Tariff deals: Has Trump carried through against Asian countries?

The White House has announced new trade tariffs for dozens of countries, just hours before Donald Trump's original deadline of midnight. The president signed a new executive order for the higher levies on imports from 69 trading partners, ranging from 10 to 41 percent. These are now due to come into effect next Thursday. Separately, Washington announced some goods from neighbouring Canada face We asked CBC journalist Evan Dyer how Canada may respond. Pressure within Canada from a very prominent premier, the premier of Canada's biggest province, Ontario, to retaliate immediately. Typically these threats, these tariffs I should say, come with a threat, which is that if you retaliate we will increase the tariff further. So of course when Canada was initially hit with a 25 percent tariff by Donald Trump, it did respond. And it attempted to respond on a dollar for dollar basis, which is hard for Canada to do because the US economy is ten times the size, but which Canada has been able to do so far. But you know there is pressure to retaliate to these two, but of course there's a knowledge that Donald Trump can then always just come back and raise it again, and we have seen him do that with other countries. So it seems likely that as long as USMCA goods are exempt, Canada may hold its powder for a little while, may try to hold off and continue this negotiation because they are in the middle of a negotiation that is supposed to reach a final deal, a grand bargain. And for us to retaliate and then to get into a short-term tit-for-tat war on tariffs might not be the most effective approach. So it may be that this time, for the first time, the federal government, the government of Canada, will resist that pressure from people like the Premier of Ontario to hit straight back and instead try to reach that grand bargain in the next few days. CBC journalist Evan Dyer there in Ottawa. Asian markets are reacting to the White House's increased tariffs, with shares falling across the region. Countries throughout Asia are affected. The rates range from 15 percent for South Korea, 25 percent for India. Laos and Myanmar have both been hit with 40 percent, one of the highest rates the US has imposed so far. Despite the damage, some Asian nations are relieved the tariffs aren't as high as initially threatened. From Hong Kong, we're joined by Trinh Nguyen, senior economist at Nartixis, an investment management firm. Where do you see Trump's higher tariffs doing the most damage in Asia? Well, the highest is in the 40s. So we got Laos and we got Burma, Myanmar getting the tariffs. But really, most of the countries settle somewhere in the 20s. I would say the bigger picture is that US allies, the EU, Japan, South Korea, all these countries that have a big trade surplus with the US, gets a 15 percent with investment and purchases, while the other ones get around the 20s to the 19. That's the Southeast Asian countries, Pakistan. India got a pretty high one, I think 25 percent with some punishment for Russian oil. So in general, we're taking a look at the high teens to the 20s as the average tariff for the Asian countries, which for Southeast Asian countries is much lower than expected. But for some, it remains relatively the same, such as India. And the question next is really, while the headline tariff rates are pretty high, although lower for some countries than expected, we have a lot of exemptions at the moment. So what will these exemptions look like into the future, such as electronics, semiconductor, for example? You mentioned Russian oil there. Do these tariffs target transshipment rules? Absolutely. So there is a 40 percent transshipment punishment. So we're talking about at the minimum 10 percent for everyone except for USMCA countries. Mexico came out on top. But the 40 percent is really the punishment. And they will take every six months review on the item. So this applies for everyone and particularly targeted countries where they think a lot of transshipment happens, which is in Southeast Asia. So though we settle for most of the Southeast Asian countries, 19 to 20, there's a threat of 40 percent. What that means is that the bigger picture here is that in Trump 1.0, a lot of Chinese experts were able to reroute via direct investment or via transshipment through these countries. That loophole is slowly getting closed because that is at the forefront of the reciprocal terror. And just explain to me why China is not on the list, because production lines in the region are closely linked to China. And Trump wants to tap into that massive market, doesn't he? So there are other tariffs other than reciprocal tariffs. We have the fentanyl tariffs, which Canada and Mexico face, as well as China. China faces 20 percent fentanyl tariffs on top of the 25 percent tariff, which is a country Trump 1.0. So that's 45 plus 10 percent that's being paused, right? So China is getting the minimum 10 percent, but that's not the reality. The reality is that that is being expired on the 12th of August and still being discussed. Fundamentally, we think that China is going to end up somewhere in the 50s to the 60 percent level, which is highest other than Russia, where there's no trade taking place. So we're talking about buckets of countries where allies and preferential countries are getting much better access, but they're still facing some tariffs. The best position is really North Africa and North America, particularly Mexico. What about Taiwan? There's a lot that it could offer the U.S., but also it does have a lot to lose, doesn't it? Right. Taiwan is having 20 percent. The good news for Taiwan is that most of its exports is semiconductor, which is exempted. Electronics are being exempted. So that's a big, big question mark. And that's why Taiwan wants to negotiate on the 20 percent. It wants to not just get the 20 percent, but also want to secure any future tariffs on the sector. So should the semiconductor ultimately get removed and we get a really huge tariff that it would want to do so. So Korea is an example where they managed to lower the auto tariff, very similar to the EU and Japan. So for us, Taiwan, that is very, very important. And meanwhile, a lot of these countries are deploying this investment on shoring. They're arbitraging this risk of future tariffs by investing in the U.S. But there's only so much of that you can do, right, because you still do want some investment on shore so that you can employ your population. And that's the reason why for Taiwan, what's really going to be important is that up until this is not really final, the details are really going to be important. And for many of these countries, that's really the reality. For Vietnam, 20 percent tariffs is high, but it's very manageable. Why? A lot of tariffs are being exempt to electronics and so on and so forth. And what's key is that we get the details of what transshipment is going to look like. And finally, the EU tariffs are not stacked. But what about the rest of the countries? Meaning the EU managed to get the maximum of 15 percent is not stacked on top of other tariffs. But we're not really sure what that means for the rest of the countries. And Trinh, just a quick yes or no. Are we going to get fairer trade out of all of this? Well, it depends on sector by sector. What we will get is greater transactional costs to trade and greater friction to trade. I would say that fairer depends on the sector you're talking about and the market. So a good example is India, where it has 110 tariffs on auto. Is it going to open its market so that we can get a fairer trade? Not exactly. What we have is for sure higher friction to trade with the United States. That friction is higher for some and less for others. And that's the reality we live in. Fair or not, that's something we have to deal with. And if you're a big exporter, your number one job today is really to lower the tariffs and the hurdle to trade to the United States. Meanwhile, try to diversify to other markets, which is a lot harder to do. Economist Trinh Nguyen, thank you very much for being on DW. Thank you for having us.