‘Win-win’ and still pushing: Reactions to Trump tariffs

TOKYO – Some places reacted with relief on Aug 1 after US President Donald Trump announced tariffs that, in some cases, were lower than threatened and delayed by a week to Aug 7.

But others, including Switzerland and chip powerhouse Taiwan, still hope to negotiate lower rates, and uncertainty remains over transshipments and levies on Japanese cars.

Mr Trump’s announcement does not cover export giant China – currently in negotiations on a trade deal ahead of an Aug 12 deadline – but here is how other economies reacted:

Thailand: ‘Major success’

The 19 per cent levy for Thailand and Cambodia –

fresh from border clashes

that killed over 40 people – is a let-off from the threatened 36 per cent.

Thailand called it a “major success” and a “win-win approach aimed at preserving Thailand’s export base and long-term economic stability”.

The US trade deficit with Thailand hit US$45.6 billion (S$60 billion) in 2024. Its main exports include machinery, vehicles and auto components.

Cambodia: ‘Best news’

Cambodian Prime Minister Hun Manet called it “the best news for the people and economy of Cambodia to continue to develop the country”.

The major manufacturer of low-cost clothing for Western brands was initially menaced with a tariff of 40 per cent.

Neighbouring Vietnam concluded an agreement with Washington at the beginning of July on a rate reduced to 20 per cent.

What about transshipments?

But Washington also intends to impose a 40 per cent surcharge on goods transported to the US via third countries, known as transshipments.

This could hurt, in particular, nations in South-east Asia, whose production chains are closely linked to China.

Many Cambodian factories, for example, are Chinese-owned and the White House has accused Cambodia of allowing Chinese goods to stop over on the way to US markets, skirting steeper rates imposed on Beijing.

Experts, however, are unclear on how Washington will define these “transshipment” goods.

Taiwan: Still pushing

Taiwanese President Lai Ching-te called its 20 per cent tariff announced by Mr Trump “temporary… with the possibility of further reductions should an agreement be reached”.

The US President had threatened to hit the island with a 32 per cent tax and possible duties on the island’s huge semiconductors shipments.

Soaring demand for Taiwan’s artificial intelligence chips industry has fuelled its trade surplus with Washington, putting it in the crosshairs of Mr Trump’s tariff blitz.

Washington “needs Taiwan in supporting resilient supply chains, in supporting manufacturing and some high-end technologies”, Taiwanese Vice-President Hsiao Bi-khim said recently.

Switzerland: ‘Great regret’

Switzerland expressed “great regret” that it was hit with 39 per cent, up from the threatened 31 per cent, despite its “very constructive position”.

The levy – more than double the European Union’s 15 per cent – appeared to catch the rich Alpine nation off guard.

Switzerland ranks sixth in terms of direct investment in the US, with pharma giants Roche and Novartis announcing major spending plans in recent months.

Japan: Car confusion

A tariff of 15 per cent agreed last week between Japan and Washington – down from a threatened 25 per cent – is due to be applied from Aug 7.

But Japanese auto exports were already being hit by a 25 per cent rate, and Tokyo wants to know when this will be lowered too.

“We continue to urge the US to take prompt measures to implement the agreement, including lowering tariffs on automobile and auto parts,” Prime Minister Shigeru Ishiba said on Aug 1.

Confusion also surrounds Mr Trump’s claim that Japan – as a “signing bonus” – will invest US$550 billion in America, which will recoup 90 per cent of the profits.

Malaysia: ‘Positive outcome’

Malaysia also achieved a lower tariff of 19 per cent, down from 25 per cent, which the government called

a “positive outcome”

.

“This decision by the United States reflects the strong and enduring economic ties between our two nations,” Trade and Industry Minister Zafrul Abdul Aziz said.

Sri Lanka: ‘Happy’

Sri Lanka also expressed relief that it will face a 20 per cent hit, a sharp reduction from the 44 per cent originally floated, and expressed hope of a further cut.

“We are happy that our competitiveness in exports to the US has been retained,” Finance Ministry official Harshana Suriyapperuma told reporters.

Around 40 per cent of Sri Lanka’s US$5 billion of garment exports in 2024 went to the US. AFP