harris is likely to maintain the Joe Biden administration’s approach, which involves applying targeted tariffs for specific industries and is less aggressive than Trump’s.
But under a Trump administration, trade barriers could be numerous, complex and more unpredictable.
Trump has called for tariffs of 60% on Chinese imports, 200% for vehicles from Mexico and a 10% tariff on all foreign goods.
However, Frederic Neumann, chief Asia economist and co-head of Global Research Asia at HSBC, pointed out that Trump’s actions during his previous term were not as extensive as he had promised during the 2016 election campaign.
“I do not think the Harris administration will impose broad tariffs, and even Trump will be selective as inflation is a major issue for the U.S. Besides China, other economies will not be significantly affected.”
But there is a small risk that Vietnam would be viewed as a gateway for Chinese goods to enter the U.S., resulting in tariffs being imposed on Vietnamese imports as well, he noted.
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Cat Lai Port in HCMC’s Thu Duc City in 2021. Photo by Read/Quynh Tran |
Exchange rate pressure
The two presidential candidates have differing views on monetary policy, leading to varying impacts on inflation and related factors that determine how the U.S. Federal Reserve, its central bank, manages interest rates.
Trump seeks more control over monetary policy while Harris supports the independence of the Fed.
The former’s proposal for tariff hikes and cracking down on immigration might increase inflation in the U.S., forcing the Fed to be more cautious about lowering interest rates, which will keep the dollar strong.
“In my view, the Vietnamese economy will not be too affected as it can adapt to exchange rate changes of 10-20%, ” Neumann said. “The inherent strength of the Vietnamese economy is likely sufficient to withstand these fluctuations.”
Despite potential tariffs, non-tariff barriers and exchange rate tensions, analysts and businesses like Phuong’s expect Vietnam’s exports to the U.S. to continue to thrive.
Neumann said: “The competitiveness of the Vietnamese economy stems from fundamental factors and is not solely dependent on whether tariffs are imposed.”
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