Market Highlight 13.05.2025

The surprise trade agreement announced yesterday between the United States and China has delivered a rare dose of optimism to the global economy. Just days ago, such an outcome appeared highly unlikely. Yet on Monday, in a move that caught global investors and businesses off guard, Washington and Beijing agreed to a ceasefire that included tariff reductions far greater than anticipated. The U.S committed to lowering its base tariff on most Chinese goods from 145% to 30%, while China pledged to reduce duties on U.S products from 125% to 10% over the next 90 days, with both sides aiming to negotiate a broader trade accord in subsequent rounds. Tariffs on a range of Chinese goods will remain above 30%, including those on steel, aluminum, and automobiles, as well as certain levies imposed during the first term of President Donald Trump and former President Joe Biden

U.S Treasury Secretary Scott Bessent stated that Washington is seeking “a long-term, sustainable trade agreement” with China, adding that “neither side is looking to decouple.” According to one estimate, a 30% tariff regime could slash Chinese exports to the U.S by as much as 36% over the next 12 months. Meanwhile, U.S retailers have warned of potential empty shelves if Chinese goods cannot be sourced in time. The USD Index surged by nearly 1,4% yesterday following the upbeat trade developments, while the S&P 500 stock index rallied over 3%. 

In the domestic market, the USD/VND interbank exchange rate briefly dipped to 25.950 following the announcement of the U.S - China trade deal but rebounded swiftly to 25.970 by the end of the trading session, driven by renewed strength in the U.S dollar. The 26.000 level is expected to remain the primary trading range for the market today.

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