A recent report by S&P has highlighted the potential consequences for several economies in the Asia-Pacific region if the US goes ahead with more trade tariffs, as reported by PTI. The report suggests countries like Vietnam, Taiwan, Thailand, and South Korea are more exposed to US trade policies, meaning that if the US imposes tariffs, these economies could be hit the hardest.
In contrast, India and Japan are considered to be somewhat protected, as their economies are more focused on domestic activities, offering some shield against the tariffs.
US President Donald Trump has already said that he plans to introduce reciprocal tariffs on countries, including India. This follows recent moves by the US administration, which has already put 10% tariffs on imports from China and 25% tariffs on steel and aluminium. However, it’s uncertain whether this is the end of the tariff hikes.
S&P pointed out that the US administration has significant freedom when it comes to imposing trade tariffs on other countries. This leaves a lot of uncertainty hanging over the region, as outcomes could change depending on the negotiations that take place.
Interestingly, some Asia-Pacific nations charge higher tariffs on US products than the US does on theirs. These countries could come under closer scrutiny for "reciprocal tariff action" in the future, according to the report. But the tricky part is that it's unclear how the US will compare these tariffs. The level of detail in these comparisons could greatly influence the results.
S&P’s analysis also considered the weighted average tariff rates in the region on US products, US tariffs on imports from these countries, and the difference between the two. This helps provide an idea of how likely tariff actions could be.
According to the report, India, South Korea, and Thailand may be particularly vulnerable to any retaliation if tariffs are imposed based on these comparisons. The situation remains fluid, and much will depend on how things unfold in future negotiations.
