Donald Trump, the President of the United States, announced on the 2nd (local time) that he would impose mutual tariffs on all countries, with predictions that U.S. mutual tariffs would deal the biggest blow to Asian countries. Experts analyzed that Asian currencies and stocks are facing selling pressures, casting a shadow over growth prospects.
According to Bloomberg News, in morning transactions on that day, the Thai baht and Chinese yuan fell by about 0.7%, while the Australian dollar and New Zealand dollar, which are sensitive to economic conditions, also declined by about 1%. As appetite for safe-haven assets intensified, Australian and New Zealand Government Bonds surged.
Earlier, President Trump revealed the plan for mutual tariffs. The key point is to impose a basic tariff of 10% on all countries and to impose different individual tariffs on about 60 countries labeled as 'worst'. As a result, mutual tariffs of 25% will be imposed on South Korea, 24% on Japan, and 34% on China. China previously had an additional tariff of 20%, bringing the total tariff rate to 54%.
The mutual tariff rates for other Asian countries are ▲Vietnam 46% ▲Taiwan 32% ▲India 26% ▲Thailand 36% ▲Indonesia 32% ▲Malaysia 24% ▲Cambodia 49% ▲Bangladesh 37% ▲Singapore 10% ▲Philippines 17% ▲Pakistan 29% ▲Sri Lanka 44% ▲Myanmar 44% ▲Kazakhstan 27% (in the order of announcement).
Experts noted that the mutual tariff rate imposed by the U.S. on Asian countries exceeded expectations, leading to concerns about an economic recession. Nick Tweedale, senior analyst at AT Global Markets, said to Bloomberg News, 'This was a tougher move than expected. Most Asian markets, including Japan, have been hit hard, and both stocks and currencies are projected to plummet.' He particularly noted, 'The overall tariff on China is up to 54%, which will negatively impact global trade.'
Aroop Chatterjee, a strategist at Wells Fargo New York, pointed out, 'The tariff levels on Asia and Europe are much higher than expected,' adding, 'Aside from the U.S., Asia will bear the largest brunt after Canada and Mexico.'
Ueda Marito, head of market research at Japan's SBI, said, 'Japan has a large trade deficit with the U.S. in the automotive sector, making negotiations with the U.S. challenging,' predicting a strengthening of the yen as a result. He continued, 'With long-term U.S. interest rates declining and risk-averse sentiment increasing, there is a possibility that the Japanese stock market could plummet, and the yen could appreciate to the low 148 yen per dollar range.'
Experts diagnosed that the damage would be particularly severe, especially in emerging markets centered around Southeast Asia. Brendan McKenna, an economist for emerging markets at Wells Fargo, stated, 'The main target of this measure is clearly Southeast Asia.' Brad Bechtel, head of foreign exchange at Jefferies Financial Group, remarked that many emerging countries are still grappling with inflation issues, indicating that this measure could fuel global inflation.