Several economies in the Asia-Pacific region may face increased trade tariffs from the United States, with India, South Korea, and Thailand among the most vulnerable, according to S&P Global Ratings.
In its latest report, S&P highlighted that these economies could be at risk of trade retaliation, particularly under the policies of former US President Donald Trump, should he return to office.
The report, titled Asia-Pacific Economies Likely To Be Hit By US Trade Tariffs, noted that nations such as Vietnam, Taiwan, Thailand, and South Korea have significant economic exposure to the US.
This means that if tariffs are imposed, these countries could experience the most economic impact.
India and Japan, however, may have some level of protection due to their more domestically driven economies. According to S&P, this factor could help mitigate the potential consequences of increased US tariffs.
Trump has previously expressed his intent to impose reciprocal tariffs on trade partners, including India. His administration had already introduced additional 10 per cent tariffs on imports from China, along with 25 per cent tariffs on steel and aluminium.
S&P believes that these measures may not be the last, as the US government has considerable flexibility in imposing trade restrictions. The uncertainty surrounding future tariffs remains high, and outcomes could be influenced by bilateral negotiations.
The report also pointed out that some countries in the Asia-Pacific region impose significantly higher tariffs on US products compared to what the US imposes on their goods. These countries are likely to come under scrutiny for potential "reciprocal tariff action".
S&P explained that tracking these tariff differentials is complex, as it is unclear at which level the US administration will compare tariff rates. Depending on how detailed the analysis is, the final outcomes may vary greatly.
In assessing the impact of tariffs, S&P examined the weighted average tariff rates imposed by Asia-Pacific economies on US imports, as well as the tariffs imposed by the US on products from the same countries.
Based on these calculations, India, followed by South Korea and Thailand, emerged as the most vulnerable to trade retaliation.
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