Vietnam ETFs Plunge on Trump Tariffs, China ETFs Hold Up
- The VanEck Vietnam ETF plunged by 10% on Thursday.
- Vietnam’s economy is heavily reliant on exports to the U.S.
- Other Asia-focused ETFs also moved sharply.
The VanEck Vietnam ETF (VNM) plunged nearly 10% on Thursday following President Donald Trump's announcement of sweeping new tariffs on Vietnam.
Under Trump’s proposed plan, imports from Vietnam would face a 46% tariff—a figure the president described as “reciprocal,” arguing that Vietnam charges the U.S. a 90% tariff.
In reality, while Vietnam does impose high tariffs on some U.S. goods, its average tariff rate is far lower than 90%. Trump’s proposed tariff appears to be based not on actual tariff levels but on the size of the goods trade deficit.
In 2024, the U.S. imported $136.6 billion worth of goods from Vietnam while exporting only $13.1 billion, resulting in a trade deficit of $123.5 billion. Trump’s "reciprocal" tariff seems to be derived by dividing that deficit by the total value of imports—a misleading calculation that doesn’t reflect tariff policy.
VNM Wipes Out 2025 Gains
Investors reacted sharply. VNM sank on the news, wiping out its year-to-date gains. As of Thursday’s close, the ETF was roughly flat on the year after previously trading up by 10%.
Vietnam’s economy is heavily reliant on exports to the U.S., with the country shipping around $140 billion worth of goods to America last year—nearly a third of its GDP. That reliance helps explain why VNM was hit much harder than ETFs focused on other Asian economies.
For comparison, the iShares MSCI China ETF (MCHI) was down less than 1% on Thursday, despite an announced 34% increase in tariffs on China.
Combined with earlier tariff hikes, the total U.S. tariff burden on Chinese goods could rise to 54%. Still, MCHI remains up 15% year to date, as investors bet that China’s larger and more diversified economy can absorb the hit better than Vietnam’s.
Other Asia-focused ETFs making moves on Thursday include:
