President Donald Trump announced a new trade deal with Vietnam, which will significantly lower tariffs on goods imported to the U.S. from the country. Tariffs are set to decrease to 20% from the previously announced 46%.
This reduction in import duties is a positive development for apparel and footwear retailers with substantial manufacturing operations in Vietnam. The lower tariff rate directly reduces the cost of goods imported into the U.S.
On Holding AG, which manufactures most of its sneakers in Vietnam, is expected to benefit from this trade agreement. The reduced tariff burden will help improve the company's cost structure and profitability, mitigating a significant financial headwind.
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