In a world disrupted by ‘Maga economics', all bets are off
The tariff rate for exports from the Philippines to the US is reportedly
down to 19 per cent . However, one Filipino lawmaker says it's effectively 6 per cent. The rate for Indonesia is now 19 per cent and for Vietnam 20 per cent. Hours before the deadline, Malaysian and Thai leaders seemed to be on the cusp of reaching deals with the US. Meanwhile, Laos is bracing for stiff tariffs of up to 40 per cent.
This is 'Make America Great Again' (Maga) economics in a nutshell. Washington has traded in a multilateral approach to hegemony for a 'divide and conquer' strategy that makes smaller economies compete against each other for the superpower's favour. Against the largest importer in the world, small exporters have no cards,
as Trump might say
As governments scramble to negotiate deals, businesses may have to close entire factories or shift to countries with lower tariffs. If current profit margins are too thin, higher tariff rates are likely to put further stress on the cost of doing business.
Vietnam, Cambodia and Bangladesh emerged as big winners from the first phase of the
US-China trade war in the late 2010s. But on April 1, Trump announced tariffs of 46 per cent on Vietnam, 49 per cent on Cambodia and 37 per cent on Bangladesh. Trump has now basically equalised tariffs – Cambodia will face tariffs of 19 per cent, and
Vietnam and Bangladesh 20 per cent.
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