Opportunities for buying the dip in stocks

Commenting on the White House’s April 2 announcement of retaliatory tariffs, Kokalari noted that trade negotiation experts generally view the proposed 46% tariff as merely an opening bid in the Trump administration’s negotiating strategy. Negotiations between the U.S. and Vietnam are expected to take place in the coming weeks to address this issue.

However, even among experts, there is no consensus yet on the final tariff level Vietnam might face. Given that Trump has started with a very high number, it’s difficult to imagine the final figure dropping below 25% — a rate that would significantly impact Vietnam’s GDP growth this year.

Market Reaction to Tariff News

Investors and major U.S. corporations did not anticipate tariffs on Vietnamese exports to rise significantly above 10%. As a result, they did not rush to front-load imports from Vietnam before the announcement. Instead, they increased imports from China and automobiles from the EU.

On the stock market, the VN-Index dropped nearly 7% on April 3, with broad-based selling across sectors, indicating that investors still need more time and information to assess the true impact of this policy on the economy and on listed companies’ profit growth. For example, FPT — a software outsourcing service provider — saw its stock plunge 7% (limit down), despite the fact that Trump's tariffs have no direct effect on its products.

In the forex market, the initial response of the USD/VND exchange rate was relatively mild, with the dong depreciating less than 1% following the news — and less than 2% year-to-date. Drawing from the first Trump administration and similar cases (e.g., Mexico), currencies of countries subject to tariffs often depreciate by about half the size of the imposed tariff.

In reality, the modest volatility in the USD/VND exchange rate reflects a lack of clarity — including the possibility of “carve-outs” for specific Vietnamese export products, according to experts.

Impact on Investment Strategy

“We are currently reassessing the impact of these tariffs across different investment scenarios and looking for short-term buying opportunities as stock prices decline, in light of the potential long-term implications for both Vietnam’s and the global economy,” said Michael Kokalari. He added that the sell-off presents a chance for active fund managers to buy fundamentally strong stocks that are less exposed to the tariff policy, and are now trading at more attractive valuations.

According to Kokalari, the companies most likely to benefit are those that receive support from government initiatives designed to counter the tariffs' impact on GDP growth.

In February, the Vietnamese government announced plans to increase public investment spending — which was already ambitious this year — and the recent U.S. tariff announcement will likely reinforce its commitment to domestic stimulus efforts.