Trumps taxes float Southeast Asia in the arms of China

Like a smoke, the raised American import tariffs have arrived in Southeast Asian countries such as Vietnam, Cambodia and Laos-most of them are united in the regional partnership Asean. Especially when it turned out during the weekend that Trump does not seem to do not intend to change his course after large losses on the US stock exchanges.

“The largest importer in the world has A sign on his door hung: ‘Closed for business’”, Said Stephen Olson, researcher affiliated with the Singaporean ISEAS Institute, to the Japanese news medium Nikkei Asia. On Monday, Asian stock prices went further down.

He clearly focuses on the countries that have close ties with China, the country he sees as his greatest enemy

For the Asean countries, the taxes, if they are continued, are a catastrophe. There is fear and confusion, because apart from the inimitable calculations, the geopolitical logic also seems to be totally lacking. « Trump thinks he is making trade relationships more fair, » says Malaysian-American economist Woo Wing Singaporean news medium CNA. « He clearly focuses on the countries that have close ties with China, the country he sees as his greatest enemy. » The countries that in recent years emphatically offered themselves to the US as an alternative to China, such as Vietnam, have been imposed high taxes. Woo Wing expects the taxes to hunt the Southeast Asian allies in the arms of China.

Since 2014, the United States saw with a sorrow at how China became militarily and economically in Southeast Asia, especially more dominant. The US caught up with the ties with allies, such as Thailand, Vietnam and the Philippines. Partly because of this, Southeast Asian countries have developed in recent years as production centers for Western companies that make all kinds of goods. That too seems a reason for Trump to impose high taxes.

For example, Vietnam, Laos and Cambodia offered themselves with cheap labor and flexible rules as an attractive alternative to China, which became increasingly closed to the West. Vietnam, Thailand and Malaysia experienced economic growth, invested in labor and training, which increased the standard of living in these countries.

The Southeast Asian countries have little defense against the towering import rates. Cambodia receives 49 percent for her choose, Laos 48 percent, Vietnam 46 percent, Thailand 36 percent and Indonesia 32 percent. Trump is talking about a correction of the import export balance.

Take advantage of low wages

American companies and consumers have been taking full advantage of the low wages in this region so far. And vice versa, the Southeast Asian countries accepted the low wages in exchange for economic development. But precisely because wages are low, it is impossible for these countries to import the same amount from the US.

Especially for Vietnam can cause the imposed import levy economic malaise. The communist one -party state is not a friend of China and has invested in good ties with the West since the 1990s. 30 percent of all exports go to the US. If that were to fall, the blow would be huge. Investments will be delayed. « Vietnam can still try to take more from Boeing and Lockheed Martin, but otherwise the negotiating position is poor, » writes Economist Trinh Nguyen for Nikkei Asia.

On Friday, the Vietnamese leader to Lam offered to completely remove the Vietnamese taxes on American products in exchange for revising the imposed American rates. Whether Trump will enter that offer is still unclear.

Together with Laos, Cambodia gets the highest rates for her choosing. This seems like a political choice, a punishment, because these countries are financially – and therefore politically – very dependent on China. Although the American influence on Cambodia was already waning, Cambodia still exports around ten billion dollars to shoes and clothing to the US. In 2023 the country only imported for 264 million dollars. The country can never close this gap in the trade balance.

Casey Barnett, the president of the American Chamber of Commerce in Cambodia, encouraged the country to make a phone call with Trump. “Cambodia can lower its rates and one Subscription to Starlink take, « he told the State newspaper last week Khmer Times. « But the country can’t do much more, » he had to admit. « Except for an invitation for the Ream Navy Basis. »

Cambodia is led by their manet, son of dictator their sen. The family has been carrying a reign of terror since 1985 and has close ties with China. The new Naval Base Ream, paid by China, was opened on Sunday. Until now, the US tried in addition to trade contacts via soft powerfor example, through aid organization USAID and support for democratic forces, western contacts in the country. But these activities have been stopped under Trump.

Returning is not an option

Indonesia also wants to visit Trump to negotiate the taxes. The US is an important export country after China. There is fear that hundreds of thousands of Indonesians will lose their work.

Singapore and the Philippines were hit milder compared to their neighboring countries. The Philippines are an important ally in the fight against the Chinese military aggression in the South Chinese Sea. It is not clear why the rates for Singapore are relatively low (10 percent). The city state is an important regional financial junction. There are close ties with China, but like the Philippines, the country is an important ally of the US. Because of its position as a financial junction, the country is more than surrounding countries sensitive to stagnating world trade. A counter-offensive with increasing rates for the US as China is doing now is not a realistic option for Southeast Asian countries. The countries hope for negotiation space and will focus on diversification of trade relationships. In addition, they want to wait – given the whimsical nature of Trump. Moreover, relocation of production capacity is not feasible in the short term.

If you look at it globally, we are now one of the most peaceful areas

The Asean countries will meet on Thursday. Most of them want to do everything they can not to become too dependent on China. The leaders of Asean may focus more on the EU and the Middle East as trading blocks, in addition to the existing trade with the richer, surrounding countries such as Japan, Australia and South Korea, analysts expect. The situation could also lead to better tires within ASEAN. The current chairman, Malaysian Prime Minister Anwar Ibrahim, already called for mutual solidarity this weekend. « Asean has 640 million inhabitants, that is our economic strength. In addition, if you look at it globally, we are now one of the most peaceful areas. »

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