Southeast Asian countries are breathing a sigh of relief after the US announced tariffs on their exports that were far lower than threatened and levelled the playing field with a rate of about 19 per cent across the region’s biggest economies.
US President Donald Trump’s global tariffs offensive has shaken Southeast Asia, a region heavily reliant on exports and manufacturing and in many areas boosted by supply chain shifts from China.
Thailand, Malaysia and Cambodia joined Indonesia and the Philippines with a 19 per cent US tariff, a month after Washington imposed a 20 per cent levy on regional manufacturing powerhouse Vietnam.
Southeast Asia – with economies collectively worth more than $US3.8 trillion ($A5.9 trillion) – had raced to offer concessions and secure deals with the United States, the top export market for much of the region.
Malaysia’s trade ministry said its rate, down from a threatened 25 per cent, was a positive outcome without compromising on what it called “red line” items.
Thailand’s finance minister said the reduction from 36 per cent to 19 per cent would help his country’s struggling economy face global challenges ahead.
“It helps maintain Thailand’s competitiveness on the global stage, boosts investor confidence and opens the door to economic growth, increased income and new opportunities,” Pichai Chunhavajira said on Friday.
The extent of progress on bilateral trade deals with the United States was not immediately clear, with Washington so far reaching broad “framework agreements” with Indonesia and Vietnam, with scope to negotiate further.
Thailand was about a third of the way there, Pichai said.
The United States on Friday slashed the tariff rate for Cambodia to 19 per cent from earlier levies of 36 per cent and 49 per cent, a major boost for its crucial garments sector.
“If the US maintained 49 per cent or 36 per cent, that industry would collapse in my opinion,” Cambodia’s Deputy Prime Minister and top trade negotiator Sun Chanthol said.
In Thailand and Malaysia, business groups cheered a tariff rate that could signal a maintenance of the status quo between rival markets, among them beneficiaries of so-called “China plus one” trade.
Much remains to be worked out by the Trump administration, including non-tariff barriers, rules of origin and what constitutes trans-shipment for the purposes of evading duties, a measure targeting goods originating from China with no or limited value added, where a 40 per cent tariff would apply.
Vietnam has one of the world’s largest trade surpluses with the United States, worth more than $US120 billion in 2024, and has been often singled out as a hub for the illegal rerouting of Chinese goods to America.
It reached an agreement in July that slashed a levy from a threatened 46 per cent to 20 per cent, but concerns remain among some businesses that its heavy reliance on raw materials and components imported from China could lead to a wider application of the 40 per cent rate.
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