BENGALURU (April 3): Vietnam's dong hit an all-time low on Thursday, and its stocks were set for their worst session in more than four years, as the country faces one of the heftiest reciprocal tariffs under US President Donald Trump's sweeping new levies.

Vietnam's benchmark stock index fell 6.7% and was on course for its biggest one-day drop since January 2021. The dong touched a record low of 25,814 per dollar.

Trump announced a new baseline 10% US tariff on all imports on Wednesday, with far higher levies on some trading partners, particularly in Asia.

Besides Chinese imports, which will be hit with a 34% tariff on top of the 20% Trump had previously imposed, Vietnam faces 46% levies, Thailand 36%, South Korea 25% and India 26%.

"Many of China's trade diversion routes to access the US market — Vietnam, Cambodia, Laos, Thailand, Indonesia — have been penalised, and we think this may be meant to add further 'maximalist pressure' against China that potentially could cause a lot of damage in the region," Citi analysts said.

"If these tariffs hold, we expect significant negative hit to growth that would further add to a monetary easing bias and forex depreciation pressures."

China's yuan touched a seven-week low and stocks fell 0.2%.

The Thai baht was last trading at a one-month low of 34.27 per dollar and its stock market, the worst regional performer this year, slipped 1.1%.

"While there is openness to negotiation, it remains to be seen what measures Asian countries can take to significantly lower the tariffs they face," said Chris Kushlis, chief emerging markets macro strategist at T Rowe Price.

"Measures such as counter tariffs and currency depreciation could trigger an additional tariff response from the US, resulting in further complication for regional policymakers," he said.

Vietnam's government, which has already made multiple concessions to avoid tariffs, said it would set up a task force, with other Southeast Asian nations planning to seek talks with Washington.

Other regional currencies and stock markets also weakened as risk aversion prevailed after Trump's new levies aggravated fears of a sharp global economic slowdown.

Shares in Malaysia and the Philippines fell 0.4% and 1.6%, respectively.

South Korean shares trimmed early losses to close down 0.7%, as investors hoped for lower tariffs after the government vowed to negotiate with the Trump administration.

The Indian rupee pared losses and last traded marginally lower, while stocks fell 0.3%.

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