Latest news with #ISEASYusofIshakInstitute
CNA
10-07-2025
- Business
- CNA
Singapore still subject to 10% baseline tariff, DPM Gan to visit US later this month for talks
Singapore remains subject to a 10% baseline tariff, even as US President Donald Trump imposes steeper levies on other countries. Deputy Prime Minister Gan Kim Yong revealed that talks with Washington are ongoing, particularly over pharmaceutical trade. He added that tariffs are here to stay, and Singapore must be prepared for a longer period of uncertainty. Mr Gan also announced plans to visit the US this month. Nadirah Zaidi reports, while Ms Joanne Lin, senior fellow and coordinator at the ASEAN Studies Centre at the ISEAS–Yusof Ishak Institute, shares more about US tariffs on ASEAN member countries.
CNA
10-07-2025
- Business
- CNA
Singapore still subject to 10% baseline tariff, DPM Gan to visit US next month for talks
Singapore remains subject to a 10% baseline tariff, even as US President Donald Trump imposes steeper levies on other countries. Deputy Prime Minister Gan Kim Yong revealed that talks with Washington are ongoing, particularly over pharmaceutical trade. He added that tariffs are here to stay, and Singapore must be prepared for a longer period of uncertainty. Mr Gan also announced plans to visit the US this month. Nadirah Zaidi reports, while Ms Joanne Lin, senior fellow and coordinator at the ASEAN Studies Centre at the ISEAS–Yusof Ishak Institute, shares more about US tariffs on ASEAN member countries.
The Guardian
07-07-2025
- Business
- The Guardian
Is Trump tariff deal really a win for Vietnam – or a way of punishing China?
As news spread that Vietnam would become just the second nation to reach an initial tariff agreement with Washington, shares in the clothing companies and manufacturers that have a large footprint in the country rose with optimism. Just hours later though, they declined sharply, as it became clear that the devil would be in the detail, and the most striking part of the deal might in fact be aimed at Vietnam's powerful neighbour China. Dodging the severe levy of 46% that was threatened in April, Vietnam is instead facing a tariff of 20% for many goods, and in return US products coming into the country will have zero tariffs placed on them. However, a 40% tariff will remain for so-called transshipments – a provision that is aimed at Chinese companies accused of passing their products through Vietnam, or elsewhere, to avoid US tariffs. Businesses worry that 'transshipment' is a politicised term, and that if the US defines it too broadly, many goods could be unfairly targeted. 'Vietnam is a manufacturing hub – and as a hub you take inputs from other countries and make value-added stuff in Vietnam, and then export it to other countries,' says Dr Nguyen Khac Giang, visiting fellow at the ISEAS Yusof Ishak Institute. It is unrealistic, he adds, to expect most Vietnamese goods, other than agricultural products, would be made entirely in Vietnam. What remains to be decided is: what proportion of a product should be? How transshipments will be defined under the agreement – and how this policy will be enforced – remains to be seen, but it could have significant implications for global trade and tensions with China. 'One lesson for other countries is that the US intends to use these deals to apply pressure on China,' said Stephen Olson, a former US trade negotiator. Vietnam, a booming manufacturing hub, benefited during the last Trump administration when punishing tariffs placed on China prompted many Chinese companies to shift their supply chains. However, this caused the Vietnamese trade surplus with the US to surge, attracting US ire and allegations that Vietnam was wrongly acting as a conduit for Chinese companies wanting access to the US market. China's commerce ministry spokesperson He Yongqian responded to the US-Vietnam deal on Thursday stating: 'We firmly oppose any party reaching a deal at the expense of China's interests. If such a situation occurs, China will resolutely counter it to safeguard its legitimate rights and interests.' Vietnam's manufacturing industry is closely intertwined with both the US and China. US exports account for 30% of Vietnam's GDP, while China is Vietnam's top import source, relied on for raw materials used to make anything from footwear to furniture and electronics. Vietnam is not alone in relying on China for such components, especially across electronic sectors. '[China] is completely interwoven into global supply chains,' says