What to look out for ahead of US’ decision on Vietnam’s market-economy status

[HO CHI MINH CITY] The United States is set to make a decision on Friday (Aug 2) on whether to recognise Vietnam as a market economy – a status that means lower US tariff rates on the South-east Asian country’s goods and an elevation of its attractiveness as a growing export powerhouse.

Allianz Research’s analysis of the six criteria used in the assessment point to the outcome likely being in Vietnam’s favour, though geopolitical considerations may go beyond economic rationale and affect the final decision.

The Munich-based research centre wrote in a Jul 25 note: “Vietnam’s rising dependence on imports from China and the risk of tougher trade policy following the US elections could still hold back Vietnam’s long-term progress.”