Historic Tariff Shocks: Key Geopolitical Insights for Southeast Asia Business
Summary
President Trump’s 2025 “national emergency” tariffs—tied to bilateral trade deficits—introduced sweeping duties that hit Vietnam (46%) and China (34%) especially hard.
This method echoes past episodes like the Smoot-Hawley Act (1930), Nixon’s 1971 surcharge, and the 2018–2020 U.S.-China clashes—each sparking retaliation, supply chain upheavals, and rising costs.
Economists widely reject targeting bilateral deficits alone, noting goods frequently pass through intermediary countries (e.g., Singapore, the Netherlands), complicating trade statistics.
Businesses face fast-changing tariffs, forcing expensive logistical pivots, sudden factory relocations, and elevated currency volatility (exemplified by the Thai baht’s recent drop).
Historical experience shows that broad, unilateral tariffs often trigger countermeasures, discourage investment, and distort global trade flows.
For companies, proactive strategies—supply chain diversification, rigorous hedging, and flexible contingency planning—reduce vulnerability to abrupt tariff shifts and uncertain policymaking.