Dan Martin, international business adviser at Dezan Shira and Associates, based in Hanoi. If companies are expected to prove the origin of all goods, this could place an unwelcome burden on those in sectors such as textiles where margins are low, says Martin. However, he cautions that it remains to be seen whether the higher 40% tariff on transshipments will be actively enforced. It is also possible that Vietnam could benefit if US policy encourages suppliers to set up shop in Vietnam, Martin adds. Businesses are largely pausing decisions until a clearer picture emerges, say analysts. Policymakers in Hanoi remain on a diplomatic tightrope. Vietnam has long sought to balance relations with Washington and Beijing. It considers the US not only a key export market but a security partner that serves as a counterbalance to China's assertiveness. However, if Beijing considers that Hanoi is helping Washington constrain it, this risks antagonising Vietnam's northern neighbour. It could lead to economic measures from China, or pressure over the disputed South China Sea, a major flashpoint in the region, says Peter Mumford, head of practice for south-east Asia at Eurasia Group. As things stand, 'aggressive retaliation' by Beijing against Hanoi is unlikely, he says: 'Hanoi may even have given Beijing a rough indication of the steps it would have to take to secure a US trade deal.' Vietnam has made efforts to show goodwill towards China over recent months, while also courting Trump. In exchange for the 20% tariff rate, Trump said Vietnam would open up its market to US goods. US-made SUVs, 'which do so well in the United States, will be a wonderful addition to the various product lines within Vietnam', said Trump. However the market for cars remains small in Vietnam, where city streets are famously crammed with millions of motorbikes.
The Diplomat
02-07-2025
- Business
- The Diplomat
ASEAN and the China-US Trade War
The Diplomat author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Sharon Seah – senior fellow and coordinator at the ASEAN Studies Centre, ISEAS Yusof Ishak Institute in Singapore – is the 468th in 'The Trans-Pacific View Insight Series.' Describe the regional vibe at the recent ASEAN Summit toward U.S. President Donald Trump's tariff threats. One of the greatest preoccupations of regional leaders since April 2, 2025 has been with the alarming levels of rising protectionism and disruptive actions seeking to undermine the open, free, multilateral trading system. Southeast Asia has benefited from an open, free, and fair global order for many decades since ASEAN countries' independence. An open and free global trading system, undergirded by robust and strong international law, has served small states well. Trade is ASEAN's lifeline. Without trade, ASEAN cannot maintain its relevance with the major partners. Because of these concerns, ASEAN leaders delivered a statement calling out unilateral and retaliatory actions that risk fragmenting the global economic order. They further instructed the officials to track the risks of trade diversions and engage in negotiations with partners, and also reiterated their commitment to maintaining open and secure trade flows and strengthening supply chain resilience. In the face of such volatility and uncertainty, accelerating ASEAN's regional economic integration has become a top priority agenda. This includes driving the negotiations for the ASEAN Digital Economy Framework, upgrading ASEAN's Trade in Goods Agreement, upgrading different ASEAN+ 1 FTAs to future proof and modernize these agreements, strengthening and increasing intra-ASEAN trade (which includes the removal of non-tariff barriers), and creating safety nets for the region's most vulnerable workers and industries. Analyze how Southeast Asian capitals are managing relations with Washington while concurrently balancing their countries' strategic position in the broader China-U.S. trade war. President Trump's tariffs are currently at the baseline of 10 percent, but the 90-day 'pause' on higher rates is set to expire by July 8. The tariffs are causing much anxiety in capitals around Southeast Asia. Some countries like Vietnam, Cambodia, and Laos – which are subject to some of the highest levels of tariffs – have yet to conclusively reach a settlement. The silver lining, at least at the time of response to this question, is that the U.S. has reportedly 'reached a deal' with China on the export of rare earth elements and continued acceptance of Chinese students in