The new tariffs under the Donald Trump administration could severely impact Asia-Pacific economies, S&P Global Ratings said on Monday. The ratings agency said that the higher tariffs under Trump’s second tenure could harm the APAC economies, and pointed out South Korea, Thailand, and India as most vulnerable to trade retaliation.
Compiled by S&P Global, the report titled, ‘Asia-Pacific Economies Likely To Be Hit By US Trade Tariffs’, the brokerage said that countries like Vietnam, Thailand, South Korea, and Taiwan have much more economic exposure to the US. Therefore, if more tariffs are imposed from America, these nations will bear the largest economic impact of the decision, reported PTI.
Comparatively, S&P noted that Indian and Japanese economies are more domestically oriented and will provide some relief from tariffs. Notably, Trump recently said that his administration will impose reciprocal tariffs on all trading partners including India. Already, 10 per cent additional tariffs have been imposed on imports from China and all steel and aluminium imports now attract a 25 per cent duty.
S&P noted, “We believe this might not be the end of it. Uncertainty is high because of the high leeway the US administration gives itself in imposing trade tariffs on partner economies, and bilateral negotiations can impact outcomes as well. However, several Asia-Pacific economies are under scrutiny and risks to economic activity loom.”
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The ratings agency also looked at the weighted average tariffs rates in the APAC economies on US products, the tariffs from US on imports from these countries, and the difference between the two. These projections of effective tariffs could help understand the exact tariff imposition on imports. These results showed that India, South Korea, and Thailand might be most vulnerable to trade retaliation based on the analysis, S&P explained.
