South Korea, US, Japan arranging three-way talks at ASEAN meetings
The talks, if held, will take place among First Vice Foreign Minister Park Yoon-joo, US Secretary of State Marco Rubio and Japanese Foreign Minister Takeshi Iwaya, on the sidelines of multilateral meetings hosted by the Association of Southeast Asian Nations (ASEAN) in Kuala Lumpur.
The three sides were fine-tuning the details to hold the meeting, the sources said.
The talks would mark the first high-level meeting among the senior diplomats of the three countries since the launch of the Lee Jae Myung government in early June, underscoring their continued commitment to the trilateral partnership built under their previous governments.
The envisioned talks come as Seoul has been negotiating with Washington over steep US tariffs to avoid or minimise the impact on its key industries, a measure that has also been affecting Tokyo.
The talks would also come just days after South Korea's national security adviser, Wi Sung-lac, visited Washington earlier this week and held talks with Rubio, who doubles as the top security adviser, on the tariff measures and other alliance issues.
Wi said after his US trip that he suggested making efforts to facilitate a "mutually beneficial" deal and that Rubio had agreed with him.
On Tuesday, US President Donald Trump sent letters to Korea, Japan and other trading partners to notify them that the "reciprocal" tariffs will go into effect on August 1, an effective extension of the initial July 9 deadline following a 90-day pause.
At the envisioned talks, the three diplomats are also likely to discuss coordination on regional security issues, including the growing military ties between North Korea and Russia, Yonhap news agency reported.
The talks could also touch on China's growing assertiveness amid the intensifying rivalry with the US, possibly addressing the Taiwan Strait and other related issues.
Park would join the talks in place of the foreign minister, as the nomination procedure is still underway pending parliamentary confirmation.
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Hindustan Times
2 hours ago
- Hindustan Times
Who's feeling the pain of Trump's tariffs?
Editor's note (August 1st 2025): This article has been updated. Container ships are seen at the container terminal at Lianyungang port, in China's eastern Jiangsu province in the early morning on July 24, In the bygone age that was 2024, America charged levies averaging just 2% on its imports of goods. In the new era of trade wars, it now has an 'effective' tariff of over 16%, the highest since the 1930s (see chart 1). Rates look set to go even higher. On July 31st President Donald Trump signed an executive order that significantly raises tariffs on most of America's trading partners, with the increases due to go into effect on August 7th. Duties on most products from the European Union and South Korea, which recently struck deals with America, will rise to 15%. India faces a tariff of 25%; South Africa, 30%; Canada, 35%. As we published this, Mr Trump seemed inclined to extend America's tariff truce with China. But that still leaves the world's second-largest economy facing levies of around 40% on sales to the world's largest. Chart 1 Who pays for these tariffs, in all their infinite variety? Most economists reckon that ordinary Americans will lose out, as prices in shops rise. Mr Trump and his coterie, by contrast, blithely insist that the rest of the world will shoulder the load by cutting their selling prices. So far, the evidence is giving the know-nothings a glimmer of hope. Mr Trump's critics in the economics profession have history and research on their side. Studies show that when a country imposes duties on its imports, its foreign suppliers often keep their prices roughly the same. The tariff is layered on top. So it was during the first Trump administration, which slapped tariffs on China and others. A study from 2019 found 'complete pass-through of the tariffs into domestic prices of imported goods'. Some foreign firms are taking a similar stance in response to Mr Trump's new levies. In April Ferrari added up to 10% to the price of its cars. Britain's Ineos said it would charge more for its Grenadier off-roader. Canon, a camera-maker, has warned dealers to brace for price increases. But the broader pattern is more benign. There is, for example, surprisingly little evidence so far of tariff 'pass-through' into inflation. In June America's 'core' consumer prices (ie, excluding food and energy) rose by 0.2% on the previous month, below the consensus estimate of 0.3%. Economists have found some evidence of tariff-induced price rises—in car parts, for instance—but they have had to look harder for it than they had expected. What explains these surprising results? American firms, not consumers, may be paying for the trade war by accepting lower profits, suggests research by Deutsche Bank. Some firms also boosted inventories before the tariffs were implemented, allowing them to avoid raising their prices for now. America's foreign suppliers may also be sharing more of the load than they did in Mr Trump's first term. Nintendo, a Japanese electronics firm, is keeping the American price of the Switch 2 games console at $449.99. Many Chinese manufacturers seem prepared to follow Nintendo and absorb duties: Fuling, a supplier of cutlery, says its clients expect it to shoulder 'part of the increased tariff costs'. TIRTIR, a South Korean beauty brand popular with American Gen Zers, has signalled that it can absorb most of the tariffs. Games Workshop, a British manufacturer of war games, also seems resigned to taking the hit, warning investors that tariffs could reduce annual profits by £12m ($16m). 