President Trump announced a trade deal with Vietnam on 2nd July, as reported here by The New York Times, just a week before the tariff deadline. The deal removes the threat of 45% tariffs but still imposes tariffs of 20% on imports
VNM And Nike: Vietnam Trade Deal Good, But Not Great, News
Summary
- The Vietnam trade deal removes major tariff threats, providing clarity for U.S. companies like Nike, Inc., but the positive impact is already priced in.
- Nike's tariff-related cost reduction is meaningful, but with forward valuations peaking, I rate the stock a Hold for now.
- Vietnam's economy benefits from the deal, but the VanEck Vietnam ETF's limited manufacturing exposure means the news isn't a strong buy catalyst.
- Both NKE and VNM are best rated as Holds; the trade deal is positive, but not enough to warrant new buying at current valuations.
The author has an honours degree in economics and politics with a focus on economic development. With 36 years of experience in executive management he has extensive knowledge of insurance/reinsurance, Global and Asia Pacific markets, climate change and ESG. He invests in his personal capacity.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
The author is not an investment advisor and offers no advice here. He shares his analysis solely for the interest of readers.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.