Trump Strikes Trade Deal With Vietnam, Sending Retail, Apparel Stocks Higher

Major retail and apparel stocks saw a boost during Wednesday morning trade after U.S. President Donald Trump announced the highly anticipated trade deal with Vietnam ahead of the 90-day tariff pause deadline on July 9.

Nike (NKE) shares were up 3%, Roger Federer-backed On (ONON) stock rose 3.3%, and Lululemon (LULU) shares traded 1% higher in morning trade.

Under Armour (UAA) shares were also up 2.3%, and Abercrombie & Fitch (ANF) stock rose 1%.

These companies heavily rely on Vietnam for importing clothing and footwear into the United States. A higher tariff on goods from Vietnam meant higher production costs for these companies.

Trump, on his Truth Social account, said Vietnam will pay the U.S. a 20% tariff on all goods imported into the country, and a 40% tariff on any transshipment.

The President had initially levied a 46% tariff on Vietnam as part of his reciprocal tariffs on global trading partners before the 90-day pause.

Vietnam, on the other hand, will give the U.S. tariff-free access. “… we will be able to sell our product into Vietnam at ZERO Tariff,” Trump said.

The Vietnam trade deal follows a similar agreement entered into with the U.K. and a preliminary deal with China.

Trump’s July 9 deadline would mean the expiration of a 90-day pause on the sweeping tariffs he announced earlier this year, and if no trade deals are finalized by then, the U.S. is set to reimpose or escalate these tariffs.

Trump said the deal between Vietnam and the U.S. was sealed after speaking with To Lam, the General Secretary of the Communist Party of the Southeast Asian country.

The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.3%, while the Invesco QQQ Trust (QQQ) surged 0.6% on Wednesday.

The retail sentiment on the S&P 500 ETF has been ‘bullish’ over the last week, according to Stocktwits data.

Retail users were ‘extremely bullish’ on Nike, while on Lululemon, it was shown to be ‘bearish.’ 

Sentiments around Under Armour, On, and Abercrombie were ‘neutral.’

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