April 4, 2025 • 8 mins
Asia has been hit the hardest by Donald Trump's Liberation Day tariffs.
China was dealt reciprocal tariffs of 34% - on top of the 20% tariffs the US President had already issued.
Asia Business Correspondent Peter Lewis explains the impact it will have on trade.
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Speaker 1 (00:00):
Bright and Bridge Rich Asia has been hit the hardest
by Donald Trump's new terrorists. We've all heard that time
across to our Asia Business correspondent Peter Lost to check
the damage. Good evening, Good evening, Ryan Fara say this
is much worse for Asian economies than anyone was expecting.
What are people saying about it?
Speaker 2 (00:18):
Well, absolutely right, I mean Asia has been hit pretty
hard by this. I mean there's some standout things here.
First of all, China. China has been hit with the
so called reciprocal tariffs of thirty four percent, but bearing
in mind it was already facing tariffs of twenty percent
as a punishment for what Donald Trump says is its
(00:41):
role in the fentanyl crisis. So China in effect has
fifty four percent tariffs. That is really going to have
a huge impact on trade. China and America are the
biggest trading partners in the world. China's biggest export market
is the US, and the US's biggest important market is
(01:01):
from China. It's going to affect the Chinese economy for sure.
People are trying to work out by how much, but
some are saying it could shave a couple of percent
off GDP It's also going to have an effect on
the US, particularly the US consumer, because there is no
question that prices will have to go up. Those prices
(01:21):
are an effect paid at the border by the companies
that input it import into America. And they've only got
three options. Really. They either squeeze their suppliers or that's difficult.
Their companies like Walmart have been trying to do that
already with their Chinese suppliers, but some of the Chinese
suppliers already operating on wayferthin margins. The other option is
(01:43):
the companies themselves absorb the cost, or they put prices
up for the consumers. And it's the third one which
is the most likely. So this is going to put
up prices for US consumers and have a big impact
on inflation in the US. Now, there are some other
standard things as well, and that is the tariffs that
(02:03):
have been imposed upon some Southeast Asian Southeast Asian economies
like for example, Sri Lanka forty four percent, Cambodia forty
nine percent, Allowos forty eight percent. Now, I know there's
no such thing really as morality when it comes to
trade and economics, but what Trump is doing to these
(02:26):
countries is morally reprehensible in my view, because these levels
of tariffs will impose enormous damage on some of the
poorest nations in the world, some of these Asian and
African countries, I mean allawos. The GDP per capita is
about five hundred dollars a year, so that means the
(02:47):
average person earns under two dollars a day. And the
idea that somehow these countries can run trade trade death
sits with the US, in other words, buy more from
the US than it actually sells them, is just completely
bone headed. There's no chance that these countries can buy
(03:10):
the things that America produces, like nice shiny lexuses or iPhones,
or even the genes and the sneakers that companies like
Levi's and nik produce, which some of them are actually
produced in those very countries. All they can do is
watch enviously as they're shipped off to the US. So
this idea that somehow trade these trade deficits are all
(03:34):
down to tariffs and they can be remedied somehow by
tariffs on these porous nations in the world is just
a complete nonsense.
Speaker 1 (03:42):
Have we had any reaction from them at this point?
Speaker 2 (03:47):
Well, they're in a very very difficult position because first
of all, these countries are just not big enough to
be able to retaliate and react. And also what can
they retaliate. There aren't enough dollar per dollar imports into
the country that it can retaliate on. All they can
(04:09):
do is plead with the US, which some countries are of.
Vietnam is doing that. It's asked for the US to
suspend the tariffs because it's going to do enormous damage
to them. But the reason why the US runs trade
deficits with these countries is not because of tariffs. It's
because the American typical consumer, typical household borrows, doesn't save
(04:36):
en US so as a result, they have to go
and borrow. They have to go and borrow to invest
in new facilities and factories, they have to borrow to
finance their consumption. And they have this enormously lucky privilege
that they can borrow in their own currency, the US dollar,
because the US dollar is the world's reserve currency, so
other countries do need dollars. So the way it works is,
(04:58):
of course they run trade efficits. Other countries sell their products,
receive US dollars in return, which they then go and
invest in US treasuries, which helps America actually go and
borrow the money that it needs to finance itself. And
if Donald Trump really wants to bring that system down,
which has been operating for decades and has allowed America
(05:21):
for decades to live way beyond its means, there are
going to be some serious consequences for that, not just
for these countries but also for the US itself.
Speaker 1 (05:31):
What about Japan, Their teriff right was twenty four percent.
I saw the Prime Minister coming out and saying it's
a national crisis.
