By Patturaja Murugaboopathy and Gaurav Dogra
(Reuters) – As U.S. President Donald Trump’s new trade tariffs on China, Mexico and Canada kick off, sparking another trade war, countries in Asia’s complex and integrated global supply chain are in the crosshairs.
The following graphics illustrate Asia’s exposure to U.S. tariffs on China and the escalating trade war, which is set to impact exports and growth in the region.
Vietnam, Taiwan, and Thailand are the most exposed to increased U.S. tariffs due to their high export-to-GDP ratios with the United States.
With Trump proposing tariffs targeting sectors such as semiconductors, pharmaceuticals, steel and aluminium, Nomura expects over a quarter of exports from South Korea, Japan, Malaysia, the Philippines and Taiwan could be affected.
Malaysia, South Korea, and Thailand are more tied to North American supply chains, making them vulnerable to U.S. tariffs on Canada and Mexico.
In Malaysia, 0.59% of GDP is tied to trade that adds value to Canadian and Mexican exports to the U.S., the highest share among Asian economies, data shows.
Taiwan and Vietnam are more exposed to China’s exports to the U.S., meaning they could be heavily impacted by U.S.-China trade tensions.
While Trump’s tariffs target the three countries to address trade imbalances, nations with the highest trade surpluses with the U.S. are also seen as at risk of further tariffs. In Asia, China, Vietnam, Japan, and Taiwan have the largest trade surpluses with the U.S., according to a recent U.S. Treasury report.
Some Asian economies also face risks from reciprocal tariffs, as President Trump directs plans for counter-tariffs on countries that impose higher tariffs on U.S. imports than those the U.S. levies.
“If the current U.S. administration is deciding on reciprocal tariffs based on the effective tariff differential alone, it is likely that, within Asia, India, Thailand, and South Korea would be most at risk and could face additional tariffs of around 5ppts,” Oxford Economics said in a report.
(Reporting By Patturaja Murugaboopathy; Editing by Vidya Ranganathan and Philippa Fletcher)
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