Capital Securities Network reported on April 3 (Editor Xiao Xiang) - In the highly anticipated tariff list announced by Trump on Wednesday, Southeast Asia has undoubtedly become the hardest-hit region...

Trump held up a table showing the level of tariffs imposed by various countries on the US and the planned tariffs to be levied by the US, announcing the specific rates of his tariff plan. Among them, the equivalent tariff numbers facing several Southeast Asian countries were particularly shocking:

The US will impose a 46% equivalent tariff on Vietnamese exports, a 36% equivalent tariff on Thai exports, a 32% equivalent tariff on Indonesian exports, a 24% equivalent tariff on Malaysian exports, a 49% equivalent tariff on Cambodian exports...

These tariffs directly led to a sharp drop in many Southeast Asian currencies during the early trading hours in Asia. The Thai baht fell nearly 0.8% against the US dollar, while the Malaysian ringgit and Indonesian rupiah also weakened. Investors are now waiting to see if these countries will take any retaliatory actions, which may further escalate trade tensions.

"The region most affected by this tariff announcement is undoubtedly emerging markets in Asia," analysts Padhraic Garvey and Francesco Pesole from ING wrote in a client report.

Research firm Bespoke even commented that if any company had previously relocated its production lines from China to Vietnam, then congratulations — your equivalent tariff rate is now 46%.

In fact, Vietnam might be the most obvious example among the aforementioned Southeast Asian countries facing Trump's tariff pressure.

Last month, Vietnam's official government news website just released a statement announcing a reduction in import tariffs for products such as liquefied natural gas and automobiles — the tariff rate for some types of vehicles was reduced from a maximum of 64% to 32%, the rate for liquefied natural gas was reduced from 5% to 2%, and the ethanol rate was reduced from 10% to 5%. The import tariffs for agricultural products including fresh apples, frozen chicken, almonds, and cherries were also reduced.

However, even with these measures, Vietnam still became an object of Washington's strike.

According to statistics from the White House on tariffs and non-tariff barriers imposed by Vietnam on American goods, Vietnam will face a 46% equivalent tariff, one of the highest rates in Trump's tariff list on Wednesday.

Given that the US is Vietnam's largest export market, the new tariffs imposed by the US may significantly affect Vietnam's ambitious goal of increasing economic growth to at least 8% this year.

Ruchir Desai, a fund manager at Asia Frontier Capital based in Hong Kong, said, "If these tariffs persist, we may see a downward revision of Vietnam's GDP growth forecast. Given the importance of exports to Vietnam's economy, overall market sentiment will be negative."

Like other countries in Southeast Asia, Vietnam has been actively seeking investment from multinational companies in recent years, attempting to build a 'regional factory' in manufacturing from small commodities to basic semiconductors. Currently, Intel operates a chip assembly and testing plant in Ho Chi Minh City, and the country has also attracted the landing of giants like Apple and Samsung.

Last year, Vietnam's trade surplus with the US reached $123.5 billion, ranking third globally, only after China and Mexico.

Pham Luu Hung, chief economist at SSI Securities Corp., wrote in a research report that the equivalent tariffs "may disrupt global trade because supply chains and demand cannot be quickly adjusted in the short term." However, Hung expects that negotiations between Vietnam and the US may ease the tariffs and bring about "positive developments."

Currently, Vietnam plans to send another delegation led by Deputy Prime Minister Vu De Phuc to the US this weekend, with senior executives from several major domestic enterprises accompanying him. However, whether they can ultimately persuade Trump to cancel or reduce the equivalent tariffs remains uncertain.

Morgan Stanley economists stated that Trump's imposition of equivalent tariffs on Asia could have a greater drag on economic growth than during 2018-19. Given that most countries in the region have trade surpluses with the US, Asia is most vulnerable to tariffs.

Morgan Stanley economists said that the focus will be on whether these countries can negotiate agreements with the US to reduce tariffs. "The rise in policy uncertainty will dampen business confidence, thereby reducing capital expenditure and trade. We believe that the more trade-oriented an economy is, the greater the drag on economic growth caused by tariffs."

(Capital Securities Network, Xiao Xiang)

Original article: https://www.toutiao.com/article/7488913505937211938/

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