'We found tentative evidence that Korean auto exporters are shouldering the cost of higher US tariffs, at least for now,' wrote Kim Jin-Wook of Citigroup, a bank, in a recent note. The Bank of Japan tracks the prices of the country's car exports to America. In yen terms, they have fallen by 26% in the past year. Some of that decline may reflect exchange-rate movements. An unchanged dollar price brings in fewer yen when the American currency is weak. But that only raises another question: why are Japan's carmakers not raising their dollar prices more vigorously in response? More comprehensive data point in a similar direction. The Economist assembled a series on export prices from a number of America's largest trading partners, including Canada, Germany and South Korea. In the past exporters in these countries have been perfectly willing to raise prices: during the inflationary surge of 2021-22, they increased them by more than 15% over a 12-month span (see chart 2). Yet in the past year the average local-currency price of their exports has fallen by 3.6%. Nothing of the sort happened during Mr Trump's first trade war. Who-s-feeling-the-pain-of-Trump-s-tariffs- Some economists have noted a disconnect between what foreigners report and what American importers say they are paying. For instance, it is hard to find much evidence of plunging prices for Japanese car imports. Economists at Citi speculate that the time it takes to ship a foreign product to an American port may explain the puzzle. It 'implies a lag between falling export prices and when US import-price data would capture the decline', they say. Why might foreign suppliers be so forgiving? Some bosses worry more than before about the American consumer. With high inflation a recent memory, people already think that everything is too expensive. They have little tolerance for paying even higher prices. The opposite may be true of the foreign companies themselves. They are in a good financial position to withstand the tariffs. Aggregate margins of listed companies in emerging markets have become fatter over the past decade, increasing by over two percentage points. European firms have enjoyed similar gains. These companies can afford to take a small hit to profits, at least for now. Before long America's economy is likely to feel the pain of the trade war more acutely. Although some Chinese firms may have lowered their prices, these cuts are not nearly deep enough to offset the huge rise in tariffs they now face, points out Deutsche Bank's research. In addition, foreign companies that have borne the costs until now may not be able to bear them for ever—especially if tariff rates keep ratcheting up. The president loves defying his adversaries, in the economics profession and beyond. But he is always his own worst enemy. For more expert analysis of the biggest stories in economics,finance and markets, sign up to Money Talks, our weekly subscriber-only newsletter.
Mint
3 hours ago
- Mint
Centre scrambles to revamp export plan as US tariffs hit Indian goods, favour ASEAN rivals
New Delhi: Faced with steep tariffs imposed by the US government, the Centre is huddling with export promotion councils and manufacturers to find a way to rework the country's exports strategy, two government officials aware of the development said. The development comes on the back of a deadlock in bilateral trade agreement (BTA) negotiations between India and the US, which the two countries have been grappling with since June, as reported by Mint on 11 June. The new plan involves diversifying into markets such as the UK, with which India recently signed a free trade agreement (FTA), and the European Union (EU), where negotiations are in the final stage and a deal could be signed before the end of the year, the officials cited above said on the condition of anonymity. India's plan would also focus on sector-specific challenges and policy measures to support exports, including exploring new markets with the help of Indian missions overseas, the officials said. The government sees strong export potential in regions like Saudi Arabia, France, Vietnam, the Netherlands, Mexico, and Ethiopia, among other countries. The review will additionally focus on India's growing competitiveness gap with Bangladesh and with ASEAN countries such as Vietnam and Indonesia, which have received significant tariff relief under the latest US executive order. While India faces a 25% duty — just 1 percentage point down from 26% in the 2 April notification — Vietnam's tariffs have been reduced from 46% to 20%, Indonesia's from 32% to 19%, and Bangladesh's from 37% to 20%, giving these exporters a clear edge in the US market. 'Sectoral discussions will have special attention to cases like Vietnam, which imports Indian shrimp, processes it, and re-exports it to the US under a more favourable tariff, and Indonesia, which enjoys a lower duty on electronics exports," one of the officials said. 