Governments in Asia-Pacific have so far not followed China's lead by retaliating against US president Donald Trump's import tariffs, even as they warn of the potential for long-term economic disruption.
The leaders of Vietnam, Malaysia, Indonesia, Taiwan and Singapore said over the weekend that they are not planning to respond in kind to the US tariffs.
The restrained reactions came despite China's decision to match Trump's targeted tariffs with duties of 34pc on all imports from the US. China's tariffs, announced late last week, take effect on 10 April, a day after what Trump is calling his "reciprocal" duties on a range of countries.
Countries in Asia-Pacific have been hit with some of the highest of Trump's targeted duties.
Vietnam, which is facing one of the highest targeted tariff rates of any country at 46pc, is considering removing all its own tariffs on US imports, Trump said following a call with To Lam, general secretary of Vietnam's communist party, on 4 April. The offer has not been officially confirmed by Hanoi.
Vietnam benefitted from the tariffs that Trump imposed on China during his first term in office, as some manufacturing and exports were shifted to the country. That helped send its trade surplus with the US to a record $123bn last year, the third-highest of any single country behind China and Mexico, according to US customs data.
Malaysia, which faces a 24pc tariff, will not levy retaliatory duties, prime minister Anwar Ibrahim said on 6 April. The US duties are a major threat to the world economy and could force Kuala Lumpur to reduce its forecast for gross domestic product (GDP) growth this year, he warned.
The direct impact of the US tariffs on commodity exporters like Malaysia and its neighbour Indonesia has been reduced by the extensive exemptions announced for energy, metals and other commodities. Still, the prospect of a global economic slowdown and disruption to trade flows threatens to have a major impact.
Despite their measured approach, governments of emerging Asian economies may struggle to quickly negotiate lower tariffs given Trump's focus on reducing bilateral trade deficits, analysts at UK bank Barclays said on 7 April. The bank has reduced its 2025 forecast for GDP growth in emerging Asia by 0.2 percentage points to 3.3pc and warned of the risk of deeper cuts.
Australia eyes price hit
The government of Australia, another large commodity exporter, warned on 7 April that the uncertainty caused by Trump's tariffs could reduce consumer confidence and potentially damage the budget by causing a decline in commodity prices.
Trump's so-called "liberation day" tariffs are more significant than expected when it released its budget in March, the Australian Treasury said in its economic and fiscal outlook released ahead of federal elections next month.
The direct impact of the tariffs on Australia would be limited, but indirect effects would be larger because of the hit imposed on the country's major trading partners, including China, it said.
"The potential magnitude and persistence of the economic effects of these announcements has resulted in greater-than-usual uncertainty around the outlook," the Treasury said.
Trump has targeted Australia with the minimum 10pc tariff, but this could still disrupt its exports of beef and tallow, among other products. Australian prime minister Anthony Albanese has also pledged not to retaliate with tariffs on US imports.
Japan and South Korea, long-standing allies which nevertheless have been singled out for higher US tariff rates of 24pc and 25pc respectively, have also indicated they will not respond in kind.
The US accounted for almost 19pc of South Korea's total exports in 2024, including passenger cars, auto parts and lithium-ion batteries. Seoul is considering measures to support its automobile industry in the wake of the tariffs, the trade and industry ministry said.
India, which faces a 26pc rate, is considering lowering import tariffs on US goods, including a 2.75pc duty on LNG, to ease tensions.
