Vietnam cuts its tariffs to keep the U.S. on its side

Summary

Marketplace Morning Report: Vietnam Cuts Its Tariffs to Keep the U.S. on Its Side

Release Date: April 1, 2025

The latest episode of the Marketplace Morning Report delves into significant geopolitical and economic developments shaping global trade, market trends, and grassroots business operations. Hosted by Stuart Clarkson in place of Liana Byrne, the episode provides a comprehensive overview of critical issues, enriched with insightful interviews and on-the-ground reporting. Below is a detailed summary of the key segments covered in this episode.

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1. Ukraine-US Minerals Deal Stalemate

The episode opens with an examination of the ongoing negotiations between Ukraine and the United States concerning a critical minerals deal. This agreement, first proposed by Ukrainian President Volodymyr Zelenskyy, aims to trade Ukraine's natural resources in exchange for American security guarantees. However, the deal remains unsigned due to heightened demands from the U.S. side.

Key Points:

• Zelenskyy's Proposal: Initially pitched as a mutual exchange of natural resources for security support.
• Trump's Opposition: Former President Donald Trump cautions that President Zelenskyy may face significant challenges if he attempts to retract from the agreement. "President Zelensky will face big problems if he tries to withdraw from the agreement," Trump warns from Kyiv [00:37].
• Leaked Draft Proposals: The BBC obtained a leaked version of the latest U.S. draft, revealing stricter conditions. These include:
  • Mandatory inspections of Ukraine’s government books.
  • Priority for U.S. investments, especially those conflicting with EU competition laws.
• Outcome: Given the stringent requirements, the agreement is poised to remain unsigned for the time being. "This rare earths agreement looks likely to remain unsigned," states James Waterhouse from Kyiv [00:37 - 01:25].

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2. Vietnam Reduces Tariffs to Strengthen U.S. Relations

In a strategic move to bolster its economic ties with the United States, Vietnam has announced a significant reduction in import duties across various sectors, including automobiles, liquefied gas, and select agricultural products. This decision comes amid the backdrop of a sizeable U.S. trade deficit, the third highest for Vietnam, and aims to sustain the country’s dependence on American markets.

Key Points:

• Trade Deficit Context: The U.S.-Vietnam trade relationship has been characterized by a growing deficit, heavily influenced by Vietnam’s reliance on manufacturing exports to the U.S.
• Impact of U.S.-China Trade War: Vietnam benefited from the shifting manufacturing base due to tariffs imposed on Chinese goods during Trump's presidency. "China was very much the target and Vietnam, as a result, benefited hugely from it," explains Marie Koi [01:50].
• Strategic Tariff Cuts: By lowering tariffs, Vietnam seeks to:
  • Attract more U.S. investments.
  • Allow initiatives like Elon Musk's SpaceX to launch its Starlink satellite Internet service in a pilot program extending to 2030 [02:34].
• Economic Implications: These tariff adjustments are expected to mitigate the trade deficit and strengthen economic collaboration between Vietnam and the U.S.

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3. Market Updates: Global Financial Trends

Stuart Clarkson transitions to a brief overview of the financial markets, highlighting recent movements and significant corporate developments.

Key Points:

• Market Performance: Asian and European markets witnessed modest gains following recent downturns, influenced by uncertainties surrounding impending tariff announcements [02:34].
• Gold Prices: Gold reached new record highs, signaling investor caution amid market volatility.
• Tech Investment: Japan’s SoftBank Group announced a $40 billion investment in OpenAI, valuing the ChatGPT owner at an impressive $300 billion [02:34].

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4. Tricks of the Trade: Navigating Covent Garden's Flower Market

The episode features an immersive segment on London's Covent Garden, the UK's largest flower market, showcasing the challenges and strategies of flower traders in a post-Brexit landscape.

Key Points:

• Early Morning Operations: Liana Byrne arrives at Covent Garden to observe the bustling activities of flower vendors. "This place has it all," she remarks upon entering [03:23].
• Trader Insights:
  • Luke Gilbert of Green and Bloom: Emphasizes the need for agility in pricing and sourcing flowers, often facing last-minute price fluctuations. "If it goes too high, people just won't buy it," Gilbert explains [03:57].
• Brexit Challenges: New biosecurity checks and increased paperwork have complicated the import process, causing delays and additional costs. "Brexit has been the biggest pain," says Paul Fairhead of Evergreen Exterior Services [05:19].
• Economic Impact: The UK government anticipates that border charges could cost British firms hundreds of millions annually [04:38].
• Adaptation Strategies:
  • Time Management: Traders like Paul Fairhead advise building extra time into schedules to account for potential delays at borders.
  • Innovative Solutions: Florists employ creative methods, such as painting hydrangeas to adjust colors when seasonal blooms are unavailable. "We've got to paint them a little bit to get the color right for the event," Ball explains [06:57].
• Sustaining Business: Despite hurdles, market vendors remain hopeful and resilient, continuing to find ways to thrive amidst regulatory complexities [07:04].

