Vietnam's economy is expected to face similar effects regardless of whether Donald Trump or Kamala Harris wins the US presidency, though a Trump victory could increase market volatility, analysts said, as reported by VNExpress.

The presidential race, set to take place later today, November 5, remains too close to call, according to recent polls. Michael Kokalari, director of macroeconomic analysis and market research at VinaCapital, said the outcome is unlikely to have a significant impact on Vietnam. Nguyen The Minh, head of research and development at Yuanta Securities, said both candidates are committed to fostering economic growth, but through different approaches.

Harris has proposed measures such as tax incentives for families, raising the minimum wage, expanding affordable housing, promoting small business loans, and incentivising the return of manufacturing jobs to the US.

Trump’s policies, meanwhile, are more aggressive and protectionist, featuring high import tariffs and tax cuts for businesses and individuals. In a note to investors in early September, Kokalari said the Democrats' strategy of subsidising domestic industries is challenged by high manufacturing costs and a limited pool of skilled workers in the US Trump has proposed imposing tariffs of 60% on Chinese imports and 10-20% on imports from other countries, a stark increase from the current average of 2% on non-agricultural imports.

Many economists have criticised this plan, with Kokalari suggesting that Trump might focus on devaluing the dollar to spur manufacturing rather than imposing high tariffs. Analysts said Vietnam could benefit from either scenario. Minh pointed out that higher tariffs on Chinese goods could prompt manufacturers to shift production to other countries, including Vietnam. A weaker dollar, Kokalari explained, would boost Vietnam's exports to other markets, and a 10-20% blanket tariff would not significantly undermine the country's export competitiveness.

Reports from Standard Chartered and other organisations have indicated that higher tariffs specifically targeting Chinese goods could give Vietnam and Mexico an advantage in exporting to the US. However, a Fitch Ratings report in October warned that a second Trump term could hurt Asian economies heavily reliant on US exports, such as China, South Korea, and Vietnam. The report projected that these economies might see a reduction of at least 1% in real GDP growth compared to current forecasts.

Minh said the financial and stock markets would experience more pronounced differences between a Harris and a Trump presidency. Harris’s policies would likely result in less market turbulence compared to Trump's more unpredictable approach. "If we (at Yuanta) are to forecast market volatility in the short term, former President Donald Trump is certainly a name that investors should be cautious about," Minh said. Commenting on the US-China trade conflict, The Washington Post reported that Trump often relied on his instincts rather than advice from his aides.

Analysts are also wary that a return to office for Trump could lead to greater political influence over the Federal Reserve. "If you move the Fed to some sort of political control, that is going to really change the rules of global finance," Maurice Obstfeld, former chief economist of the International Monetary Fund, told CNN. Minh concluded that financial markets could be in for a shock if Trump's policies return, as they would make market dynamics more unpredictable.