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  •   Home > News > International

    How Donald Trump's 'Liberation Day' tariffs will impact US trading partners in Asia

    Donald Trump's new tariffs are a blow for nations that have powered their economic growth by opening large markets in the US for manufactured goods.


    The United States' trading partners in Asia awoke to the news on Thursday they had been targeted with some of the steepest tariffs unveiled by Donald Trump.

    They face tariffs of up to 49 per cent — a blow for nations that have powered their economic growth by opening large markets in the US for manufactured goods.

    The drastic trade measures, which the Trump administration said heralded "Liberation Day" for the US, reach far beyond the country's trade imbalance with China.

    They will raise tariffs on products from South-East Asian nations — including some of the region's most impoverished — and on the US's major security partners in Asia, including Japan and South Korea.

    Here's how they might affect economies throughout the Asia-Pacific region — and how they're responding.

    China

    Mr Trump singled out China as one of the "nations that treat us badly", when he announced a 34 per cent tariff on imports from the world's second-largest economy.

    Combined with the 20 per cent tariffs he imposed earlier this year, the total new levies will reach 54 per cent — close to the 60 per cent figure Mr Trump threatened on the campaign trail.

    The Trump administration is also closing a duty-free exemption for small parcels from China, in a move likely to disrupt the import of popular low-cost products from online retailers Shein and Temu.

    In announcing the new round of tariffs on Wednesday, the White House accused China, among other major economies, of lowering the cost of their exports and disadvantaging the US in trade, including by suppressing worker wages.

    It remains to be seen whether the latest round of tariffs will trigger another round of tit-for-tat with China.

    China's commerce ministry said Beijing "firmly opposes" the reciprocal tariffs and "will take countermeasures to safeguard its own rights and interests".

    [YouTube Trump speech]

    Experts say the impact of the new tariffs on China will be limited.

    "Trump's tariffs certainly won't help Chinese firms and will cause some real pain in some sectors, but they don't make any definitive mark on the Chinese economy," said William Hurst, Chong Hua professor of Chinese development at the University of Cambridge.

    "US exports are of declining importance to China. The American tariffs will spur more Chinese trade with other places, from Europe to South-East Asia and Africa," he added.

    But Australian National University economics professor Shiro Armstrong said the US trade barriers raise the risk of "contagion".

    "As Chinese goods are locked out of the US market … those Chinese goods and other goods that can't get into the United States are flooding other markets," he said.

    "And there will be a temptation to put up trade barriers, and that means a retaliatory cycle, and the global economy could go into recession."

    Others say new tariffs imposed elsewhere in Asia could cause problems for China.

    "Chinese firms have been rerouting trade through places like Vietnam … to avoid US sanctions, but these markets are now being hit with significant tariffs of their own," said Ruby Osman, China expert at the Tony Blair Institute for Global Change.

    Japan

    Japan, a key US ally in Asia, found itself dropped into the same category as China as the White House revealed its new trade measures.

    Mr Trump has called Japan one of the worst offenders for conducting unfair trade practices against the US.

    The Trump administration says, along with South Korea and Germany, Japan has suppressed its own citizens' spending power to give their exports an edge in US markets.

    And the US has lamented a "variety of non-tariff barriers" it says have blocked US car makers from making inroads in Japan's automotive markets, denying them an additional $US13.5 billion in annual exports to Japan.

    Now, Japan faces a 24 per cent "reciprocal" tariff.

    Japanese Trade Minister Yoji Muto called the tariffs "extremely regrettable" and said Tokyo would urge the US to exempt Japan.

    Its prime minister, Shigeru Ishiba, said "all options" were on the table as Japan considered its response. 

    "Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for [Washington] to apply uniform tariffs to all countries," he said.

    "We need to consider what's best for Japan's national interest."

    South Korea

    Another major partner of the US, South Korea has grown into one of the region's economic powerhouses through its exports, including cars and electronics.

    Mr Trump has slapped imports from the country with tariffs of 26 per cent.

    The White House says South Korea's trade practices stop US car makers from gaining a larger import market share in Korea, and the US trade deficit with the country more than tripled from 2019 to 2024.

    Analysts in Seoul said Mr Trump's extensive rollout of tariffs was harsher than expected.

    "For the domestic economy, a significant blow will be inevitable," said Park Sang-hyun, an economist at iM Securities.

    Similarly to China, South Korea could feel the impact of massive tariffs on Vietnam, where major corporations such as Samsung Electronics and LG Electronics have manufacturing bases.

    South Korea's acting president Han Duck-soo ordered emergency support measures for businesses that will be impacted, including the automobile sector.

    "As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis," he said.

    Mr Han asked the country's industry minister to negotiate with Washington to minimise the impact, an industry ministry statement said.

    Vietnam

    "Vietnam, great negotiators," Mr Trump said as he announced his tariffs on the South-East Asian country in the White House Rose Garden. 

    "Great people. They like me, I like them."

    However, Mr Trump has made Vietnam's leadership "very disappointed" by announcing a 46 per cent import duty on Vietnamese products, says Nguyen Khac Giang, a Vietnam expert at Singapore think tank the ISEAS-Yusof Ishak Institute.

    The US is Vietnam's top export destination, accounting for about 25 per cent of its GDP.