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5. Closing Remarks and Future Outlook

The episode concludes with Stuart Clarkson hinting at upcoming segments, including further exploration of London's major markets catering to food enthusiasts. Additionally, listeners are encouraged to tune into related podcasts like Financially Inclined for trusted financial advice.

Key Points:

• Upcoming Features: "Tomorrow Liana will bring you more tricks of the trade, this time from one of London's biggest markets, which is a popular destination for foodies," Clarkson announces [07:26].
• Additional Resources: The episode promotes the Financially Inclined podcast, emphasizing its role in combating financial misinformation [07:47].

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Notable Quotes:

• "President Zelensky will face big problems if he tries to withdraw from the agreement," — Donald Trump on the Ukraine-US minerals deal [00:37].
• "China was very much the target and Vietnam, as a result, benefited hugely from it," — Marie Koi on Vietnam’s advantage amid the US-China trade war [01:50].
• "Brexit has been the biggest pain," — Paul Fairhead on the impact of Brexit on Covent Garden trades [05:19].
• "We've got to paint them a little bit to get the color right for the event," — Susie Ball on adapting flower colors for seasonal demands [06:57].

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This episode of the Marketplace Morning Report provides listeners with a nuanced understanding of current international trade dynamics, market fluctuations, and the entrepreneurial spirit prevailing in local markets. From high-stakes geopolitical negotiations to the meticulous operations of flower merchants, the report paints a vivid picture of the interconnected global economy and the resilience of businesses navigating its complexities.

Transcript

[Stuart Clarkson]

Undiscussed demands and things previously rejected why the latest draft of the Ukraine US Minerals deal remains unsigned Live from the UK this is the Marketplace Morning report from the BBC World Service. I'm Stuart Clarkson in for Liana Byrne today. Good morning. Ukraine says talks with the US Are ongoing over the latest draft of a deal on access to mineral deposits which would hand significant control to America. The BBC has seen a leaked draft of the proposals. Donald Trump has warned that President Zelensky will face big problems if he tries to withdraw from the agreement from KYIV. Here's the BBC's James Waterhouse.

[James Waterhouse]

It was President Zelenskyy who first pitched trading Ukraine's natural resources for American security guarantees. But Donald Trump has so far resisted, insisting the mere presence of US Companies would put Russia off from breaking a future ceasefire. Nevertheless, Kyiv was willing to sign an agreement until now, it seems. Volodymyr Zelenskyy claims America's latest draft proposal is includes demands that have either been undiscussed or previously rejected. In a leaked copy seen by the BBC, it seems the White House has toughened its stance further with demands that Kyiv would have to open its government books for inspection and that the US Would get first refusal on all future investments that would be in breach of the European Union's strict competition laws. This rare earths agreement looks likely to remain unsigned.

[Stuart Clarkson]

James Waterhouse there in Ukraine now, as countries around the world wait for confirmation of US Trade tariffs, Vietnam has cut import duties on a range of goods, including cars, liquefied gas and some agricultural products. Washington's trade deficit with Vietnam is the third highest of any country. But Vietnam is heavily reliant on manufactured exports and the US was its biggest market last year. Here's the BBC's Marie Koi.

[Marie Koi]

During the first trade war of Mr. Trump's presidency, China was very much the target and Vietnam, as a result, benefited hugely from it. So basically a lot of companies shifting manufacturing from China to Vietnam so that they can avoid tariffs that Chinese products were facing. And that's how the US Deficit with Vietnam has increased so significantly over the last couple of years. And as a result, it could actually be in a very much a cross line of Mr. Trump. And it's not just about cutting their tariffs. They also said last week that it could allow Elon Musk's SpaceX to launch its Starlink satellite Internet service as part of a pilot program that will last until the end of 2030.

[Stuart Clarkson]

Marik Oi, reporting for Marketplace. Let's do the numbers now. And Asian and European markets saw Small gains on Tuesday after recent losses because of uncertainty over expected tariff announcements. Gold values, though, hit another record high. And Japan's SoftBank Group has agreed $40 billion of funding for OpenAI. The deal values the ChatGPT owner at $300 billion. Now here on Marketplace, we've been visiting actual marketplaces as part of our ongoing Tricks of the Trade series. It looks at what learn from face to face markets In a world where so much commerce is moved online, Liana Byrne got up at the crack of dawn to visit London's new Covent garden. It's the UK's largest flower market where $70 million worth of flowers are sold each year.

