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Independent Singapore
03-07-2025
- Business
- Independent Singapore
Trump softens stance on Vietnam, announces new trade deal days before tariff hike
WASHINGTON/HANOI: In an astonishing declaration a few days before an extensive fresh round of tariffs was scheduled to come into force, President Donald Trump divulged a trade arrangement with Vietnam that enforces a pointedly lower tariff than what was announced earlier. Trump eases off on Vietnam, announces new trade framework According to the latest Reuters report, instead of the 46% levy imposed in April, Vietnamese exports to the U.S. will now be facing a 20% tariff. In the meantime, goods diverted through Vietnam from third countries, specifically China, will be slapped with a 40% transshipment charge. 'It is my great honour to announce that I have just made a Trade Deal with the Socialist Republic of Vietnam,' Trump wrote on Truth Social after a call with Vietnamese President To Lam. In response, Vietnam consented to give U.S. exporters privileged access to its market, possibly including zero tariffs on some products and enhanced access for 'made-in-America' big-engine automobiles. While Trump viewed the arrangement as a major win, specifics such as which products will be impacted or how transshipment guidelines will be imposed remain unclear. Nonetheless, the statement aided in the 'cooling' of economic strains with Vietnam. See also Wealth of US billionaires soars during pandemic U.S.-Vietnam economic ties deepen amid global trade shifts Vietnam's quick rise as a U.S. trading ally originated from previous Trump-era tariffs on Chinese imports, which prompted countless producers to move production to Southeast Asia. Since 2018, Vietnam's exports to the U.S. have increased more than two and a half times, from under $50 billion to $137 billion in 2024. On the other hand, U.S. exports to Vietnam have grown more modestly, by just 30%, over the same period. The Vietnamese régime hailed the contract as a move toward more robust ties. Hanoi repeated its plea to the U.S. to formally identify Vietnam as a market economy and to loosen restrictions on high-tech exports, old priorities for Vietnam's administration. Global trade realignments as July 9 tariff cliff approaches Trump's move to reduce the tariff for Vietnam comes just ahead of a July 9 target, when he is projected to increase duties on most imports. More than a dozen countries are now scurrying to negotiate analogous agreements with the U.S. to evade high tariffs. See also The Global Economy's Fundamental Weakness The Vietnam arrangement reflects a current transaction made with the UK, which acknowledged a 10% tariff on many products in return for privileged access to sell aircraft, locomotives and beef in the U.S. Discussions with India and Japan are in progress, but have yet to produce significant results. Forecasters say Trump's Vietnam agreement, like others, is just like a prescribed trade agreement but hasn't settled key implementation questions. Nevertheless, it will help keep strategic bonds with Hanoi as the U.S. seeks to stabilise economic interests and regional security alliances in the face of growing Chinese influence. 'Had Trump stuck with 46%, Vietnam feared being outcompeted by other Southeast Asian nations,' said Murray Hiebert of the Centre for Strategic and International Studies. 'That could have damaged both trade ties and military cooperation with the U.S.'
Reuters
05-06-2025
- Business
- Reuters
Bumper Brazilian corn crop could spoil US exporters' fun: Braun
NAPERVILLE, Illinois, June 5 (Reuters) - If anything can wreck the party for U.S. corn exporters, it's Brazil. The U.S. Department of Agriculture has sky-high goals for U.S. corn exports in both the current and upcoming marketing years, but the overall potential may be confined by Brazil's current harvest success. As of May 29, U.S. corn exporters had sold 99% of USDA's full-year export outlook for 2024-25, which ends August 31. That is the fullest coverage by this point in a decade, and the figure would generally indicate that the current export target is too low. But by how much? U.S. corn has recently been able to maintain competitive pricing versus Brazil, and 2024-25 U.S. export sales over the last several weeks have been safely above average. However, Brazil just began harvesting its heavily exported second corn crop, and some production estimates have risen notably over the last week or so. Ever since Brazil's second corn output – and exports – exploded in 2011-12, U.S. exporters' ability to make corn sales in the final quarter of the marketing year has been somewhat limited whenever Brazil's crop is strong. Conab's May estimates showed Brazil's 2024-25 second-corn harvest up 11% from last year. Similar past years might imply that the next three months could feature an additional couple million metric tons of U.S. corn sales for 2024-25. USDA pegs 2024-25 U.S. exports at 66 million tons, second to the 69.8 million shipped in 2020-21 when China was a major player. The platform for 2024-25's success started building in the prior year, which boasted a record U.S. corn harvest. But the urge to compare this year with last year should come with extra caveats. Not only was corn cheap and plentiful a year ago, but Brazil's second crop shrank 12% on the year, facilitating above-average sales at the tail end of the 2023-24 U.S. season. Some analysts have surmised that tariff fears caused U.S. corn customers to stock up early on purchases, which cannot be confirmed or denied but could be another possible short-term limitation on U.S. corn sales. USDA's aspirations for U.S. corn exports in 2025-26 are even bigger than in 2024-25, but the feasibility is unclear given that the big 2024-25 Brazilian crop will be hogging global business through the next several months. As of May 29, U.S. exporters had sold just over 3 million tons of corn for export in 2025-26, slightly more than in the last two years but nothing special. Like old-crop sales, new-crop U.S. corn sales are also limited just prior to the start of the marketing year whenever Brazil's second-corn output is solidly up on the year. This can be extended to the other corn exporters, too. Combined 2024-25 corn output in Brazil, Argentina and Ukraine is set to rise 2% on the year, which could keep a lid on 2025-26 U.S. corn sales over the next three months. Apart from Brazil, U.S. exporters' potential success in 2025-26 depends on what happens at home. Although things are not perfect, the 2025-26 U.S. corn crop is off to a promising start with mostly benign weather expected for the first half of June. Over the last two decades, U.S. corn exports have almost never disappointed from initial expectations whenever production meets or exceeds the initial expectations. This offers a chance for U.S. exporters to retain control of their destiny despite ample Brazilian offerings if they can get cooperation from one very finicky source: Mother Nature. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