Speaker 2 (05:39):
Yes, well, in some ways, you know, this is very
disappointing for Japan because Prime Minister is well, first of all,
the country has lower tariffs than the US does, so
you would think that somehow they will be exempt from this.
And Prime Minister Asheba has invested a lot of time
and political capital going to the US meets with Donald
(06:01):
Trump in the hope of getting exemptions and instead he
gets hit with tariffs of twenty four percent. So this
is a political crisis for part Prime Minister Sheba in
terms of what does he do now, how does he
respond it's an economic problem because Japan is a huge exporter.
You know, it relies its biggest companies rely on exporting,
(06:24):
and also its biggest companies have invested heavily in the US.
Japan is the biggest investor of any country in the
world in the US. Companies like Toyota Honda have big
plants and factories in the US. So you know, this
is a big problem for Japan and that's why we're
(06:44):
seeing their markets being hit very badly. Yesterday, the ni
K two two five was down four percent. It's down
heavily again because that index consists of the country's biggest exporters.
So is right, it is in many ways an economic
crisis as well as a political crisis.
Speaker 1 (07:01):
For him, Peter, what about readerriction? Are there any other
countries who will take the goods that these guys are
producing that you know are obviously going to be slept
with terrorists, which will make them more expensive, which will
mean the American consumers will buy list of them, which
will mean they'll have you know, exists, or either they
won't produce them, or if they do, they'll need to
sell them somewhere else.
Speaker 2 (07:23):
Well, this is what some people are suggesting. What some
people are suggesting is countries like China, for example, don't
react by slapping more tariffs on US goods. What they
should do, and what they have been doing, is looking
for new markets. I mean, at the end of the day,
the USA is about fifteen percent of global trade, so
that means the other eighty five percent consistent countries who
(07:45):
could trade with each other. And China has been actively
sourcing new markets in the Middle East and Southeast Asia,
in the Global South, and other countries should try and
do that as well. And this is the suggestion and
in fact what you do here as you forget about
the US, although it's a big market, if you really
can't trade or trade without huge tariffs, which means you
(08:09):
won't be able to sell your goods anyway, let's try
and do it amongst ourselves elsewhere. And some of these
economies are growing very fast, in Southeast Asian economies, you know,
some of the fastest growing economies in the world. So
this is where trade could be developed and America be
cut out of the global trading system in effect.
Speaker 1 (08:29):
Peter, thanks for that wrap up. Peter lewis that Asia
Business correspondent. For more from Hither Duplessy Alan Drive, listen
live to News Talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
Bright and Bridge Rich Asia has been hit the hardest
by Donald Trump's new terrorists. We've all heard that time
across to our Asia Business correspondent Peter Lost to check
the damage. Good evening, Good evening, Ryan Fara say this
is much worse for Asian economies than anyone was expecting.
What are people saying about it?
Speaker 2 (00:18):
Well, absolutely right, I mean Asia has been hit pretty
hard by this. I mean there's some standout things here.
First of all, China. China has been hit with the
so called reciprocal tariffs of thirty four percent, but bearing
in mind it was already facing tariffs of twenty percent
as a punishment for what Donald Trump says is its
(00:41):
role in the fentanyl crisis. So China in effect has
fifty four percent tariffs. That is really going to have
a huge impact on trade. China and America are the
biggest trading partners in the world. China's biggest export market
is the US, and the US's biggest important market is
(01:01):
from China. It's going to affect the Chinese economy for sure.
People are trying to work out by how much, but
some are saying it could shave a couple of percent
off GDP It's also going to have an effect on
the US, particularly the US consumer, because there is no
question that prices will have to go up. Those prices
(01:21):
are an effect paid at the border by the companies
that input it import into America. And they've only got
three options. Really. They either squeeze their suppliers or that's difficult.
Their companies like Walmart have been trying to do that
already with their Chinese suppliers, but some of the Chinese
suppliers already operating on wayferthin margins. The other option is
(01:43):
the companies themselves absorb the cost, or they put prices
up for the consumers. And it's the third one which
is the most likely. So this is going to put
up prices for US consumers and have a big impact
on inflation in the US. Now, there are some other
standard things as well, and that is the tariffs that
(02:03):
have been imposed upon some Southeast Asian Southeast Asian economies
like for example, Sri Lanka forty four percent, Cambodia forty
nine percent, Allowos forty eight percent. Now, I know there's
no such thing really as morality when it comes to
trade and economics, but what Trump is doing to these
(02:26):
countries is morally reprehensible in my view, because these levels
of tariffs will impose enormous damage on some of the
poorest nations in the world, some of these Asian and
African countries, I mean allawos. The GDP per capita is
about five hundred dollars a year, so that means the
(02:47):
average person earns under two dollars a day. And the
idea that somehow these countries can run trade trade death
sits with the US, in other words, buy more from
the US than it actually sells them, is just completely
bone headed. There's no chance that these countries can buy
(03:10):
the things that America produces, like nice shiny lexuses or iPhones,
or even the genes and the sneakers that companies like
Levi's and nik produce, which some of them are actually
produced in those very countries. All they can do is
watch enviously as they're shipped off to the US. So
this idea that somehow trade these trade deficits are all
(03:34):
down to tariffs and they can be remedied somehow by
tariffs on these porous nations in the world is just
a complete nonsense.
