Many Asian governments used threats from President Donald Trump as a pretext to enact unpopular but necessary free-market reforms. Yet mounting fallout from the Supreme Court’s tariff decision threatens to roll back progress across the region.
After “Liberation Day,” when Trump imposed double-digit tariffs on allies and adversaries, the leaders of export-dependent Asian countries rushed to strike new trade deals. To get lower tariff rates, they agreed to pry open their closed markets to allow in American beef, auto parts and crude oil. Now that Trump has imposed a baseline tariff of 15 percent, lower than what they negotiated bilaterally, some leaders feel buyer’s remorse.
Asian governments were already facing protests from farmers, labor unions and nationalists for giving up too much. Those criticisms have gotten louder since last Friday.
Leaders of India’s opposition Congress Party have faulted Prime Minister Narendra Modi for opening sensitive sectors of the agricultural market in exchange for an 18 percent tariff. Bowing to pressure, India has paused a trade delegation trip while it reassesses its commitment to move to a “zero barrier” status for almost all U.S. exports.
Vietnam is seeking clarity after promising to buy 90 Boeing jets and to adopt zero tariffs on most U.S. industrial and agricultural goods in exchange for getting a 20 percent tariff rate on its exports. In Thailand, the opposition People’s Party called the 19 percent tariff negotiated by the government “a diplomatic blunder.”
South Korean lawmakers had been dragging their feet on passing legislation to accept a deal with Trump that would lower its tariff rate to 15 percent, and the opposition is calling on them to halt proceedings.
“Almost all countries and corporations want to keep the deal that they already made — knowing that the legal power that I, as president, have to make a new deal could be far worse for them,” Trump said on Tuesday. “These countries are now happy, and so are we.”
The reality is messier. Trump has boasted about securing $18 trillion in foreign commitments to invest in America. If that money was ever going to materialize, which always seemed unlikely, it’s more of a pipe dream now.
The one country that’s gloating is China. Beijing refused to negotiate a trade deal with Trump in response to his tariffs, retaliating with its own levies and using its leverage over critical rare earth minerals to get the president to back down.
Trump now heads to Beijing at the end of March with a weaker negotiating hand. With the 15 percent worldwide tariff stacked onto sector-specific nonemergency tariffs — such as those on steel, aluminum, solar panels and electric vehicles — China’s effective average tariff rate has dropped from 32 percent to 24 percent in the wake of the Supreme Court’s decision, according to a Morgan Stanley analysis.
This all could have been avoided. To start, Trump might have relied on a more solid legal basis for imposing tariffs. He could have engaged in more traditional trade talks to make deals that are harder to unwind. Instead, the promise of liberalizing Asia’s tightly protected markets — a goal that has eluded presidents of both parties for decades — risks once again slipping away, which would be a shame on both sides of the Pacific.
The post Buyer’s remorse in Asia appeared first on Washington Post.
