Trump 2.0 and ASEAN: Potential tariff exposure – Standard Chartered

Unlike Trump 1.0, ASEAN now faces increasing risk of direct effects of tariffs under Trump 2.0. ASEAN can be exposed to product-specific tariffs, and the impact may be mitigated by universal nature, Standard Chartered's economists Edward Lee and Jonathan Koh report. 

Tariff exposure can be a relative comparison

"Tariffs have been a central theme of President Trump’s election campaign. Since his inauguration, threats have been made but implementation has been delayed, raising expectations for negotiated solutions. Markets remain watchful amid uncertainty over execution and timing. We analysed the impact on GDP growth from the threats of universal tariffs on specific products – pharmaceuticals, lumber, iron and steel, copper, aluminium, semiconductors and automobiles. We found that Singapore, Malaysia and Vietnam will likely be the most negatively impacted should these tariffs go into effect. Tariffs on steel and aluminium have already been implemented, with Vietnam and the Philippines negatively affected; however, the hit to growth is likely to be marginal."

"Compared to Trump 1.0, where US-led tariffs were primarily focused on China, Trump 2.0 tariffs are broader. Under Trump 2.0, ASEAN will still face the indirect effects of US-led tariffs, with another 20% tariff already imposed on China. While there may be benefits from reallocation of production and exports for ASEAN, the region also faces more direct product-specific and reciprocal (details are scant here) tariffs this time around. While the direct effects will be negative, the universal nature of product-specific tariffs may lower the demand elasticity of US imports with respect to tariffs. In addition, we think the region is likely to be of secondary importance on tariff application compared to bigger economies such as China."