'Bangladesh, a major garments exporter, now benefits from a lower 20% rate compared to the 25% levied on Indian textiles." The meetings will also examine the implications of the new US rules on transshipment, which impose a 40% punitive duty on goods rerouted to evade tariffs, this person said. Queries sent to the commerce ministry, which is spearheading the consultations with industry, remained unanswered till press time. The tariffs explained On Thursday, the US imposed a 25% tariff on the value of all goods shipped from India that will come into effect on 7 August. To be sure, Indian goods will also attract existing MFN (most-favoured nation) duties, which average 3% but differ across sectors. Goods that are already on their way to the US and will reach ports there before 5 October will have to pay 10% duty. Further, certain sectors are exempted from the new 25% tariff, but they still have to pay the MFN duty. 'As of now, exports worth around $30 billion — comprising sectors like petrochemicals ($4 billion), pharmaceuticals ($15 billion), and electronic goods ($11 billion) — would not be impacted, as these are exempt from the additional duty," said the first among the two officials mentioned above. The first official added that sectors that are of concern are textiles (exports worth $10.91 billion), engineering goods ($19.16 billion), agriculture ($2.53 billion), gems and jewellery ($9.94 billion), leather ($948.47 million), marine products ($2.68 billion), and plastics ($1.92 billion). Notably, India exported goods worth $86.5 billion to the US in FY25, which is 20% of the country's total merchandise exports of $433.56 billion in FY25. Industry reactions According to the Global Trade Research Initiative (GTRI), a Delhi-based think tank, India's goods exports to the US may decline by 30% to $60.6 billion in FY2026. 'This order is more than just a tariff measure — it's a pressure tactic," said Ajay Srivastava, founder of GTRI, adding that the US is using access to its markets through tariffs as leverage to advance its geopolitical goals and extract one-sided trade concessions. 'Countries like China have retained exemptions on critical goods such as pharmaceuticals, semiconductors, and energy. But India has been singled out for harsher treatment, with no product-level exemptions whatsoever," Srivastava added. Tariffs on China have not been revised under the latest order and will continue at 30%. Vipul Shah, former chairman of the Gem & Jewellery Export Promotion Council (GJEPC), said the government should consider incentivising exporters, especially those heavily dependent on the US market, as the new tariffs are a significant blow to sectors like gems and jewellery. 'Immediate support is crucial to help these industries navigate the shock," he said. However, Ashwani Mahajan of the Swadeshi Jagran Manch, which opposes a one-sided trade deal, said India should not be overly worried about higher US tariffs, as the country is not as export-dependent as China. 'Work is already underway to diversify and explore new markets," he said. Mithileshwar Thakur, secretary general of the Apparel Export Promotion Council (AEPC), said the Indian apparel industry has an exposure of about 33% to the US market. He added that the FTA with the UK and ongoing FTA negotiations with the EU together can offer significant opportunities for the Indian apparel industry, and partly offset losses in US business. But, to tide over the current crisis, the government should offer incentive in the immediate term to the exporting community to stay afloat in the US market. 'It is unfortunate that India has been hit with the highest tariffs. This will definitely impact our competitiveness. We are in a wait-and-watch mode to see whether prices rise in the US market and if American buyers can absorb the increased costs or not," said Pankaj Chadha, chairman of Engineering Export Promotion Council (EEPC). Exploring newer markets For engineering goods, the government is focusing on expanding exports to new target markets such as Sao Tome, Macao, Georgia, Croatia, Guinea-Bissau, Belize, Azerbaijan, Myanmar, Lithuania, Norway, Somalia, and Greece. Currently, key export destinations for Indian engineering goods include the U.S., UAE, Saudi Arabia, Germany, and Italy. The Netherlands, South Korea, Belgium, Mexico, Japan, and Kuwait are also seen as promising markets. For pharmaceuticals, new destinations identified include Montenegro, South Sudan, Chad, Comoros, Brunei, Latvia, Ireland, Sweden, Haiti, and Ethiopia, while Greece is listed as a promising market. Traditional export markets for Indian drugs are— US, UK, Netherlands, South Africa, and Brazil. In electronics, the government has listed Sao Tome, Montenegro, Cayman Islands, St. Vincent, Mongolia, El Salvador, Turkmenistan, Honduras, Bahrain, Somalia, Puerto Rico, Vietnam, and Sweden as new export destinations. Russia, Mexico, and Turkey are marked as promising markets. For agricultural and processed food products, the focus will be on Nigeria, Switzerland, Lithuania, Slovenia, Mexico, Sweden, Portugal, Cameroon, Djibouti, Latvia, Egypt, Senegal, Canada, Argentina, and Brazil.
