US Tariff Escalation
The United States has intensified its tariff campaign, threatening punitive duties on over a dozen countries from August 2025. This move follows a delayed deadline for trade negotiations under the so-called “reciprocal” tariff policy. The ongoing trade tensions have unsettled global markets and complicated international relations.
Background of US Tariff Policy
The tariff initiative was first announced in April 2025 with a 90-day grace period to negotiate trade agreements. The original goal was to secure 90 deals in 90 days. However, limited progress has been made, prompting an extension of the deadline to August. The policy aims to address trade imbalances by imposing tariffs on countries with export surpluses to the US.
Countries Affected and Tariff Rates
Fourteen countries have been warned of tariffs ranging from 25% to 40%. Southeast Asian nations face some of the harshest levies – Indonesia (32%), Cambodia and Thailand (36%), Laos and Myanmar (40%). Other affected countries include Bangladesh (35%), Tunisia, Malaysia, Kazakhstan, South Africa, and Bosnia and Herzegovina (30%). The tariffs target manufacturing hubs and developing economies with strong export ties to the US.
Trade Deals and Negotiation Status
Only two deals have been finalised so far. The UK secured a deal with a 10% tariff on most goods and zero tariffs on steel and aluminium. Vietnam agreed to a 20% tariff on exports, though details remain vague. Discussions with China have reached a fragile truce. Several countries, including South Korea and the EU, are actively negotiating to avoid tariffs. South Africa has criticised the tariffs as unjustified due to its low tariff rates on US goods.
Market Impact and Business Response
The threat of tariffs has caused market volatility. US stock indices fell, with major Japanese automakers’ shares dropping sharply. The US dollar experienced its worst half-year performance in over five decades. Economists warn that tariff uncertainty dampens investor confidence and disrupts supply chains, potentially slowing economic growth.
Reasons for Targeting Asian Countries
Asian countries face steep tariffs due to perceived trade imbalances with the US. Critics argue that deficit calculations are flawed and suggest the US aims to pressure China indirectly by targeting its investment partners in Southeast Asia. The region’s role as a manufacturing hub for textiles, footwear, and electronics means tariffs will raise costs and disrupt global supply chains.
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