Southeast Asia has been among the hardest hit regions by Donald Trump’s tariff rout across the globe, which has dealt a heavy blow to the region’s export-reliant economies.
Washington on 2 April said it will slap levies of 46% on Vietnamese exports. Thailand will be hit by 36% duties and Indonesia 32%, as part of what Donald Trump’s “reciprocal” tariffs that were determined by a calculation of levies and non-tariff barriers imposed on American exports.
Cambodia is also at the receiving end of the highest reciprocal levy at 49%, Laos at 48%, and Myanmar at 44%.
A main motivation for the Trump administration targeting the region’s countries is to crack down on what the US says is trans-shipment and trade rerouting by Chinese manufacturers to evade US tariffs.
“It puts at risk a lot of the advantages the South-east Asian countries, particularly Vietnam, have gained,” said Ms Trinh Nguyen, a senior economist covering emerging Asia at Natixis.
“As a result, it will impact not just the region’s exports but also investment (in the region),” she adds.
Trump may consider lowering tariffs if other nations remove their trade barriers on US exports. Some analysts say the maximalist approach represents a watermark from which rates could be negotiated down.
Thailand’s Prime Minister Paetongtarn Shinawatra says that there is scope for negotiations to bring tariffs down to a more reasonable level, and that the government would devise short-term measures to deal with the impact on manufacturers and exporters.
Moreover, Malaysia’s Investment, Trade and Industry Ministry says it is not considering retaliatory tariffs, as it is “actively engaging with the US authorities to seek solutions that will uphold the spirit of free and fair trade”.
While that is not yet on the agenda, Vietnam will send a delegation of top business executives to New York later in April, led by Deputy Prime Minister Ho Duc Phoc.
Source: The Straits Times
