Retaliation and Negotiation, Asia Responds to Tariff Implementation
Key Takeaways
Retaliation: China stands unique among Indo-Pacific countries with the highest tariff rate of 145 percent while others have been paused at 10 percent for 90 days. China is also the only country in the region that has chosen to economically retaliate against U.S. tariffs, escalating the tensions into a trade war.
Negotiation: Most other Indo-Pacific economies are prioritizing negotiation with the United States, offering trade concessions and increased U.S. purchases to secure tariff relief. For example, Taiwan pledged USD 200 billion in new U.S. purchases, Japan signaled USD 1 trillion in U.S. investments, while Vietnam offered reductions on tariffs on U.S. goods.
Adaptation: Countries are also adapting to the changing trade environment and market fluctuations following the tariff announcements, both reciprocal tariffs as well as earlier autos and steel and aluminum tariffs. Economic interventions to date include South Korea’s expanded export vouchers and policy financing for the auto sector, India’s interest rate cut to 6 percent, and the Philippines’ introduction of stock market stabilization measures.
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Retaliation and Negotiation, Asia Responds to Tariff Implementation
Key Takeaways
Retaliation: China stands unique among Indo-Pacific countries with the highest tariff rate of 145 percent while others have been paused at 10 percent for 90 days. China is also the only country in the region that has chosen to economically retaliate against U.S. tariffs, escalating the tensions into a trade war.
Negotiation: Most other Indo-Pacific economies are prioritizing negotiation with the United States, offering trade concessions and increased U.S. purchases to secure tariff relief. For example, Taiwan pledged USD 200 billion in new U.S. purchases, Japan signaled USD 1 trillion in U.S. investments, while Vietnam offered reductions on tariffs on U.S. goods.
Adaptation: Countries are also adapting to the changing trade environment and market fluctuations following the tariff announcements, both reciprocal tariffs as well as earlier autos and steel and aluminum tariffs. Economic interventions to date include South Korea’s expanded export vouchers and policy financing for the auto sector, India’s interest rate cut to 6 percent, and the Philippines’ introduction of stock market stabilization measures.
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