By Ying Xian Wong
Stocks in Indonesia and Vietnam tumbled on Tuesday, signaling investor concern about how the two countries--among the hardest hit by the U.S.'s reciprocal tariffs--will deal with rising trade tensions.
In Indonesia, the benchmark Jakarta SE Composite Index finished 7.9% lower, posting its biggest one-day drop since 2011. That capped off a rough day back from a long holiday as traders reacted to the 32% reciprocal tariff the U.S. set on Indonesian goods last week.
Banking stocks were among the top decliners, with Bank Central Asia losing 8.5% and Bank Rakyat Indonesia falling 10%. Among large-cap names, tech giant GoTo Gojek lost 14.5%, conglomerate Astra fell 6.7% while Unilever Indonesia was also off by 6.7%.
In Vietnam, the benchmark VN index shed 6.4%, taking losses to about 14% over the past week as the market reopened after a holiday Monday. Notable decliners included conglomerate Vingroup, which fell 5.5%, while Commercial Bank for Foreign Trade of Vietnam and Commercial Bank for Investment & Development of Vietnam lost around 7% each.
President Trump's announced tariffs on Vietnam and Indonesia were much harsher than expected, raising concern about how the economies can manage the impact.
The respective governments of Indonesia and Vietnam have both signaled that they will try to strike trade deals with the U.S.
Indonesia is preparing strategic measures and intensifying diplomatic efforts, including sending a high-level delegation to Washington to negotiate directly with U.S. officials on tariff matters, said Susiwijono Moegiarso, secretary of Indonesia's Coordinating Ministry for Economic Affairs.
Vietnam's prime minister, Pham Minh Chinh, has suggested that the U.S. delay the imposition of reciprocal tariffs for at least 45 days to make room for bilateral talks. Hanoi is ready to negotiate with Washington to reach a bilateral agreement that benefits the two countries, and continues to increase imports from the U.S., according the government's news portal.
Natixis CIB economists think the U.S. is likely to extend negotiation windows, allowing more time to coordinate with multiple countries.
But even if Southeast Asian countries manage to reach agreements with the U.S., there is no guarantee that Washington won't make further demands, Alicia Garcia Herrero and Jianwei Xu said in a note.
Even if tariffs are delayed, global tensions seem unlikely to ease soon, they said. "The Pandora's box has already been opened, and it won't be easy to close it again."
Write to Ying Xian Wong at ying.xianwong@wsj.com
(END) Dow Jones Newswires
April 08, 2025 06:12 ET (10:12 GMT)
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