Goldman Sachs said Donald Trump’s victory in the US election has raised concerns about higher tariffs on China, but China may not be the only Asian country facing this dilemma.
Andrew Tilton, chief Asia-Pacific economist at Goldman Sachs, said in a recent report that although the U.S. bilateral trade deficit with China has declined since Trump took office, the deficit with other Asian exporters has increased significantly and may Under greater scrutiny.
“With Trump and some potential appointees focused on reducing bilateral deficits, there is a risk that, in a sort of ‘whack-a-mole’ sort of way, rapidly growing bilateral deficits could ultimately prompt the United States to Other Asian economies impose tariffs.
Tariffs are taxes levied on imported goods but not paid by the exporting country. As a result, U.S. tariffs will be paid by companies looking to import products into the country, raising their costs.
“South Korea, Taiwan and especially Vietnam have made huge trade gains relative to the United States,” Tilton said, adding that South Korea and Taiwan’s positions reflected their “privileged positions” in the semiconductor supply chain, while Vietnam’s Benefit from repositioning.
2023, South Korea’s trade surplus with the United States According to reports, the U.S. trade surplus reached a record $44.4 billion, the largest surplus of any country, with automobile exports accounting for almost 30% of total exports to the United States.
Taiwan’s exports to the United States In the first quarter of 2024, exports hit a record high, reaching US$24.6 billion, an annual increase of 57.9%. Among them, the largest export growth was in information technology and audio and video products.
at the same time, Vietnam’s trade surplus with the United States The amount for the January-September period was $90 billion.
Goldman Sachs said that India and Japan also have trade surpluses with the United States, with Japan’s surplus remaining relatively stable and India’s surplus growing slightly in recent years.
Tilton predicted that going forward, these Asian trading partners may try to reduce these surpluses and “divert attention” through various means, such as shifting imports to the United States where possible.
“Trade policy is likely to be the area where Trump will have the greatest impact on emerging markets in Asia during his second term as U.S. president,” analysts at Barclays wrote in a note on Friday.
World Bank economists led by Brian Tan wrote that Trump’s proposed tariffs are likely to cause “greater pain” to the region’s more open economies, with Taiwan more vulnerable than South Korea or Singapore. threaten.
“We believe Thailand and Malaysia are in the middle, with Thailand estimated to be slightly harder hit,” the report added.
US data shows U.S. trade deficit with China narrows From US$346.83 billion in 2016 to US$279.11 billion in 2023.
Former Indonesian Trade Minister Mari Pangastu said that although U.S. trade with China has decreased after the first Trump administration implemented tariffs, the trade volume has flowed to third countries such as Vietnam, Mexico, Indonesia and Taiwan. Last Thursday.
“But if you look at the supply chain, actually most of the parts still come from China. We call it extending the supply chain. So in Trump 2.0, two things will happen. He will start to notice that (the transactions) are still happening After Trump’s victory, she said at the Financial Times Commodities Summit in Singapore:
“This will enhance protection. Not only against China, but also against countries that have bilateral deficits with the United States,” Pangastu said.
Regardless of the tariffs, Goldman Sachs still expects pressure to shift some supply chains from China to Southeast Asia, particularly India or Mexico.
US President-elect Trump announced his intention to impose a package tariff of 10% to 20% on all imported products and impose additional tariffs of 60% to 100% on products imported from China. Goldman Sachs expects the United States to impose additional tariffs on Chinese products of an average of 20% in the first half of 2025.
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