The capricious trade policies rolled out recently by the United States have created many uncertainties for the global economy, which could cause frozen investments and broader economic slowdown, according to an expert.
U.S. President Donald Trump on April 2 signed an executive order on the so-called "reciprocal tariffs," imposing a 10-percent "minimum baseline tariff" and higher rates on certain trading partners. The order took effect on April 5.
However, on April 9 he announced a 90-day pause on his so-called "reciprocal tariffs" to all countries except China.
Such quick change in U.S. trade policies has left many international investors confusing and nervous.
"We're kind of waiting day to day for whatever news comes from the White House. I mean we go to sleep here in Hanoi and I'm going to wake up to 10 different notifications of policies being reversed, going back and forth, and it's really confusing. And even if 90 days they roll back everything, for the next four years, a lot of people are going to be nervous. And when people are nervous, they just stop moving, and that's where things start to slow down, because orders are canceled, orders are delayed. From there, it leads to layoffs. The Trump administration isn't coming forward and saying 'okay, we want this, this and this'. It's completely unclear what they're asking for and it is creating a lot of uncertainty," said Dan Martin, a Vietnam-based international business consultant of Dezan Shira and Associates.
Martin said he believed that investors in Vietnam are continue adopting a "wait-and-see strategy" following the Trump administration's 90-day tariff freeze.
"He said April 2nd would be the day that he announced the tariff plan. So everyone's just like, 'okay well, I'm just going to wait until April 2nd to see what happens. Is Vietnam going to be targeted? Is Mexico going to be targeted? What is Vietnam going to look like in comparison to Malaysia and Indonesia?' So everyone was just kind of waiting to see. But now we've got more wait-and-see on top of that wait-and-see," said Martin.
Unpredictable US trade policies to lead to uncertainty, economic slowdown: expert
