What Prediction Markets Are Forecasting

Prediction markets currently give about a 1 in 4 chance that the United States will finalize a new free trade agreement with Vietnam before 2027. This means traders collectively see it as unlikely, but not impossible. For context, markets see deals with the United Kingdom or Taiwan as even less probable, with odds below 10%. The focus on Vietnam suggests it is the most plausible candidate for a new deal in a potential second Trump term, though still a long shot.

Why the Market Sees It This Way

The modest 25% probability rests on a few factors. First, the U.S. and Vietnam elevated their relationship to a "Comprehensive Strategic Partnership" in 2023. This diplomatic upgrade created a framework for deeper economic ties. Second, Vietnam is a major alternative manufacturing hub for companies diversifying supply chains away from China, a goal shared by many U.S. policymakers. A trade deal could lock in those shifts.

However, significant barriers exist. The last major U.S. trade pact was signed over 15 years ago. Recent administrations have focused more on tariffs and targeted agreements rather than sweeping new deals. Any agreement would face a contentious ratification process in the U.S. Senate, where trade is often a divisive issue. Traders are weighing these historical and political hurdles against the clear strategic interest.

Key Dates and Events to Watch

The main event is the U.S. presidential election on November 5, 2024. A Trump victory would be the essential first step for this prediction, as the question hinges on his administration. If he wins, watch for early 2025 signals. Key indicators would be an official announcement to launch trade negotiations or a meeting between the U.S. Trade Representative and Vietnamese officials. Without clear momentum by mid-2025, the likelihood would drop sharply, as finalizing a complex deal typically takes years.

How Reliable Are These Predictions?

Prediction markets have a mixed record on long-term political outcomes like specific legislation. They are generally better at forecasting near-term elections than the passage of complex policies, which can stall for unexpected reasons. For trade deals, their accuracy is hard to gauge because such events are rare. The odds here mainly reflect the collective judgment of informed participants about political will and procedural timelines. The low trading volume for this specific question also suggests less consensus and higher uncertainty compared to major election markets.