US: Looming tariff threats put Asia at risk – UOB Group

As the 2 April 'Liberation Day' approaches, financial markets have turned more jittery with exporters and businesses bracing for potentially hard-hitting import tariffs imposed by US President Trump, UOB Group's economists Suan Teck Kin and Alvin Liew note.  

Market in turmoil ahead of 2 Apr 'Liberation Day'

"Ahead of the 2 Apr 'Liberation Day' tariff announcement by US President Trump, it is highly uncertain how Asian exporters will be affected, as a number of them are likely to be on the 'Dirty 15' list, including Vietnam, Japan, South Korea, India, Thailand, and Malaysia." 

"The upcoming tariff announcements could be a combination of: 1) countryspecific tariff, e.g. the earlier announcement of 25% imposed on all imports from Canada and Mexico; 2) reciprocal tariff i.e. the US would implement tariff rate on imports from others that match tariffs that those countries impose on US products; and 3) product specific, e.g. the 25% duty on all automobile imports into the US that is slated to take effect from 2 April." 

"For Asian countries, particularly ASEAN-5, reciprocal tariff would be relatively easier to manage, since the average rates in those countries hover around 7- 8%. However, product specific tariff rates, especially in the double-digit range, could cause significant impact to these exporters and their supply chain partners. It is too early to assess the potential implications at this point, and we will await 2 April for better clarity."