Advertising
Advertising
twitter
youtube
facebook
instagram
linkedin
Advertising

US to Announce Reciprocal and Sectoral Tariffs on 2 April, Impacting Asian Economies

  • US President Donald Trump has pledged to announce reciprocal tariffs as well as tariffs on specific goods on 2 April. 
  • Vietnam, India, China, Taiwan and Thailand would likely be more vulnerable to potential reciprocal tariffs. Singapore, Malaysia and Korea, followed by Vietnam, Taiwan and Thailand are exposed to sector-specific tariffs. 
US to Announce Reciprocal and Sectoral Tariffs on 2 April, Impacting Asian Economies
freepik.com | US to Announce Reciprocal and Sectoral Tariffs on 2 April, Impacting Asian Economies
Aa
Share
facebook
twitter
linkedin

Table of contents

  1. US said to announce reciprocal & sectoral tariffs on 2 April 
    1. Major uncertainty but largely negative for EM Asia exporters 
      • Ripple effects have already started to arise as some Asian economies have raised tariffs on certain Chinese goods. Some economies have shown their relative openness to make concessions as the Trump administration has laid down prospects for negotiations on reciprocal tariffs, though large uncertainties remain.   

       

      US said to announce reciprocal & sectoral tariffs on 2 April 

      Since US President Donald Trump’s inauguration on 20 January, he has levied or threatened to levy tariffs against various US trading partners and on different products. Tariffs on Chinese goods have been hiked twice by a total of 20% to an average of 33% currently. A 25% tariff on US imports of steel and aluminium has been in place since 12 March. 

      The next key date to watch for further tariff hikes will be 2 April, when Trump has pledged to announce reciprocal tariffs as well as tariffs on specific goods, eg, at least 25% on automobiles, semiconductors, pharmaceuticals and agricultural products.

       

      Major uncertainty but largely negative for EM Asia exporters 

      Regarding US reciprocal tariff hikes, we expect potentially higher risks for Vietnam, India, China, Taiwan and Thailand among the Asian economies. In our view, country specific tariff differentials against the US and bilateral trade imbalance could weigh the most in US reciprocal tariff decisions. We see differentiated growth impacts considering the importance of exports to the US for those economies, with Vietnam and Taiwan likely being more impacted by US levies than India. 

      Meanwhile, we think that Singapore, Malaysia and Korea, followed by Vietnam, Taiwan and Thailand, could be relatively affected more by Trump’s sectoral tariffs. For example, Korea and Thailand would be more vulnerable to US tariffs on automobiles, while Malaysia, Taiwan and Vietnam would be more impacted by tariffs on semiconductors. On the pharmaceuticals side, Singapore and India are more exposed, compared to others. 

      Advertising

      Beyond the direct hits as a result of the US reciprocal and sectoral tariffs and their threats, there would be consequences of second-order tariffs. More specifically, China could face increasing trade hurdles from other countries in addition to the US. For instance, Trump’s tariffs on aluminium and steel imports have already prompted levies from some of China’s trading partners on related items. On the other hand, some economies have shown their relative openness to make concessions as the Trump administration has laid down prospects for negotiations on reciprocal tariffs. Some US officials also hinted reciprocal tariffs could be more targeted than the market has expected.  

       



      us to announce reciprocal and sectoral tariffs on 2 april impacting asian economies grafika numer 1us to announce reciprocal and sectoral tariffs on 2 april impacting asian economies grafika numer 1


      David Forrester

      David Forrester

      Senior FX Strategist at Crédit Agricole Corporate and Investment Bank.


      Topics

      Advertising
      Advertising