Week 14_Impact of the reciprocal tariffs proposed by the U.S. on April 2, 2025

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Title	Week 14_Impact of the reciprocal tariffs proposed by the U.S. on April 2, 2025
Report Type	Báo cáo tuần
Source	BSC
Bussiness	HOSTC
Detail	Date : 08/04/2025 Total pages : 0 Language : English File Type : .PDF FileSize : 2091 Kb Download: 0 Download
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Short Content	GLOBAL STOCK MARKETS Financial Markets Plunge Following Tariff Shock from President Trump Global financial markets tumbled into turmoil after President Trump announced a sweeping tariff plan. The U.S. stock market dropped an average of 3.5%, with the majority of the decline occurring during the April 3 session. Multinational consumer goods producers such as Nike and import-focused retailers like Five Below and Gap led the sell-off, posting losses between 7–12%. The shockwave extended across European and Asian markets. Meanwhile, the U.S. Dollar Index (DXY) weakened, and U.S. Treasury yields fell below 4%—the lowest since October 2024. - U.S. stock indices declined an average of -3.5%, EU600 dropped -4.2%, Nikkei 225 plunged -8.7%, and CSI 300 lost -1.8%. - The commodity index declined by 1.1%, with broad-based declines across categories: energy (crude oil -6.4%, coal -2.6%), precious metals (gold was flat while silver dropped -8.1%), industrial metals (iron ore -5.2%; lead, aluminum, and nickel all fell by over 4%), and agricultural products (rubber -7.2%, cotton -5%, while cocoa surged +15.6%). - The DXY index fell -1.5%, while the U.S. 10-year Treasury yield dropped -0.3%. The U.S.’s newly proposed tariff policy became the focal point of the market this past week. President Trump announced reciprocal tariffs: a 10% import tax effective from April 5, and elevated tariffs targeting countries with trade surpluses with the U.S. starting April 9. The methodology used to determine tariff levels has sparked controversy, as it relies on a simplified formula—dividing the bilateral trade deficit by the total import value from that country—then adjusting based on the import price elasticity and the pass-through rate of tariffs to final goods. This implies that the U.S. is focusing solely on goods trade, disregarding services trade. The policy allows the U.S. flexibility to pursue bilateral deals, while placing pressure on counterpart nations to reduce tariffs and increase purchases of U.S. goods. Key data to watch in the upcoming week include: EU retail sales; interest rate decision and monetary policy minutes from the Reserve Bank of New Zealand; China’s CPI and new loan data; UK GDP; and the U.S. CPI, PPI, jobless claims, and FOMC meeting minutes. VIETNAM STOCK MARKET VN-Index Plunges Sharply Following Tariff Shock The VN-Index dropped sharply by 8%, with dip-buying activities during the two-day sell-off at the end of the week boosting trading liquidity by 57% compared to the previous week. The market was rattled by negative news on tariffs, aggressive foreign selling, and panic-driven sentiment, resulting in a steep decline and a wave of limit-down stocks during the April 3 session. However, bottom-fishing at low price levels, along with the respite offered by the upcoming national holiday, is expected to help stabilize the market in the near term. - 89% of HoSE-listed stocks declined, with VIC and GEX being rare large-cap gainers amid widespread losses across all stock groups. The sell-off was indiscriminate, affecting nearly all sectors and individual stocks. - All 18 sectors posted losses, with chemicals, retail, and media falling over 10%; meanwhile, auto parts and real estate declined by less than 5%. Notably, despite the downturn, dip-buying was active, though sectors such as media, information technology, and healthcare saw lower liquidity. - Foreign investors intensified net selling, with outflows reaching USD 340 million, up significantly from USD 82 million the previous week. The U.S. announced a 46% reciprocal tariff on imports from Vietnam. According to U.S. Customs data, Vietnam’s export value to the U.S. was USD 141 billion in 2024, with USD 138 billion subject to tariffs after deducting exempted goods. Sectors most affected include electrical equipment, machinery and mechanical appliances, furniture, and apparel and footwear, due to their large export volumes. The announced tariff rate represents a ceiling, and bilateral negotiations remain possible; however, the high tariff level and the surprising calculation method exceeded market expectations (refer to the U.S. Reciprocal Tariff Policy Toward Vietnam report).Deputy Prime Minister’s visit to the U.S. from April 6–14 is expected to open a dialogue channel between the two countries, following the Vietnamese Minister of Industry and Trade’s formal request to the U.S. for a postponement of the tariff decision. The new tariff policy poses elevated risks to Vietnam’s economy and stock market. As trade negotiations will take time, investors are reminded to prioritize risk management, reduce margin exposure, and remain cautious during the market's search for a new bottom.