Trump’s Tariffs On China Will Have Massive Spillover Effects on Asia
Trump has been in the limelight ever since he became the President of the United States. Recently, he has been in the news for all the wrong reasons. Couple of weeks ago, the infamous US President announced that he will levy tariffs on the import of products and these tariffs were exclusively announced for China. This meant that the same products that China was importing for less would cost it a lot more. China was worried, and so was everybody else, but in a tit-for-tat response, China also announced that it would levy tariffs on the US of up to $150 billion. Things don’t look promising for the two largest economies of the world however; the problem is that Trump’s decision to levy tariffs would not only impact China but the rest of Asia as well.
If US and China’s tensions don’t improve, it is confirmed that export oriented Asian countries would suffer the most and would turn out to be the biggest losers. Therefore, it is not just China that is going to suffer because of Trump’s decision but other Asian economies as well. It is already being said that the Southeast Asian economies are going to be the most vulnerable to Trump’s decision and announcement because they contribute significantly to China’s exports. Moreover, it is also being said that amongst the Asian economies, Philippines is going to suffer the most.
The Director for Regional Cooperation and Integration, Cyn-Young Park, said that across Asia, there is significant regional value chain so the fight of tariffs between China and the US could have major spill over effects all across this value chain. The whole of the Southeast Asian network is going to suffer especially those economies that provide semi finished goods along with raw material to China. Amongst these economies, Philippines is going to get the biggest and worse blow.
Things don’t seem to be going in the right direction, especially not for China because the US’s decision to levy tariffs on it will not turn out to be fruitful for other Asian economies as well.