Liquidity crisis fear dominates the markets as bonds sell off

• In today’s CEO Daily: Diane Brady on how the tariffs are punishing Vietnam.
• The big story: Trump’s trade war has triggered fear of a liquidity crisis and people are calling for the Fed to step in. 
• The markets: Everything is down, badly. Except China!
• Analyst notes from Apollo on the basis trade in Treasuries, JPMorgan on recession, Stocklytics on X’s declining ad reach.
• Plus: All the news and watercooler chat from Fortune.

Good morning. I wasn’t the only one who was shocked to see Vietnam tagged as one of President Trump’s worst offenders, slapped with a 46% tariff. I remember when I first went to Vietnam as a young reporter for a U.S. newspaper, I was struck by its beauty and the excitement people felt about opening up their battered economy to foreign investment. There were plenty of Americans roaming around to help them do it, inspired by potential profits—and perhaps a sense of obligation from the pain that country endured during the Vietnam War.

Few countries will suffer more from the tariffs than Vietnam and those who do business with it. Trade counselor Peter Navarro dismissed Vietnam’s offer to remove all tariffs on U.S. products, saying it’s the “non-tariff cheating that matters.” The country’s proximity to China, physically and psychologically, was a boon for brands like Gap, Lululemon and Nike, who wanted to derisk their supply chains in a cost-effective matter. Now, of course, those stocks are among the most hard hit.

I recall the excitement back in 2023 when Vietnamese electric car maker VinFast debuted on the Nasdaq with a $23 billion valuation. It was building a manufacturing plant in North Carolina and hoped to compete with Tesla on product and price. Around that time, the then-CEO Le Thi Thu Thuy told me that the real test would be with consumers.

Consumers have not been won over just yet: the company has racked up almost $10 billion in losses. Its stock is now trading at roughly half its IPO price. But interestingly, there have been notable changes in Vietnam as a result of the growth of companies like VinFast. They’ve helped Vietnam’s economy boom, which has led to the creation of minimum wage laws and higher living standards there. Those factors have, in turn, helped the population in Vietnam become bigger consumers of U.S. products. 

If the relationship between the U.S. and Vietnam unwinds, it’s hard to see how either side emerges a winner.

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Contact CEO Daily via Diane Brady at diane.brady@fortune.com

This story was originally featured on Fortune.com