Weighing Web of Trump Tariff and Implications for Asia

Spread love

Economist Trinh outlines steep tiered tariff regime set to begin August 7; India, Southeast Asia face up to 40% rates, while China awaits a separate negotiation track

By S JHA

August 1, 2025 — A sweeping new tariff structure championed by US President Donald Trump is sending shockwaves across global trade corridors, with dozens of countries—including India, Southeast Asian nations, and US allies like Japan and the EU—facing sharply higher duties. The tariffs, analyzed by economist Trinh, mark a dramatic escalation of Trump’s second-term “America First” trade policy, and are set to go into effect on August 7.

According to Trinh’s analysis, shared in a thread on X, the new tariff regime is structured in progressive tiers:

10% — Base reciprocal tariff, applied broadly to all countries.
15% — EU, Japan, South Korea and 33 other countries including Angola, Botswana.
18-20% — Southeast Asian middle-income economies like Indonesia, Malaysia, Vietnam, Philippines, and South Asian nations including Bangladesh and Sri Lanka.
25% — India, Brunei, Kazakhstan, Tunisia.
30-35% — Algeria, South Africa, Iraq, Serbia.
39-41% — Switzerland (39%), Laos and Myanmar (40%), Syria (41%).

India, which had been lobbying for lower tariff treatment, will face 25%, slightly lower than its earlier Trump-era level of 26%. But analysts warn that this still places India well above the threshold being targeted by Southeast Asian competitors like Vietnam, whose rate was reduced from 46% to 20%.

“India was hoping to move closer to the 15% mark, especially after increased defence and tech collaboration. But these rates show the White House sees Delhi more as a transactional partner than a strategic ally right now,” Trinh noted.

China’s Separate Track: Tariffs Under Review

China, notably, is not yet part of the new slab system. Its tariff structure is under separate negotiation and currently involves:

10% reciprocal tariff
+20% fentanyl-specific tariff (under recent extension talks)
+25% legacy tariffs from Trump’s first term under Section 301

Negotiations are reportedly underway for either extension or recalibration of the China-specific tariffs, with fentanyl exports and intellectual property enforcement being key sticking points.

The tariffs take effect on August 7, but the administration has introduced nuanced grace periods:

Goods already at U.S. ports or in transit before August 7 can qualify for varied rates if consumed before October 1.
Transshipped goods—goods routed through third countries to avoid direct tariffs—will face a flat 40% penalty, regardless of origin.

“There’s still time to negotiate these down,” Trinh said, pointing to a six-month review window the White House has built in for all tariff levels. “But until then, supply chains are going to scramble,” she added.

What About Section 232 and Section 301?

Beyond the reciprocal tariffs, additional duties under Section 232 (national security) and Section 301 (IP enforcement and unfair trade practices) still apply to many countries—particularly China. This means the actual tariff burden could be significantly higher than headline numbers suggest.

For example, many Chinese industrial products and electronics will continue to face layered tariffs even if base rates are not increased immediately.

Although EU, Japan, and South Korea fall into the 15% category, Trinh clarifies that for them, tariffs are not “stacked”—meaning they won’t face multiple overlapping levies as some developing countries might. But that’s cold comfort for export-heavy economies already grappling with sluggish global demand.

The announcement has sparked alarm in export-dependent economies. Southeast Asian governments are reviewing trade pacts and looking to pivot toward regional markets to hedge against US exposure. Indian commerce ministry officials are reportedly preparing a formal protest while simultaneously seeking sector-specific exemptions.