U.S. higher education institutions. Regional governments know enough, by now, not to take such news at face value. Anything can change overnight. Conventional knowledge tells us that if the U.S. is more or less happy with the Chinese deal, then perhaps the level of pressure and scrutiny on Southeast Asia would come down. One of the biggest issues under discussion is how Southeast Asia provides a backdoor for Chinese goods to flow through to the U.S. and how the region can help to stem this flow. But these are not conventional times, and everything is fair game to the current administration. With the U.S. now focusing on the Iran strikes and counter-responses, it's an open question whether there is bandwidth to conclude more trade deals with countries ahead of the July 8 deadline. With the distraction of the Iran-Israel conflict and potential for widening wars in the Middle East, it remains to be seen if President Trump would pay sufficient attention to the Pandora's box of tariffs. Examine how Southeast Asian countries are protecting specific industries and trans-shipment capabilities that advance their respective national interests. Export re-direction from China to Southeast Asia is a real concern. Many Southeast Asian economies are heavily export-oriented so having to deal with the double whammy of tariff imposition from one of their biggest markets (the U.S.) as well as re-direction from one of their biggest trading partners (China) is very challenging. It would mean that domestic manufacturing and export industries will be impacted. For example, the Cambodian garment industry's biggest export destination is the U.S. but with 49 percent tariffs, it would be difficult for exporters to bear the cost. In effect, the industry will see greater cancellation of orders because U.S. retailers would not be willing to bear this cost either. Identify supply chain risks and opportunities facing Southeast Asian companies amid China-U.S. trade tensions. Assuming that the U.S.-Iran conflict can be contained, there is currently the risk that the Strait of Hormuz, where much of Asia-Europe trade transits, could be blockaded. This is the most significant development that can disrupt trade flows and importantly the flow of essential goods such as LNG and petroleum to Asia. U.S.-China trade tensions, for the moment, will take a backseat to what is happening in the Middle East. As seen the last few times when the world experienced major blockages of waterways such as the Suez Canal, the business costs of diversifying access markets, halting production, manufacturing, and delaying deliveries are tremendously high. Southeast Asian companies have learned to diversify into different markets and looked for new suppliers that are geographically not reliant on open routes. It is also an opportunity for companies to invest in better R&D to create higher value goods in order to claim a place in the supply chains. Assess the geopolitical implications of ASEAN states' calculations in negotiating tariffs with Washington. Even if the conflict in the Middle East recedes, the environment for constructive negotiations on trade has deteriorated, as the recently concluded G-7 summit showed. The outlook therefore for future trade gatherings such as the G-20 in Seoul is dampened, especially if the U.S. representative is distracted and unwilling to negotiate. The question troubling many trading nations of the world is whether the rate of diminishing returns in pursuing the U.S. for economic deals is worthwhile or whether it would be better to deepen relations with other partners such as China, the EU, Japan, South Korea, etc. The chances of ASEAN leaders getting a meeting with President Trump at this year's ASEAN Summit or on invitation to Washington D.C. have diminished. In fact, from the announcement of Liberation Day tariffs, few world leaders have managed to speak to President Trump and even if they did secure something of a 'deal,' may find the terms changing over time. It would seem the better strategy is to build ASEAN's own economic resilience up by deepening integration, increasing intra-regional trade from the current levels of 22 percent, attracting greater FDI from nontraditional partners such as the Gulf states, and accelerating the adoption of ease of business schemes such as the ASEAN Single Window Plus (which is meant to link ASEAN countries' customs/border systems with those of its major trading partners to facilitate greater ease of transactions) and cross-border e-payment systems etc.
