Trump's new tariffs shake Asian economies still reeling from trade war

On Thursday, Trump announced another round of tariffs, which would go into effect on Oct 1, applying import duties ranging from 25 percent to 100 percent on pharmaceuticals, heavy trucks, etc

By Daisuke Wakabayashi, Zunaira Saieed, Choe Sang-Hun & Alexandra Stevenson  US President Trump’s latest tariffs sent shock waves throughout Asia, heaping additional turmoil on companies already grappling with uncertainty, while adding further complexity for trade officials ironing out the details of recently struck trade agreements. 

As the source of about 40 percent of goods imported into the United States, Asia has borne the brunt of Trump’s campaign to rewrite the rules of global trade. Trade officials across the region have scrambled to strike deals with his administration over the last several months to prevent punishing tariffs from crippling domestic industries. 

On Thursday, Trump announced another round of tariffs, which would go into effect on Oct 1, applying import duties ranging from 25 percent to 100 percent on pharmaceuticals, heavy trucks, kitchen cabinets, bathroom vanities and upholstered furniture. A significant portion of furniture and kitchen cabinet manufacturing originates from China and Southeast Asia. 

 

In a sign of the frenetic nature of US policy, Trump’s own trade representative, who was in Malaysia on Thursday negotiating with officials from Asian countries, signalled that the administration was not planning more tariffs. 

“What we are focused on now are the negotiations, not putting out rounds of tariffs,” Jamieson Greer, the US trade representative, told reporters at a meeting of the Association of Southeast Asian Nations in Kuala Lumpur. 

Twelve hours later, Trump announced the sweeping new tariffs on his social media feed. 

The new import duties build on the growing list of Trump’s industry-specific tariffs with an outsize impact in Asia, affecting the import of automobiles as well as key materials such as copper, steel and aluminum. Trump announced the new duties despite many unresolved issues related to his so-called reciprocal tariffs, which were announced in April and are still being negotiated with countries in Asia. He reached an agreement in July with the European Union, another major American trading partner. 

So far, the United States has failed to strike a trade deal with Asia’s two biggest economies: China and India. The White House secured commitments with Japan and South Korea over the summer, but both of those countries are balking on exactly how to execute the key component of the deal — a combined $900 billion in investments in the United States. 

Another factor hanging over the negotiations is a legal question about Trump’s use of emergency economic powers as the legal grounding for some of his tariffs. 

The Supreme Court has agreed to hear arguments in November to review a lower-court ruling that invalidated many of the global tariffs, stating that the emergency law the president invoked did not grant him the authority to impose his sprawling tariff campaign.