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The US’s potential tariff hike under Trump threatens several Asian players other than China, including South Korea, Taiwan, and Vietnam, Goldman Sachs tells CNBC. The US bilateral trade deficit with China has somewhat decreased since the Trump administration; however, deficits with other Asian exporters have risen considerably and may face greater scrutiny, according to Andrew Tilton, Goldman Sachs’ chief Asia-Pacific economist.
India, Japan also at risk: “With Trump and some likely appointees focused on reducing bilateral deficits, there is a risk – in a sort of ‘whack-a-mole’ manner – burgeoning bilateral deficits could eventually prompt US tariffs on other Asian economies,” Tilton said. India and Japan, which run trade surpluses with the US, could also be at risk, he went on to say. Asian countries could attempt to lower existing trade surpluses with the US and “deflect attention” via various means, such as shifting imports to the US.
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Open economies should watch out: Trump’s proposed tariffs are expected to cause “greater pain” to more open economies in the region, with Taiwan being more vulnerable to this impact than Korea or Singapore, according to Barclay Bank economists. “We see Thailand and Malaysia in the middle, with Thailand estimated to take a slightly larger hit,” the note added.
Europe is also assessing how it can contain or counter the tariffs, CNBC reports. Economists warn that it remains uncertain whether Trump’s tariffs on Europe will be “as damaging as feared,” as noted by ING economists in a report last Friday, or if they will merely serve as “a bargaining chip designed to unlock wider foreign policy deals.” Nevertheless, there have been calls in Europe for the bloc to start preparing retaliatory actions, with the director of Germany’s Ifo Center for International Economics urging the EU to “strengthen their position through their own measures.”
Canada’s Montreal port lockout begins: Canada’s Maritime Employers Association (MEA) has declared a lockout at Montreal Port, after 99.7% of Montreal Longshoremen’s union members rejected a final offer made for a new labor contract, Reuters reported. The offer included a 3% salary increase per year over four years and a 3.5% increase over the two subsequent years. All longshoring at the port will be locked out effective last night, with only essential services unrelated to longshoring to continue.
REMEMBER- Unionized workers launched a strike last week at two Termont-run terminals at Montreal Port, which are responsible for handling 40% of the port’s container traffic.
The offer was rejected due to the MEA’s refusal to negotiate, says the union. “If the MEA had respected the collective bargaining process, solutions would have been found and a conflict at the Port of Montreal would have been avoided,” said union adviser Michel Murray in a statement cited by the newswire. The lockout is set to impact some 1.2k port workers and slow Canadian exports and imports. The port handled some 8.7 mn metric tons in 3Q 2024 alone.
