Uniform 15% Tariff Boosts Asia-Pacific Economies
A uniform 15 per cent tariff, announced by US President Donald Trump, would benefit certain Asia-Pacific economies that have encountered significantly higher country-specific levies, including China and much of Southeast Asia, according to analysis on Tuesday. However, it will have a minimal effect on nations like Japan, South Korea, and Taiwan, where the base rate is already at 15 percent, the statement indicated. While uncertainty looms, certain facts remain clear. “A uniform 15 per cent tariff would benefit some Asia-Pacific economies that have faced much steeper country-specific levies,” it said.
Last week, the US Supreme Court ruled against the Trump administration’s country-specific tariffs, leading Trump to impose a 10 percent tariff on all countries for a duration of 150 days. He has also announced an increase to 15 per cent. However, no order or proclamation has been issued so far in this regard. The court ruling also brings to light concerns regarding the recent trade agreements established with India and Indonesia. Essential details, including the timeline for India to cease its purchases of Russian oil and the volume of tariff-free textile exports from Indonesia, remain to be finalised. “India has postponed its plans to dispatch a delegation to Washington,” it stated.
It added that the court ruling restricts Washington’s capacity to impose country-specific tariffs, thereby diminishing its leverage in trade negotiations, including critical discussions such as the upcoming meeting between Trump and Chinese President Xi Jinping in just over a month. We anticipate that Trump will explore alternative legal avenues to increase tariffs, and it would not come as a surprise if US tariffs ultimately align closely with their levels prior to Friday. “Some governments may slow-walk ratification of trade deals with the US, but we think they are unlikely to quit altogether for fear of inviting more punitive tariffs,” it said.
Even in a best-case scenario, where tariffs eventually settle below the rates in place before February 20, there will be plenty of trade uncertainty and logistical mess. It said that firms may seek compensation for tariffs already paid — a process that could prove highly contentious and time-consuming. There is a possibility of a new wave of front-loading; should US importers perceive the ruling as a short-lived relief, they might expedite shipments prior to the reimposition of tariff barriers. “In short, the decision may offer momentary relief, but business and policymakers would be wise to keep the champagne on ice,” it said.
