Asia number one target of Trump's tariff letters

New Straits Times

11 hours ago

TOKYO: Donald Trump sent letters to 14 countries, mainly in Asia, informing them that higher import tariffs will come into effect on August 1 unless they reach a deal with the United States.
It is the second time the US president has set a deadline after he postponed tariffs on almost all countries in April for 90 days.
Countries that have large trade imbalances with the United States have been key targets, including Japan (US$68.5 billion surplus in 2024), South Korea (US$66 billion), Thailand (US$45.6 billion) and Indonesia (US$17.9 billion).
Here is a summary of what Trump's letters mean for these countries:
South Korea, already burdened by sector-specific levies on steel and automobiles, is facing a 25 per cent tariff hike on its remaining exports to the United States, but is cautiously optimistic of brokering a deal.
Washington "expressed agreement" and "hoped the two sides could reach an agreement before then (August 1) through close communication", South Korea's national security adviser Wi Sung-lac said after meeting US Secretary of State Marco Rubio on Monday.
South Korea, one of the world's biggest shipbuilders, agreed to "coordinate closely" with Washington on the industry to achieve "tangible and mutually beneficial outcomes", he said.
A close US ally and the largest source of foreign investment in the country, Japan also has to deal with a 25 per cent levy on its key auto industry.
It is now facing similar tolls on other goods, up from 24 per cent announced in April, but better than the "30 per cent, 35 per cent or whatever the number is that we determine" threatened by the president last week.
Japan's Prime Minister Shigeru Ishiba said at a cabinet meeting Monday that the tariff set out in the letter was "genuinely regrettable", according to local media reports.
The reason for not making a deal, he said, was "the Japanese government has avoided making easy compromises, firmly demanding what should be demanded, protecting what should be protected, and has conducted rigorous negotiations."
Trump has criticised Japan for not opening its market to American rice and vehicles enough.
Rice imports is a taboo topic for the Japanese government, which claims to defend local farmers' interests and has taken a hardline approach to talks ahead of an upper house parliamentary election on July 20.
Jakarta, facing 32 per cent tariffs, plans to increase its agricultural and energy imports from the United States to finalise an agreement, Economy Minister Airlangga Hartarto recently told AFP.
Indonesia had already announced Monday it had signed an agreement to import at least one million tons of American wheat annually for the next five years, worth US$1.25 billion.
Trump announced 49 percent tariffs on Cambodia in April, representing one of the highest in his blitz. Monday's letter to the country that hosts many Chinese owned factories, reduces this rate to 36 per cent.
Prime Minister Hun Manet assured the White House of Phnom Penh's "good faith" in negotiating, with reduced tariffs on 19 categories of American products.
Myanmar and Laos, which both face 40 per cent tolls, rely heavily on Chinese investments, while their supply chains are closely intertwined with Asia's largest economy.
Washington has repeatedly highlighted the risk of Chinese products passing through other Southeast Asian countries to avoid US tariffs targeting China, a concern mentioned in Trump's letters.
Thailand was told it faces 36 per cent levies in its letter. Bangkok is offering more access to its market for American agricultural and industrial products, increasing its energy purchases, and boosting orders for Boeing airplanes.
Acting prime minister Phumtham Wechayachai told reporters Tuesday he wanted a "better deal", adding that "the most important thing is that we maintain good relations with the US."
Bangkok's latest proposal aims to grow bilateral trade volumes and reduce its US trade surplus by 70 per cent within five years, achieving balance in seven to eight years, Finance Minister Pichai Chunhavajira recently told Bloomberg News.
Thai Airways could commit to purchasing up to 80 Boeing planes in the coming years, according to Bloomberg.
Malaysia faces a 25 per cent tariff and the trade ministry said Tuesday it will continue negotiations to reach a "a balanced, mutually beneficial, and comprehensive trade agreement."
The world's second-largest textile manufacturer is looking at a 35 per cent tariff on its goods but was hoping to sign an agreement by early July.
Textile and garment production accounts for about 80 per cent of the country's exports, and US firms that source products from there include Fruit of the Loom, Levi Strauss and VF Corp – whose brands include Vans, Timberland and The North Face.
Dhaka has proposed to buy Boeing planes and boost imports of US wheat, cotton and oil.
"We have finalised the terms," Commerce Ministry Secretary Mahbubur Rahman told AFP, adding that negotiators were set to meet Tuesday to finalise their work.
Kazakhstan (25 per cent), South Africa (30 per cent), Tunisia (25 per cent), Serbia (35 per cent), and Bosnia (30 per cent) are among the other recipients of the letters made public by Trump on Monday.