    Popular US brands like Nike, Adidas, Lululemon, Columbia Sportswear, Salomon and Arc'Teryx are all manufactured at least in part there.

    Dr Giang said Vietnam's export-led economy would take a hit from the new tariff — and the damage wouldn't stop at the border.

    "Such a heavy-handed move risks unravelling years of painstaking efforts to rebuild US-Vietnam trust after decades of war.

    "Once shaken, that trust is not easily restored."

    Huong Le Thu, the deputy director of the Crisis Group's Asia Program, said Mr Trump's approach could result in a "lose-lose situation".

    "It risks alienating, if not antagonising, in some cases, countries against the US without any real benefits," she said.

    "In fact, the economists will tell you that tariff will hurt the American consumers, and mostly middle class, the most."

    She added that developing economies that had been hit the hardest were also home to the biggest manufacturers in the world.

    "Not only this will complicate their economic growth plans but it can disrupt the global production and prices."

    In recent years, many Chinese manufacturers — from shoes to furniture and toys — have moved their factories to Vietnam, where they've avoided US-imposed tariffs.

    [YouTube tariffs analysis]

    "The companies that moved production there to avoid tariffs the first time round will be starting to rethink their decision and look for new places that they can manufacture," said Ben Udy, lead economist at Oxford Economics.

    Cambodia

    The US is imposing the highest tariff rate of any Asian country — 49 per cent — on Cambodia.

    "Cambodia! Oh look at Cambodia," Mr Trump said while going through a list of the tariffs.

    "They made a fortune with the United States of America," he said, referring to one of Asia's most impoverished nations.

    The United States is the number one customer for Cambodia's exports by a long way, importing $US12.7 billion worth of goods in 2024 — mainly garments, footwear, travel goods, solar panels, bicycles and agricultural products. 

    Only about $US321.6 million worth went the other way — creating a massive trade deficit for the US.

    "At face value, [the tariff rate is] a shocking and deeply concerning number," said Stephen Higgins, a managing partner at Mekong Strategic Capital.

    "In the short term, garment exports will come to a near halt, as US importers wait to see whether common sense prevails, and run down inventories.

    "This will have a major impact on the Cambodian economy in the coming months.

    "Longer term, Cambodia's position is more uncertain, given other major garment exporters to the US are also hit with big tariffs.

    "So US importers will likely still need to buy from Cambodia, but volumes will likely suffer as manufacturing shifts to India [which has a lower tariff rate]."

    Thailand

    One of the US's largest trade imbalances is with Thailand, and it's imposing a 37 per cent tariff on the major South-East Asian exporter. 

    The US is its largest trading destination, taking more than 16 per cent of its exports, including electronics, machinery and agricultural products. 

    Thailand's government said it had a "strong plan" to handle the new tariffs imposed by Mr Trump, and hoped to negotiate a reduction.

    Prime Minister Paetongtarn Shinawatra said the government would take steps to mitigate the impact of the 36 per cent levies to be imposed on the country's goods.

    Ben Udy, the lead economist at Oxford Economics, said the tariffs would impact workers in affected industries in countries including Thailand, and nearby in Malaysia and Vietnam.

    "One of two things happens. Either the company moves its manufacturing elsewhere, in which case it's likely to be fairly large job losses … or if they continue to base manufacturing [in country], these factories or manufacturing firms may see a hit to demand from the US."

    He said the loss of American demand could also lead to wage stagnation.

    Professor Armstrong said South-East Asian economies were hit hardest in the new round of tariffs, and Australia would need to work with them.

    "Those economies are really trade exposed ...  that's the source of their prosperity but it's also the source of their security."

    Indonesia

    Indonesia also has a trade surplus with the US, although not as large as many other countries in the region.

    Still, the Trump administration is applying a 32 per cent tariff on imports from the emerging South-East Asian economy.

    Andry Satrio Nugroho, a researcher from the Institute of Development of Economic and Finance (INDEF) in Jakarta, said it would impact the economy.

    "Our labour-intensive industry is struggling, we know that the textile and footwear industry has been quite a depressed industry lately," he said.

    Data released by INDEF showed that Indonesia exported billions of dollars worth of textiles in 2024, and the US was also buying its clothing and footwear products.

    "So [with this tariff policy] the industry will be increasingly impacted, and the threat of quite large lay-offs will be increasingly real."

    Mr Nugroho said tariffs could make Indonesia an easy alternative destination for products that may not be able to enter the US.

    "We can see ASEAN countries, Cambodia, Vietnam, Thailand … they may dump goods by pursuing the thinnest possible margin, with the hope that the important thing is that the goods are sold because the largest and closest market is Indonesia."

    Mr Nugroh said the Indonesian government should negotiate with the US, and that Indonesia could also start looking at other countries as export destinations to replace the US.

    "It could be developed countries with large markets such as Europe, or other countries that are given preferential tariffs … with the hope of being able to re-enter the US market with tariffs below 32 per cent," he said.

    Indonesia's Ministry of Finance told broadcaster CNBC Indonesia the government would mitigate the possible negative impacts of the tariffs.

    ABC/wires

    © 2025 ABC Australian Broadcasting Corporation. All rights reserved

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