Market Highlight 10.04.2025

U.S President Donald Trump announced a surprise reversal late Tuesday, suspending the implementation of reciprocal tariffs on nearly 100 countries - just hours after they had taken effect - sending global equity markets sharply higher. At the same time, however, the administration imposed an immediate 125% tariff increase on imports from China, escalating the trade confrontation between the world’s two largest economies. Speaking Tuesday evening, President Trump stated that the baseline 10% tariff on nearly all imports into the U.S would remain in place, but that the retaliatory tariffs targeting countries with large trade surpluses - excluding China - would be paused for 90 days. The White House cited mounting concerns over potential economic volatility as a key reason for the decision. The move opens a new window for negotiations, giving U.S trading partners a limited timeframe to strike revised trade agreements aimed at reducing tariff levels. President Trump indicated that new agreements would require more than just tariff reductions. Trading partners, he said, should also dismantle non-tariff barriers to U.S goods, commit to increased purchases of American products, and potentially outline investment plans for U.S manufacturing. However, the policy uncertainty surrounding tariffs is likely to prolong volatility across financial markets during the 90-day negotiating period.

The USD rebounded more than 1% against the Japanese yen - currently seen as a safe-haven asset - following the tariff suspension announcement, even as trade tensions with China escalated further. Domestically, the USD/VND interbank exchange rate surged sharply early Tuesday but cooled by the end of the trading day, closing at 25.985 amid optimism over ongoing Vietnam - U.S tariff negotiations. The interbank rate is forecast to ease toward the 25.900 level today, as market sentiment temporarily stabilizes in response to the U.S administration’s latest policy shift.

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