Trump Announces Trade Agreements with Japan and Other Asian Countries

BANGKOK (AP) — In a significant move affecting global trade dynamics, U.S. President Donald Trump has unveiled new trade deals with Japan and several other Asian nations, aimed at alleviating the burden of heightened tariffs on exports to the United States. This announcement comes amidst ongoing negotiations with China, where a deadline set for August 12 may see extensions to facilitate further discussions.

Progress on Tariff Reductions

The agreements brokered thus far have resulted in the adjustment of tariffs. Prime Minister Shigeru Ishiba of Japan and President Trump concluded a deal that will reduce the proposed 25% “reciprocal” tariffs on U.S. imports from Japan to 15%, providing much-needed relief for automotive giants like Toyota and Honda, whose stock prices surged following the announcement.

Similar concessions were made for the Philippines and Indonesia. For the Philippines, the import tax on products will be lowered to 19% from a threatened 20%. Indonesia will also benefit from a reduced tariff rate of 19%, down from an earlier proposed 32%, along with a commitment to eliminate most trade barriers on U.S. imports. Early reports indicate Vietnam’s exports could face a 20% tariff, with even higher rates for goods transshipped from China.

Ongoing Negotiations with China

While the trade deals offer some hope, negotiations with China remain a focal point. According to U.S. Treasury Secretary Scott Bessent, there is potential for the August 12 deadline to be extended, with discussions scheduled in Sweden for the upcoming week. Trump hinted at a possible visit to China, suggesting ongoing efforts to stabilize U.S.-China trade relations.

In June, a preliminary agreement allowed for some easing of restrictions on China’s exports of rare earth minerals, critical for high-tech manufacturing. The U.S. had also temporarily reduced tariffs on Chinese goods from 145% to 30%, while China reciprocated with a cut from 125% to 10%. However, the unpredictability surrounding these agreements has left many businesses hesitant about investing in China.

Future of Trade Relations in Asia

As the August 1 deadline approaches, many Asian countries, including South Korea, Thailand, and others, still face uncertainty regarding trade agreements. Trump has communicated via Truth Social that countries failing to strike deals may face steep tariffs, including a 25% rate for South Korea and a staggering 40% for imports from Myanmar and Laos.

Meanwhile, the status of negotiations with India remains ambiguous, primarily due to the country’s heavily protected agricultural sector, which currently faces a 26% tariff. Since April, nearly all countries have been subject to a minimum 10% levy on goods entering the U.S., in addition to sector-specific tariffs.

Economic Outlook Amid Tariff Challenges

Despite Trump’s adjustments to proposed tariffs, economists warn that ongoing uncertainty and increased costs for manufacturers and consumers are likely to impede both regional and global economic growth. Recent forecasts indicate a downgrade in growth estimates for countries in Asia, with the Asian Development Bank projecting an average growth rate of 4.7% for 2025 and 4.6% for 2026, reflecting a decrease of 0.2 percentage points and 0.1 percentage points, respectively.

Moreover, geopolitical tensions and the potential escalation of tariffs could disrupt global supply chains and exacerbate economic woes, particularly in light of China’s struggling property market. Economists at AMRO predict even more pessimistic growth rates of 3.8% in 2025 and 3.6% in 2026 for Southeast Asia and other major economies in the region.

As trade negotiations progress, the uneven advancement on tariffs may hinder regional trade activities, adding to the economic uncertainty faced by these nations. AMRO’s chief economist, Dong He, emphasized the potential for further disruptions in global trade dynamics as countries navigate these turbulent waters.