Trump asked manufacturers to diversify China, now high tariffs
Trump asked manufacturers to diversify China, now high tariffs
With the increase in US tariffs to China in the past decade, South and Southeast Asia have become decisive destinations for foreign and Chinese companies that want to diversify their supply chains. Thanks to favorable labor costs, growing middle classes and developing infrastructure, these regions are of great interest to investors. However, the increasing protectionism policy of US President Donald Trump during his second term forces these countries in a difficult situation because they are faced with some of the highest tariffs worldwide.
a changed trading landscape
When the new US customs numbers were published last week, many regional leaders celebrated the news and pointed out that the tariffs were lower than originally threatened by Trump. However, analysts warn that the new taxes are historically high and should not be treated lightly. Dan Ives, global research manager at Wedbush Securities, commented: "It is a hard blow for these countries and you have to try to negotiate the tariffs." The additional tariffs for so-called "transs hip" goods that are sent to a low-taxed country by a highly taxed country before they are re-exported to the USA are another hurdle.
The influence of China's
Due to their geographical location and aspiring populations,South and Southeast Asia are of great interest to the United States and China. As part of the trade war between the USA and China, China's leadership under XI Jinping positioned itself as a reliable trading partner for the region, while Trump put pressure on his tariffs and demands. The tensions between the United States and China, which has been persistent for years, reinforced by the Covid 19 pandemic, accelerated the emigration of production facilities to the region.
The effects on the region
When Trump announced his “Liberation Day” tariff, countries such as Cambodia (49 %), Laos (48 %) and Bangladesh (37 %) suffered a shock. The following tariffs, which were implemented on August 1, continued to include high sentences for several nations. While the tariffs for Cambodia, Vietnam, Indonesia and Malaysia were able to drop to 19 or 20 %, the question remains whether these figures should be seen as a victory. Deborah Elms, head of the Hinrich Foundation trade policy, described the lower tariffs as "misinformed". She emphasized that the high sentences are ultimately disadvantageous for American consumers and export -dependent Asian economies.
challenges from transs hip till
The impending additional tariffs on trans -hipments add another bureaucratic layer for companies and create uncertainty. The term transs hip hipman seems to have assumed an extended meaning under Trump, the obvious target is China. "What Trump means with his understanding of transshipment is Chinese content," said Elms. Companies in the region remain unclear with regard to the classification of the goods and the desired goals.
new action and supply chains
In the long run, Trump's tariffs could convert the supply chains in South and Southeast Asia and reduce the trade in the USA. Louise Loo von Oxford Economics noted that a detour of trade flows could already be observed in the latest commercial numbers. The transs hip tariffs could prevent the trend of companies to diversify their productions from China, which may lead to manufacturers from labor -intensive sectors move their productions back to China.The assessments diverge: Some experts believe that the new tariffs will not stop the drainage of production facilities from China. Due to increasing wages, China loses competitiveness in certain classic industries. The new measures could even lead to the Chinese production abroad continued by shifting parts of the production process to avoid the regulations.
Overall, the countries of the region are faced with an uncertain future, which contains both challenges and opportunities while they have to adapt to the changing global trade landscape.
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