Although the US-China trade tension impacted negatively investors' sentiment during the end of 2018, postive signals about the US-China agreement have partly helped boost Vietnam’s market confidence, according to Viet Dragon Securities Corporation (VDSC) in its latest report.

As of present, the benchmark VN-Index has increased 7.27% since the end of last year. At the close on February 19, the gauge climbed 3.05 points or 0.32% to 964.35. 

US President Donald Trump has recently mentioned a possible extension of 60 days for the US-China negotiation. 

According to VDSC, this is an affirmation that the US president is serious about finding a deal and does not want to impose further tariffs. When the US and China reached a truce agreement to temporarily suspend 25% of tariffs on US$200 billion of Chinese goods, it was expected that the-3-month-agreement was a very short time to resolve the US-China trade conflict. 

In particular, the US not only demands to reduce the trade deficit with China but they also want China’s concession on many issues such as ceasing providing subsidies to state-owned companies and eliminating some policies linked to technology transfer.

In addition, the US-Korea negotiation took more than nine months to come to an agreement since the first meeting, while the US-Mexico-Canada negotiations took more than a year. Therefore, it is really challenging for the world two largest economies to reach a deal within three months as original plan or even five months.

The current situation shows that the negotiating advantage is more on the side of US. The Chinese economy has been slowing down and the trade war with the US is one of the reason. In addition, many orders have shifted to Southeast Asian countries, including Vietnam, even some suppliers have planned to move factories to the region.

On the other hand, although the US president has started the re-election campaign last few weeks, he is facing a lot of troubles. Many states are preparing documents to sue President Trump for declaring National Emergency to build border wall. In addition, Trump’s image has not been positive since he took the White House, stated the report. 

​Therefore, the report expected that both China and the US could reach an agreement. However, it is supposed that a comprehensive agreement that resolve all US-China demands is really hard to close, but a soft agreement, which reduce the US-China trade deficit, is possible.

Hanoitimes