Assistance in Southeast Asia as a Trump Rates Play Field
Southeast Asian countries sighed in relief on Friday after the US announced their export tariffs were much lower than those threatened and leveled the playground with a level of about 19% in the entire largest economy in the region.
The global tariff offensive of US President Donald Trump has shook Southeast Asia, an area that is very dependent on exports and manufacturing and in many areas driven by a shift in supply chains from China.
Thailand, Malaysia and Cambodia joined Indonesia and the Philippines at US 15%, a month after Washington imposed a 20% levy on the Vietnam Regional Manufacturing Power Plant,
Southeast Asia – With a collective economy worth more than $ 3.8 trillion – has been racing to offer safe concessions and offers with the United States, the top export market for most regions.
Countries, many of them are key players in the global supply chain, competing to prevent the prospects of loss of market share with each other and multinational companies shift operations and orders elsewhere.
The Malaysian Ministry of Trade said the tariff, down from 25%threatened, was a positive result without sacrificing what he called the “red line” item.
Thailand’s Minister of Finance said the reduction from 36% to 19% would help the country’s economy who struggled to face global challenges in front.
“This helps maintain Thailand’s competitiveness on the global stage, increase investor confidence and open doors for economic growth, increase revenue and new opportunities,” Pichai Chunhavajira said.
The level of progress in the bilateral trade agreement with the United States is not immediately clear, with Washington so far achieved a broad “framework agreement” with Indonesia and Vietnam, with a scope for further negotiations. Pichai said Thailand was about one third of the road there.
The United States on Friday cut down on Cambodian tariffs to 19% of the previous levies of 36% and 49%, large push for the important clothing sector, the largest economic driving and a source of about one million manufacturing work.
“If the US maintains 49% or 36%, the industry will collapse in my opinion,” Deputy Prime Minister of Cambodia and Top Sun Chanthol’s trading negotiators told Reuters in an interview.
Status quo
In Thailand and Malaysia, business groups support the rate of tariffs that can signify the maintenance of the status quo between the rival market, including beneficiaries of what is called the “Chinese Plus One” trade.
“This is very good – we are equivalent to Indonesia and the Philippines and lower than Vietnam … We are happy,” said Werachai LertluckPreeche from the Semiconductor Microelectronics SMT manufacturer.
Chookat ophaswongse from the Thai rice exporter association said the same level as Vietnam would maintain the US market share, while Wong Siew Hai, President of the Malaysian Semiconductor Industry Association, said the latest tariff would equate competition.
“I don’t see the company doing something special. This will be a business as usual for now, until they know what the next best step,” Wong said.
There is still much that must be done by Trump administration, including non-tariff barriers, origin rules and what is a transcription for the purpose of avoiding tasks, the size targeting goods originating from China without added value or limited value, where the tariff of 40% will apply.
Vietnam has one of the largest trading surplus in the world with the United States, worth more than $ 120 billion years ago, and has often been chosen as the center of rethinking of Chinese goods illegally to America.
It was the first driver in trading talks and reached an agreement in July which cut fees from 46%which was threatened to 20%, but a fixed concern between several businesses that its large dependence on raw materials and components imported from China could lead to broader applications than the 40%level.
“That’s the real problem,” said a businessman in Vietnam, who asked not to be named to allow him to speak more freely.
Andrew Sheng of the University of Hong Kong’s Asia Global Institute said the same tariff means that Southeast Asian countries must feel relieved that the uncertainty of policy has ended at this time.
“The announcement of the tariff looks like a classical trump art agreement – many hypes and threats, and with one developing, the other side feels that he has a reasonable agreement,” he said.
Source: Reuters
