On Thursday (July 3), US President Trump announced that he had reached a key trade agreement with Vietnam, which attracted widespread attention from the international financial market. Analysts believe that in the context of rising global trade barriers, the policy orientation and negotiation model revealed by the agreement have obvious implications for other emerging markets and the European Union.



According to the agreement, the tariff on goods exported from Vietnam to the United States will be set at 20%, a significant drop from the previous high tariff of 46%; while American products exported to Vietnam will not be affected by any retaliatory tariffs. In addition, the United States will impose tariffs of up to 40% on so-called "transit" goods, targeting goods originating from third countries and simply processed in Vietnam before being exported to the United States. Analysts believe that this combination shows that the United States intends to gain bilateral advantages through the "high tariff-low bargaining chip" strategy and impose institutional strikes on attempts to circumvent tariff rules.

Analysts believe that this policy framework clearly shows that the United States is currently using high tariffs as a pressure tool in bilateral trade negotiations, forcing relevant countries to compromise in a short period of time by setting up a temporary negotiation window. Take Vietnam as an example. It is highly dependent on exports to the United States. Under the current trade tensions, accepting a tariff of up to 20% is a passive concession. Although this tax rate is higher than the market's previous expectation of 10%, it has become a "negotiation sample" for comparison. If other countries intend to strive for better conditions in the future, they must show more active cooperation at the policy level.

Risk exposure and transmission paths of emerging market countries

This agreement has an indirect impact on other emerging markets in Asia, especially the clause that sets the "transshipment tariff" at 40%, which creates potential pressure on countries such as Thailand and Malaysia. These countries have invested in and set up factories in Vietnam in large numbers, and the current export path will face reassessment. Citi analysis believes that this high tax rate will cause a chain reaction of capacity relocation and route reconstruction for third-party processing export countries, affecting foreign trade surplus, manufacturing index and related monetary policy trends.

The situation in South Korea is particularly typical. In recent years, a large number of Korean companies have chosen to set up factories in Vietnam to achieve cost control and export convenience. Now they may have to adjust their export layout to the United States. In addition, from the perspective of macro data, the linkage between regional manufacturing purchasing managers' indexes (PMIs) may be strengthened, and the policy transmission mechanism will also be accelerated, which is worth continued tracking by relevant entities.

For emerging markets, analysts believe that the biggest signal released by the agreement is that if they fail to actively start negotiations, gain political mutual trust and make structural adjustments, they will face the situation of passively accepting trade arrangements or even losing exemption qualifications. Therefore, it is an inevitable strategy to plan industrial chain adjustments and export market diversification in advance.

The EU has limited negotiating space and faces pressure to compromise

Compared with the rapid response of emerging markets, the EU seems to be sluggish in trade negotiations with the United States. Although Vietnam expressed its intention to restart negotiations as early as April, and Indonesia and Malaysia also showed their willingness to coordinate, the EU has been repeatedly criticized by the Trump administration since the beginning of the year, and the negotiation atmosphere is cold. Analysts pointed out that based on the case of Vietnam, if the EU still insists on the "zero tariff" demand, it may be difficult to reach a consensus. It is expected that the EU may eventually accept a tax rate of about 10% as a compromise, and try to obtain market access preferences in key industries such as digital economy, automobiles, and luxury goods in order to achieve a balance in the overall tax burden.

In addition, the EU and the US have serious differences in their positions on issues such as digital taxes and the regulation of multinational technology companies, which makes it difficult for them to complete a free trade agreement with substantive effect in a short period of time. Analysts believe that under the current situation, a political framework agreement is more likely to emerge - temporarily stabilizing bilateral trade relations in a vague and short-term manner. It is worth noting that Trump had previously threatened to impose tariffs of up to 50% on EU goods. Although it has been postponed until next week, it remains unclear whether the EU will retaliate in kind. This poses a policy uncertainty risk to EU exporters and may also interfere with the monetary policy arrangements of major European economies.

Response from a strategic perspective

Although the Vietnam-US agreement is a bilateral arrangement, the signal released by the Trump administration during the 90-day trade buffer period is more representative. Analysts pointed out that the United States will continue to strengthen its trade priority stance, adopt a "high tariff-for-access" strategy, and systematically track and restrict behaviors with "transshipment risks" in the global industrial chain.

From a macro perspective, the pace of the current bilateral trade agreement is accelerating, and countries have to make policy choices within a limited time. Analysts believe that in this context, we should pay close attention to the dynamics of emerging market countries' contacts with the United States, especially India, Mexico and other economies that may become the next negotiating partners. If there is still resistance in their domestic politics, such as unresolved agricultural access issues, the progress of the agreement may be delayed, but market expectations will still be reflected in advance.

For the EU, analysts believe that it is necessary to strengthen internal coordination mechanisms to cope with the linkage effects brought about by trade uncertainties, and formulate response plans in key industrial sectors. Overall, the global trade pattern may usher in a window for reshaping in the coming months, and trade arrangements will become more fragmented and politicized.