President Donald Trump’s recent tariff impositions have significantly impacted the Asia-Pacific region, with varying effects across different nations. Vietnam faces one of the highest tariffs at 46%, reflecting its substantial trade surplus with the U.S. Similarly, Cambodia, Sri Lanka, and Bangladesh are subjected to tariffs of 49%, 44%, and 37% respectively, primarily targeting their exports of lower-value-added products like textiles and garments.
In contrast, major economies such as India, Japan, and South Korea encounter relatively lower tariffs ranging from 24% to 26%. These countries benefit from exemptions in key sectors; for instance, India’s pharmaceutical exports and South Korea’s semiconductor shipments are not subjected to these tariffs. Australia and Singapore experience the baseline tariff of 10%, attributed to their smaller trade deficits with the U.S.
For decades, the US has been the primary source of global demand (& issuer of reserve assets) running large external deficits. This proved politically unsustainable. Biden tried to reverse it via large subsidies. Trump via tariffs. Their objective is the same: reindustrialize US. pic.twitter.com/dFLZzi25f4
— Daniel Kral (@DanielKral1) April 3, 2025
The economic ramifications are particularly pronounced for Vietnam and Thailand. Vietnam’s total exposure to U.S. imports is approximately 12% of its GDP, and with a 46% tariff rate, around 5.5% of its GDP is at risk. Thailand, facing a 36% tariff, has about 9% of its GDP linked to U.S. imports, placing roughly 3% of its GDP in jeopardy. These figures consider both direct exports to the U.S. and indirect contributions through global supply chains.
The broader implications of these tariffs suggest potential downturns in economic growth and upward pressures on inflation across the region. Such conditions may prompt central banks to consider monetary policy easing to mitigate adverse effects. Additionally, there could be depreciation pressures on regional currencies as markets adjust to the new trade dynamics.
While certain sectors have secured exemptions, the overall landscape indicates a challenging period ahead for many Asia-Pacific economies as they navigate the complexities introduced by these U.S. tariffs.
https://twitter.com/NikkeiAsia/status/1907589194874007812