GROWING COMPLEXITY OF TRADING WITH US
In many instances, these new reciprocal tariffs are stacked on top of an array of existing tariffs. China is particularly badly hit by this approach, as firms will need to include any existing Section 301 tariffs from the first Trump term (often up to 25 per cent), another 20 per cent imposed earlier this year under Trump 2.0, before adding the latest 34 per cent reciprocal tariff.
The US has begun collecting 25 per cent tariffs on all products of steel and aluminium or made with these metals. For these categories of goods, reciprocal tariffs do not apply, which highlights the growing complexity to managing trade with the US.
These are not the only tariffs on the horizon either.
From Apr 3, imported vehicles into the US had to fork over an additional 25 per cent tariff. The same rate will be levied against auto parts shortly. Both are covered by a probe alleging national security concerns. Mr Trump has already promised similar treatment of copper, lumber, critical minerals, pharmaceuticals and semiconductors.
The Trump administration promised shock and awe. It has certainly delivered both, along with considerable uncertainty. Asia will need to quickly figure out how to best take advantage of rapid changes in the economic landscape and minimise the damage ahead.
Deborah Elms is Head of Trade Policy at Hinrich Foundation and Founder of the Asian Trade Centre.
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