United States tariffs have levelled the playing field across most of Southeast Asia, with major economies receiving similar import duty rates after months of intense negotiations.
However, while the region collectively breathed a sigh of relief at the outcome, some nations face much steeper rates and analysts warn that a general sense of uncertainty will likely persist.
The US announced on July 31 that most of the Association of Southeast Asian Nations (ASEAN) members would face a tariff of either 19 or 20 per cent on their exports, a significant reduction from initially threatened rates.
These new tariffs took effect on August 1, bringing a collective sigh of relief, according to Reuters.
Similar tariffs, different negotiations
The final tariff rates show a remarkable degree of parity among ASEAN’s largest economies, even though each country’s negotiation strategy was different.
Malaysia, Thailand and Indonesia all secured a 19 per cent tariff, as did Cambodia and the Philippines.
Vietnam, a major manufacturing hub, received a slightly higher rate of 20 per cent.
Brunei Darussalam faces a 25 per cent rate, while Laos and Myanmar bear the heaviest burden, with a steep 40 per cent import duty.
Singapore secured the lowest rate in the region at 10 per cent, its pre-existing tariff.
According to The Jakarta Post, Indonesia was one of the countries that offered “generous concessions” to the US, agreeing to purchase 50 Boeing aircraft and $19.5 billion in agricultural and energy goods.
Malaysia also eased non-tariff barriers and purchased 30 Boeing jets to secure its 19 per cent rate.
Thailand made concessions, agreeing to eliminate import duties for over 10,000 US items and promising to cut its $35 billion bilateral trade surplus with the US in half within five years, according to a report by the Bangkok Post.
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Winners, losers in a shifting landscape
While most major ASEAN economies received similar tariff rates, not all nations fared equally well.
Laos and Myanmar, with their 40 per cent import duties, are considered the biggest losers in this policy shake-up.
Wen Chong Cheah from the Economist Intelligence Unit (EIU) told The Jakarta Post that Laos and Myanmar were “losers under a US policy that is shaking up global supply chains.”
Conversely, Singapore’s low 10 per cent rate puts it in a “sweet spot” according to Maybank senior economist Chua Hak Bin in an interview with The Business Times International.
However, Cheah of the EIU noted that Singapore’s key exports, pharmaceuticals and semiconductors, are not the main exports of other ASEAN countries, which limits its ability to leverage the lower tariff for a competitive advantage.
Uncertainty remains
Despite the outcome, analysts caution that this is likely not the end of the story.
Rahul Bajoria, an economist at BofA Securities, noted that the new rates are still “much higher than what the status quo was.”
Furthermore, the Trump administration has signalled that further agreements and revised duties may be forthcoming.
A major concern for many countries is the 40 per cent tariff on transshipped goods, a measure aimed at preventing the re-routing of Chinese products to evade duties.
As noted by Reuters, Vietnam, which has a significant trade surplus with the US and relies heavily on Chinese materials, could be particularly vulnerable to this policy.
The Business Times International also reports that this tariff now applies to countries beyond Vietnam, adding to the uncertainty.
As former US trade negotiator Stephen Olson said, “Don’t assume this is the end of the story. Trump regards this as an ongoing reality show.”
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Hazel Camba 
Shameeka Voyiya 
Newsjustnews writers