By The Straits Times | Created at 2025-04-03 07:32:42 | Updated at 2025-04-04 18:44:10
1 day ago
HANOI – Vietnam’s government said on April 3 it would set up a task force, and other South-east Asian nations said they plan to seek talks with Washington as they reel from being hit with some of US President Donald Trump’s heftiest tariffs.
Countries such as Vietnam and Thailand are heavy exporters to the United States, having benefited as Chinese and international manufacturers shifted production to their economies to avoid levies on China that Mr Trump imposed during his first term.
Six of the nine South-east Asian countries listed by Mr Trump were slapped with much bigger-than-expected tariffs of between 32 and 49 per cent. By comparison, the level for the European Union was 20 per cent.
So far, none of the South-east Asian nations have spoken of retaliatory tariffs.
Vietnam, where companies like Apple, Nike and Samsung Electronics have large manufacturing operations, was hit with 46 per cent levies and appears particularly exposed. Its exports to the US were worth US$142 billion (S$191 billion) in 2024, nearly 30 per cent of its gross domestic product.
Vietnamese Prime Minister Pham Minh Chinh is setting up a task force to address the situation after an urgent Cabinet meeting early on April 3, state media said. He noted the country’s 8 per cent growth target for 2025 remained unchanged.
“Vietnam’s export-driven growth model has been highly successful, attracting multinational companies… However, a 46 per cent US tariff would directly challenge this model,” said Mr Leif Schneider, head of international law firm Luther in Vietnam.
Vietnam has already made multiple concessions to Washington to avoid tariffs, and is likely to offer more in the coming days.
“I expect negotiations to continue on ways to reduce or mitigate the impact of any new tariffs,” said Mr Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi.
Thai Prime Minister Paetongtarn Shinawatra said she hopes to bring down the 37 per cent rate imposed on Thailand, far greater than the 11 per cent it expected.
“We have to negotiate and get into details,” she said. “We can’t let it get to where we miss our GDP target.”
Thai economic growth has lagged regional peers, growing at 2.5 per cent in 2024, held back by soaring household debt. It is hoping for 3 per cent growth in 2025.
Commerce Minister Pichai Naripthaphan said his government was prepared for negotiations and has high hopes they would go well, citing Thailand’s good relations with the US.
Malaysia, which was dealt a rate of 24 per cent, announced it would not seek retaliatory tariffs, and it said the Trade Ministry would be actively engaging with the US authorities “to seek solutions that will uphold the spirit of free and fair trade”.
Cambodia is facing tariffs of 49 per cent that will hurt its garment and footwear industries and crushing hopes that it could attract investment relocating from other countries in the region.
It is a “very, very serious situation for the economy”, said a Cambodia-based investment consultant who declined to be identified.
There is “nothing that Cambodia can offer as a negotiating tool, and will be at the back of a very long queue”, he added. REUTERS
Join ST's Telegram channel and get the latest breaking news delivered to you.