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Business Standard
30-04-2025
- Politics
- Business Standard
Vietnam marks 50 years since war's end with parade, message of peace
Vietnam celebrated the end of the war with the United States and the formation of its modern nation 50 years ago Wednesday with a military parade and a focus on a future of peace. Thousands camped overnight on the streets of Ho Chi Minh City once known as Saigon to watch the parade, drinking strong black coffee and their faces painted with the Vietnamese flag. The parade included a float that carried the Lac Bird, Vietnam's emblem, another carrying a portrait of Ho Chi Minh and finally one that represented 50 years of reunification between North and South Vietnam. Chinese, Laotian and Cambodian troops marched behind Vietnamese army formations, including some wearing uniforms similar to what was worn by northern Vietnamese troops during the war. Helicopters carrying the national flag and jets flew over the parade near Independence Palace, where the war ended when a North Vietnamese tank smashed through its gates. Sitting next to Vietnam's leader were Cambodia's former leader Hun Sen and Laotian Communist Party General Secretary Thongloun Sisoulith. Vietnam Communist Party General Secretary To Lam said the victory was a glorious landmark," ending a 30-year fight for independence and ending colonialism, and he gave credit to the former Soviet Union, China, Laos and Cambodia. We will have to respect the past and respect differences we are desperate to build a future for peace, (and) do everything we can do so the future generation can have a better world," he said. A change in emphasis The emphasis on reconciliation and not, like previous years, on military victory reflected how Vietnam was approaching the changing tides of the global economy and geopolitics today, said Nguyen Khac Giang, an analyst at Singapore's ISEASYusof Ishak Institute. He added that the Vietnam War remains central to how the Communist Party framed its legitimacy, not just as a military triumph but also as a symbol of national unity. But To Lam's comments underlined that the reconciliation remains unfinished. The war still defines Vietnam's unity, and its unresolved divides, Giang said. A time for peace Pham Ngoc Son is a 69-year-old veteran who was an army truck driver bringing troops and supplies from the north to the south through the Ho Chi Minh trail the secret route used by North Vietnam. He's on a weeklong tour of the city, which he remembers entering as a part of the northern troops that took over. He said he cherished those memories and couldn't describe the joy he felt at that moment. But now there was only space for peace and friendship" between the US and Vietnam. The war is over a long time ago," he said. Nguyen Thi Hue, a resident of Ho Chi Minh city, agreed. The war has ended and we shake hands (with the former enemy) for development. Now it's time for peace. Peace is the dream that everyone in the world wants, Hue said. A new relationship This year also marks the 30-year anniversary of diplomatic ties between Vietnam and the United States. In 2023, Vietnam upgraded its relations with the US to that of a comprehensive strategic partner, the highest diplomatic status it gives to any country and the same level of relations as China and Russia. Vietnamese officials insist that this relationship has been built on a bedrock of trust intrinsically linked to US efforts to address war legacies such as Agent Orange and unexploded bombs in the countryside that still threaten lives. The future of those projects is now at risk because of the Trump administration's broad cuts to USAID. Moreover, the export-dependent country is vulnerable in a global economy made fragile by US President Donald Trump's tariff plans. Who's took part in the parade? About 13,000 people, including troops, militias, veterans and local citizens, were taking part in the parade. The route follows the main boulevard leading to the Independence Palace before branching into city streets and will pass the US Consulate. A video of Chinese troops singing the iconic As If Uncle Ho Were With Us on Victory Day during a rehearsal was shared widely on social media. Chinese leader Xi Jinping had visited Vietnam earlier in the month in a bid to present the country as a force for stability in contrast with Trump. Close ties with Washington helped Vietnam balance its relations with its much larger and more powerful neighbour China, said Huong Le-Thu of the International Crisis Group think tank. Vietnam is among the countries involved in maritime disputes related to the South China Sea. Tariffs pose questions But the Trump administration's focus on tariffs Vietnam was slammed with reciprocal tariffs of 46 per cent, one of the highest puts a big question mark on what the US wants to achieve in Asia, she said. Focus on economic and not strategic competition may mean that Vietnam and other countries in Southeast Asia become less important for the US. It really will be shaping up (on) how the new administration sees the strategic picture in the Indo-Pacific and where countries like Vietnam would fit in, she said.