Speaker 1 (03:42):
Have we had any reaction from them at this point?
Speaker 2 (03:47):
Well, they're in a very very difficult position because first
of all, these countries are just not big enough to
be able to retaliate and react. And also what can
they retaliate. There aren't enough dollar per dollar imports into
the country that it can retaliate on. All they can
(04:09):
do is plead with the US, which some countries are of.
Vietnam is doing that. It's asked for the US to
suspend the tariffs because it's going to do enormous damage
to them. But the reason why the US runs trade
deficits with these countries is not because of tariffs. It's
because the American typical consumer, typical household borrows, doesn't save
(04:36):
en US so as a result, they have to go
and borrow. They have to go and borrow to invest
in new facilities and factories, they have to borrow to
finance their consumption. And they have this enormously lucky privilege
that they can borrow in their own currency, the US dollar,
because the US dollar is the world's reserve currency, so
other countries do need dollars. So the way it works is,
(04:58):
of course they run trade efficits. Other countries sell their products,
receive US dollars in return, which they then go and
invest in US treasuries, which helps America actually go and
borrow the money that it needs to finance itself. And
if Donald Trump really wants to bring that system down,
which has been operating for decades and has allowed America
(05:21):
for decades to live way beyond its means, there are
going to be some serious consequences for that, not just
for these countries but also for the US itself.
Speaker 1 (05:31):
What about Japan, Their teriff right was twenty four percent.
I saw the Prime Minister coming out and saying it's
a national crisis.
Speaker 2 (05:39):
Yes, well, in some ways, you know, this is very
disappointing for Japan because Prime Minister is well, first of all,
the country has lower tariffs than the US does, so
you would think that somehow they will be exempt from this.
And Prime Minister Asheba has invested a lot of time
and political capital going to the US meets with Donald
(06:01):
Trump in the hope of getting exemptions and instead he
gets hit with tariffs of twenty four percent. So this
is a political crisis for part Prime Minister Sheba in
terms of what does he do now, how does he
respond it's an economic problem because Japan is a huge exporter.
You know, it relies its biggest companies rely on exporting,
(06:24):
and also its biggest companies have invested heavily in the US.
Japan is the biggest investor of any country in the
world in the US. Companies like Toyota Honda have big
plants and factories in the US. So you know, this
is a big problem for Japan and that's why we're
(06:44):
seeing their markets being hit very badly. Yesterday, the ni
K two two five was down four percent. It's down
heavily again because that index consists of the country's biggest exporters.
So is right, it is in many ways an economic
crisis as well as a political crisis.
Speaker 1 (07:01):
For him, Peter, what about readerriction? Are there any other
countries who will take the goods that these guys are
producing that you know are obviously going to be slept
with terrorists, which will make them more expensive, which will
mean the American consumers will buy list of them, which
will mean they'll have you know, exists, or either they
won't produce them, or if they do, they'll need to
sell them somewhere else.
Speaker 2 (07:23):
Well, this is what some people are suggesting. What some
people are suggesting is countries like China, for example, don't
react by slapping more tariffs on US goods. What they
should do, and what they have been doing, is looking
for new markets. I mean, at the end of the day,
the USA is about fifteen percent of global trade, so
that means the other eighty five percent consistent countries who
(07:45):
could trade with each other. And China has been actively
sourcing new markets in the Middle East and Southeast Asia,
in the Global South, and other countries should try and
do that as well. And this is the suggestion and
in fact what you do here as you forget about
the US, although it's a big market, if you really
can't trade or trade without huge tariffs, which means you
(08:09):
won't be able to sell your goods anyway, let's try
and do it amongst ourselves elsewhere. And some of these
economies are growing very fast, in Southeast Asian economies, you know,
some of the fastest growing economies in the world. So
this is where trade could be developed and America be
cut out of the global trading system in effect.
Speaker 1 (08:29):
Peter, thanks for that wrap up. Peter lewis that Asia
Business correspondent. For more from Hither Duplessy Alan Drive, listen
live to News Talks. It'd be from four pm weekdays,
or follow the podcast on iHeartRadio
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