The Hindu
3 hours ago
- The Hindu
Nationalist agendas fuelled the border fight between Thailand and Cambodia
On the morning of July 24, Thai and Cambodian troops clashed at multiple locations along their 800-km border. Following five days of fighting that resulted in 43 deaths (including civilians) and the displacement of more than 300,000 people, both sides arrived at a ceasefire that took effect on July 29. Mediated by ASEAN chair Malaysia, with help from China, and under the looming threat of U.S. tariffs, the truce appeared to largely hold despite claims of breach by both parties. After the agreement came Cambodia's call on July 31 for the release of its 20 soldiers detained for crossing into Thai-held territory after the truce. Bangkok has acceded, but only upon the fulfilment of legal procedures — proof that the peace deal, despite putting a temporary halt to the fighting, is a minor respite at best. For the roots of the conflict can be traced back to pre-colonial times; and with domestic politics, international scam centres and nationalism coming to the mix, multiple interests are at stake, complicating matters further. Rise of tensions Prior to the latest clashes was the May 28 incident in which a Cambodian soldier was killed. Tensions ran high, forcing the then-Thai Prime Minister, Paetongtarn Shinawatra, to ring up strongman and Cambodia's former Premier Hun Sen on June 15 to placate the situation. As a leaked version of their conversation showed, Ms. Paetongtarn, whose family shares close ties with the Cambodian leader, sounded deferential by referring to him as 'uncle' and labelling a Thai military General as 'opponent'. The ensuing fallout, which cost Ms. Paetongtarn her job, is widely believed to have been orchestrated by Mr. Hun Sen to deflect attention from the international cyberscam centres operating in his country. Apart from inviting global scrutiny, these scam offices are also alleged to be run by the Cambodian government's allies and possess links to China — Phnom Penh's biggest benefactor. Another incentive for Mr. Hun Sen to stir the pot is to whip up nationalist sentiments and boost the credentials of his son Hun Manet, sworn to office in 2024, 33 years after his father relinquished power. For Mr. Hun Sen — who once called Ms. Paetongtarn's father and former Prime Minister Thaksin Shinawatra his 'god brother' — Thailand, with its delicate political landscape owing to the presence of the monarchy and the military, presents itself as a soft target. Separately, Mr. Hun Sen is also accused by his opponents of adopting a soft stance towards Vietnam, whose Army in 1979 overthrew the Khmer Rouge and installed the 72-year-old Cambodian People's Party in power. Also on Mr. Hun Sen's mind is the Thai government's proposed casino legalisation Bill, which may adversely impact Cambodia's gambling sector. Thus, bringing down the Shinawatras' Pheu Thai party is a one-stop solution to all his problems and seemed plausible too, given that, with Ms. Paetongtarn suspended from duty and Mr. Thaksin facinglese majestecharges for 'insulting the monarchy', the Shinawatras are already out of favour with the Thai citizens. Nationalist rhetoric However, nationalist rhetoric is not restricted to Cambodia alone but is an overarching sentiment in Thailand, too. A 2003 remark by a Thai actress, in which she said Cambodia had 'stolen' Angkor Wat and that she would not visit the country until the monument was returned, sparked anti-Thai riots. Taken in isolation, the statement may not carry much weight. But when placed in the larger context, it reflects the overall mood of a country, which, while priding itself as the only one in the region to be not subjected to Western colonisation, still perceives itself as a victim. This is because history has been equally unkind to both Cambodia and Thailand. Between the 7th century and the 14th century, the Khmer Empire ruled over a vast tract of the mainland in Southeast Asia. During its heyday in the 12th century, the Khmer empire comprised Cambodia as well as parts of present-day northeastern Thailand and southern Vietnam. The power structure was based on the Mandala system, which consisted of concentric circles of centre-peripheral relations. Weak territoriality and a loose central authority marked the setup, writes Path Kosal in a chapter in the book,Cambodia's Foreign Relations in Regional and Global Contexts. This ensured that Angkor kings were able to rule unchallenged over their allies and vassals who presided over the periphery independently. Trouble began to brew for the Khmer empire from the time of Angkor's fall in 1431. It faced threats from Siam (Thailand), which began conquering land from the northeast, and Annam (Vietnam) from the southeast; to the point that King Norodom turned Cambodia into a French protectorate in 1863 in the hope of security. While Cambodia's apprehensions of shrinking boundaries and constant threats have roots in pre-colonial times, Thailand's fears partially stem from the happenings that followed the establishment of the French protectorate. Though the multiple treaties signed between the French and Siamese in 1904 and 1907 serve as the bases for the present-day border between Cambodia and Thailand, many discrepancies exist to date; one of the prime examples being the tussle over the Preah Vihear temple — a 12th-century monument claimed by both countries. While the temple and a 1 sq. km area around it were ruled in Cambodia's favour by the International Court of Justice, a 4.6 sq. km patch near it is still contested territory. The verdict spurred a conflict between the two nations over the area in 2011, resulting in 28 casualties, including both military personnel and civilians. Preah Vihear is merely emblematic of the crisis. Similar temples, such as the Ta Moan Thom around which the latest shootout transpired, exist as bones of contention. The temples were built during the reign of the Khmer Empire. As is the case with empires, they rise and fall. And wars fought among the neighbouring kingdoms have seen the borders shift and temples change ownership. Like in many other conflicts, here too, the fire may have been lit during the time of conquests and colonialism. However, the nationalists and the ruling class of both countries – Cambodia has an authoritarian regime and Thailand's is a coup-prone establishment — have seen to it that the flames were fanned throughout history to suit them.
