The president’s statement helped boost shares in apparel brands Nike, Lululemon, and American Eagle — all of which have major operations in the country.

In recent years Vietnam has forged strategic and economic links with the United States, its former foe, making the steep tariff rate all the more of a shock.

The tariffs will hack at the root of Vietnam’s export-oriented economic model. In recent years its economy has benefited from manufacturers diversifying away from China, growing by an average of 7% a year over the past decade (excluding the pandemic).