us-reciprocal-tariffs-may-hit-asian-trade-growth

Donald Trump’s new tariff policy has introduced a fresh wave of uncertainty across Asia, with many economies potentially facing new US trade levies.

 

His recent announcement of a broader definition of reciprocal tariffs has raised concerns among economists, who believe that the policy could impact multiple countries in the region. 

 

Analysts at Nomura Holdings Inc. have warned that the lack of a clear formula in Trump’s approach makes it difficult to predict which nations might be affected.

The policy considers not just tariffs but also tax structures, regulatory frameworks, and currency policies.

 

This expanded approach means that non-tariff barriers, such as government regulations and market access restrictions, could also be grounds for imposing tariffs. Economists believe this could give the US administration the flexibility to impose trade restrictions on a wide range of Asian economies.

 

Among the countries most at risk are China, India, Indonesia, the Philippines, and Thailand, which have high levels of non-tariff barriers.

 

Even developed economies like Japan and South Korea, despite their free-trade agreements with the US, could face new tariffs due to regulatory policies and product testing standards. The uncertainty surrounding how these factors will be measured has made the situation more complex.

 

Nomura analysts have pointed out that the broad nature of the criteria makes the process unpredictable and increases the likelihood that more emerging and developed Asian economies will be targeted.

 

The lack of transparency in how these tariffs will be imposed adds another layer of risk for businesses operating in the region.

 

For many of these countries, negotiating a bilateral trade agreement with the US might be the only way to avoid tariffs. India, for instance, is already facing pressure to increase its purchases of American goods.

 

The timing of Trump’s announcement, which came just before his meeting with Indian Prime Minister Narendra Modi, suggests that trade negotiations could become a key focus in future diplomatic discussions.