[Liana Byrne]

I've just come in from the parking lot and I'm greeted by bright lights and rows upon rows of blooms. Italian rhinonculus, Dutch tulips, eucalyptus and English ivy. This place has it all. First stop, the stall run by Luke Gilbert of Green and Bloom. By now, he's been awake since midnight waiting for deliveries from across Europe.

[Luke Gilbert]

You never get used to it, though. It doesn't really get any easier.

[Liana Byrne]

Yeah, especially in the winter, I'm sure.

[Luke Gilbert]

Yeah.

[Liana Byrne]

What are we smelling right now?

[Luke Gilbert]

It's got stocks freezers, pretty strong smelling.

[Liana Byrne]

His trick of the trade, buy fast and stay nimble. Sometimes he doesn't know the exact price he'll pay until the auction in Holland happens just hours before.

[Luke Gilbert]

If it goes too high, people just won't buy it. So you can roughly say how much it's going to be. But every now and again we do get some shocks.

[Liana Byrne]

But Brexit red tape can be the biggest shock of them all. After multiple postponements, new biosecurity checks on imports from the eu, which covers items like plants, seeds, meat and dairy, started to come into Force in January 2024. Further phases are rolling out, too. The UK government forecasts border charges could cost British firms hundreds of millions a year.

[Luke Gilbert]

Yeah, it has affected things like that. It's also affected some of the delivery times because there's a lot more paperwork that they have to go through, checks that they have to go through. Prices and time has been affected.

[Liana Byrne]

A bit further inside, we find Paul Fairhead from Evergreen Exterior Services, whose family has been trading in Covent garden for 140 years. He's hunched over the counter surveying his bulbs and pots.

[Paul Fairhead]

The bulk of our trade is what we call the window box trade. So you see window boxes outside offices, pubs and stuff like that.

[Liana Byrne]

In London this morning, he's juggling orders and big deliveries from trucks, sometimes called lorries, that often take an unexpected detour.

[Paul Fairhead]

Brexit has been the biggest pain. The government have bought this new check in down at Servington. They're taking lorries in at 3 o'clock in the morning, pulling them over, but their staff aren't starting work till 8 o'clock in the morning, so the lorry has been held for five hours. We shut at 10 o'clock in the morning. We've lost a day's sales.

[Liana Byrne]

Paul's tip buyers should build in extra time. Even one glitch at the border means no fresh plants on the big day.

[Paul Fairhead]

And the biggest problem is some of that stuff that's coming in is sold and the customers are coming in at 4 or 5 o'clock in the morning and the stuff hasn't arrived.

[Liana Byrne]

And if you're picking up those window boxes yourself, don't be surprised if the price seems steep. Say If I did 30 window boxes, 30 pound each, how much would I be selling them on?

[Paul Fairhead]

And they've got to be at least doubling their money. Everyone's entitled to earn a living, aren't they? They've got staff, cost to pay. One of my customers who comes in here, his parking bill last year for his vans in London was over 35,000 pounds.

[Liana Byrne]

It's not all doom and gloom, though. I met Natalie Keller, a florist with a stall in Barnes in southwest London, eyeing a big bucket of colorful tulips to add some color to her bunches.

[Paul Fairhead]

I'm normally back to the stall for about 9:00.

[Stuart Clarkson]

We prepare and condition all the flowers and then get it out on display.

[Paul Fairhead]

Display for everyone to see and hopefully buy.

[Liana Byrne]

And here's a trick I picked up today. If the flowers aren't the right hue, you can always paint them. That's exactly what wedding florist Susie Ball from Peckham Rye will be doing to her hydrangeas later.

[Paul Fairhead]

Because they're not quite in season, we've had to. We've got to paint them a little bit to get the color right for the event. We worked on it all day yesterday as well.

[Liana Byrne]

Long nights, early mornings and a constant race against o'clock. Traders here rely on a delicate supply chain that's become more complex since Brexit. It might be dark out, but the blooms are bright. And so is the hope that somehow they'll keep finding a way to grow their business despite all the hurdles. I'm the BBC's Liana Byrne for Marketplace.

[Stuart Clarkson]

And tomorrow Liana will bring you more tricks of the trade, this time from one of London's biggest markets, which is a popular destination for foodies. Thank you for listening today. Our producer was Neil Morrow. Our editor is Naomi Rainey. In the uk, I'm Stuart Clarkson with the Marketplace Morning Report from the BBC World Service.

[Marie Koi]

If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal finance. Financially Inclined from Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of. I'm the host, Janeli Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can afford, and how to talk about money with friends and family. Listen to Financially Inclined wherever you get your podcasts.