Trump imposes 46% tariffs on Vietnam: Why did the stock market plummet while cryptocurrencies on digital exchanges only fluctuate slightly?

The high retaliatory tariffs imposed by the US government on Vietnam have negatively impacted Vietnam’s domestic stock market, with investors feeling pessimistic about the upcoming economic outlook.

Trump Imposes 46% Tariff Increase on Vietnam: Why Did the Stock Market Crash While Cryptocurrencies Only Slightly Fluctuated?

On April 2, 2025 (U.S. time), President Donald Trump unexpectedly announced a 46% retaliatory tariff on imported goods from Vietnam, an unprecedented rate. The news immediately caused turbulence in financial markets: Vietnam’s stock index plummeted 6.68%, marking the largest decline in the index’s 25-year history; at the same time, the U.S. stock market experienced its worst trading day since the COVID-19 pandemic crash in March 2020.

Why did these two asset classes react differently? What measures can Vietnam take to reverse this situation?

The VN Index chart shows a sharp decline, erasing gains from the past six months.

Market Sentiment and Crowd Expectations

The plunge in Vietnam’s stock market reflects investor panic over trade war risks. With tariffs significantly increased, Vietnam’s exports to the U.S.—its largest consumer market—will face difficulties, directly impacting corporate revenues and the overall economy.

Why Did Vietnam’s Stock Market Crash?

1. Export companies are directly affected.

Key sectors such as textiles, electronics, timber, and seafood—those that export heavily to the U.S.—will suffer severe impacts from the new tariffs. Fearing profit declines and loss of market share, investors are selling stocks.

2. The Vietnamese economy faces slowdown risks.

Declining exports mean slower GDP growth. Reduced production may lead to rising unemployment, negatively affecting consumption and the domestic market. When markets sharply decline, foreign investment funds may withdraw seeking safer havens. This could lead to the devaluation of the Vietnamese dong, further pressuring the economy.

3. Expectations of tax avoidance measures by the Vietnamese government.

Recently, China and the European Union have also faced pressure from President Trump’s tariff policies. Even seemingly close allies like Canada and Mexico have not escaped the White House’s pressure. A significant portion of the Vietnamese community prematurely celebrated, believing they could avoid tariffs. Many articles and videos reflect this herd mentality, with expectations that 2025 will be better. However, last Wednesday, all hopes were dashed.

Why Did Cryptocurrencies Not Drop as Much as Stocks?

Comparison of Bitcoin price volatility (orange), gold prices (red), and the S&P 500 index. Data source: TradingView (April 4, 2025)

Despite the record decline in the Vietnam Index (VN-Index), the cryptocurrency market also experienced a correction, but the drop was far less severe than stocks. Bitcoin only fell to about $82,000 before rebounding sharply, unlike the stock market’s crash.

The main reason lies in the fundamental differences between these two asset classes. The differences in their responses can be explained as follows:

Asset Characteristics

Stocks represent ownership in specific companies, directly reflecting the performance and prospects of businesses affected by tariffs. In contrast, cryptocurrencies like Bitcoin are viewed as global assets, with no direct link to any particular country’s economic performance.

Investor Sentiment

During periods of economic uncertainty, some investors tend to shift toward assets considered “safe havens,” such as gold or Bitcoin, despite the high volatility of cryptocurrencies.

Policy Expectations

Investors may anticipate that governments will take measures to support the economy and stock markets, whereas the cryptocurrency market operates more independently of traditional economic policies.

Can Vietnam Turn the Tide?

In the past, Vietnam has repeatedly used strong diplomatic measures to influence U.S. policies, especially during Trump’s presidency. During Trump’s campaign, many Vietnamese businesses and officials actively engaged with his trusted advisors to enhance Vietnam’s image as an important strategic partner for the U.S. in Asia.

Now, against the backdrop of a 46% tariff, there are three main policy response expectations:

1. Vietnam will intensify lobbying efforts in the U.S.

History shows Vietnam has succeeded in influencing Trump’s policies. For example, in 2019, the U.S. accused Vietnam of currency manipulation and threatened high tariffs. Vietnam quickly held meetings with U.S. officials, explained the situation, and promised to increase purchases of American goods, from Boeing aircraft to agricultural products. As a result, tensions eased somewhat.

2. Adjust domestic economic policies to adapt to changes.

If lobbying fails or only achieves minor concessions, Vietnam will need to adjust its economic strategies to mitigate the impact of tariffs. Possible measures include:

Supply Chain Adjustments: Companies can increase production in regions unaffected by tariffs or seek ways to reposition products to reduce dependence on the U.S. market.

Strengthening Trade Relations with Other Countries: Vietnam can focus on free trade agreements like CPTPP and EVFTA to expand export markets outside the U.S.

Top 10 Vietnamese Exports to the U.S. in 2024

3. The U.S. may leverage tariffs as bargaining chips to demand concessions.

Known for its tough negotiation tactics, Trump often used tariffs as tools to pressure other countries into making concessions across various areas. Vietnam might face pressure on issues such as:

Purchasing More U.S. Goods: If Vietnam commits to importing more U.S. products, especially agricultural and energy goods, it could ease tariff tensions.

Currency Policy: The U.S. might demand Vietnam change its exchange rate policies to avoid accusations of currency manipulation.

Military Partnerships: Amid tense China-U.S. relations, Washington may seek a clearer stance from Vietnam on regional security issues.

Conclusion: Stay Calm but Act Quickly.

Although Vietnam’s economic index (VN-Index) experienced a historic decline, there are multiple ways for Vietnam to reverse the situation. In the past, the Vietnamese government has demonstrated flexibility and responsiveness in adjusting policies to counter U.S. trade decisions.

The most critical factor now is closely monitoring policy developments. If Vietnam can respond swiftly and appropriately, investor confidence may recover faster than expected. **$ILV **$CVC **$RVN **