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My Take | Is the US tariff reprieve a false dawn for small Asian nations?
Trump’s tariff pause offers Asian nations a glimmer of hope, but uncertainty looms, as trade talks could squeeze low-income economies further
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Asian investors heaved a sigh of relief as US President Donald Trump paused most “reciprocal” trade tariffs early on Thursday morning, raising hope among several countries – pushed to the brink of their economic wits – of cutting a better deal with the United States.
Small Asian economies, from Bangladesh to Vietnam, faced significant challenges when Trump announced sweeping trade tariffs last week. However, it is still too early to celebrate, as the American president has only granted a 90-day reprieve, leaving exports to the US market under a cloud of uncertainty.
Initially, Washington announced a broad range of tariffs last week – with rates as high as 49 per cent for Cambodia and 46 per cent for Vietnam, and 17 per cent for the Philippines and 10 per cent for Singapore – potentially leading to a shake-up of the Asia-Pacific supply chain.
The implication is that countries with lower tariffs may attract industries from neighbouring nations. However, a crucial question remains: how secure will they be if their neighbour’s house is on fire?
Reports indicate that Vietnam and Thailand have started negotiations with US officials, and Indian representatives also appear hopeful for a deal. Yet, a significant concern is that these countries may individually possess less leverage in negotiating with Trump’s hardline business approach.
Trump’s “reciprocal” tariffs align with his election campaign slogan of “Make America Great Again”, and fundamentally differ from a typical win-win negotiation strategy.
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