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Which publicly traded companies are likely to benefit from the recently announced trade deal between the United States and Vietnam?
Seeking Alpha analysts Far Horizon and Grassroots weigh in.
Far Horizon: The Vietnam trade deal is definitely a positive for apparel retailers like Nike (NYSE:NKE), Lululemon (NASDAQ:LULU) and Under Armour (UA). For example, half of Nike’s shoes are made in Vietnam. They recently estimated that the tariff impact on costs would be $1 billion annually. As I explained in a recent article, the deal with Vietnam should save them over $300 million of this.
As an economy projected to grow at over 5% annually for the rest of the decade, Vietnam’s industrial expansion offers good opportunity for companies like Caterpillar (CAT), General Electric (GE) and Honeywell (HON) to trade with favorable terms. Vietnam’s large population and agricultural segment are also attractive for agriculture and food companies like Archer Daniel Midland (ADM), John Deere (DE) and Tyson Food (TY).
Finally, investors might also look for opportunities to invest in Vietnam as a beneficiary of improved trade relations and U.S. investment. One simple way to do so is with sector ETFs like VanEcks Vietnam ETF (VNM).
Grassroots: July 2’s U.S.–Vietnam handshake takes Trump’s saber-rattling 46% “reciprocal” tariff and whittles it to a flat 20%, while U.S. exports, from Detroit metal to Midwest pork, walk into Vietnam toll-free. That’s instant oxygen for the brands that already shifted work south of the Chinese border. Nike (NYSE:NKE) and Under Armour (NYSE:UAA) make most of their shoes there, and Levi Strauss (NYSE:LEVI) sources a mid-teens share of its denim line, so the deal removes a looming margin hit.
Apple (NASDAQ:AAPL) breathes easier, too. Vietnam-built AirPods, iPads and Macs now face a survivable 20% duty instead of a crushing 46%, keeping Cupertino’s China-hedge alive.
On the outbound ledger, Boeing (NYSE:BA) scores the marquee prize as Hanoi is poised to turn that long-floating memo into an $8 billion order for 50 737 MAX jets, a headline win for U.S. manufacturing.