DIGIVESTASI - The Donald Trump administration has the potential to bring negative impacts to many countries in Asia. His victory in the United States (U.S.) election has worsened the threat of high tariffs, not only targeting China but also other Asian countries. This was revealed in a recent analysis by Goldman Sachs. During his campaign, Trump outlined plans to increase tariffs on imports from China by 60%, and from other countries by 10% to 20%.

Although the U.S.-China bilateral trade deficit has slightly decreased under the Trump administration, the trade deficit between the U.S. and other Asian countries has sharply increased. This is expected to attract more attention from his administration.

Andrew Tilton, Chief Economist for Asia-Pacific at Goldman Sachs, said, "With Trump’s focus and some appointed officials on reducing the bilateral trade deficit, there is a risk that the continuing rise in deficits could trigger the imposition of U.S. tariffs on other Asian economies," as reported by CNBC International on Tuesday, November 12, 2024.

Import tariffs are taxes imposed on imported goods, which are not paid by the exporting country but by the companies wanting to import the products into the U.S., thereby raising their costs.

Tilton also noted that countries such as South Korea, Taiwan, and especially Vietnam have gained significant trade benefits with the U.S. South Korea and Taiwan are leaders in the semiconductor supply chain, while Vietnam has benefited from the trade shift that was previously concentrated in China.

In 2023, South Korea’s trade surplus with the U.S. reached a record $44.4 billion, the largest surplus with any country, with nearly 30% of its car exports going to the U.S. Taiwan also recorded its highest-ever exports in the first quarter of 2024, reaching $24.6 billion, a 57.9% increase from the previous year, driven by the information technology and audiovisual sectors.

Vietnam, in the period from January to September 2023, recorded a trade surplus with the U.S. of $90 billion.

Goldman Sachs also reported that India and Japan experienced trade surpluses with the U.S., with Japan’s surplus remaining stable and India’s surplus increasing moderately in recent years.

Tilton predicts that these trading partners in Asia may seek to reduce their surpluses with the U.S., possibly by redirecting imports to other countries if possible.

Barclays Bank analysts also warned that Trump’s trade policies will have a significant impact on the economies of open economies in the region, with Taiwan expected to be more vulnerable than South Korea or Singapore. Thailand and Malaysia are also expected to be affected, with Thailand experiencing slightly larger losses.

U.S. trade data shows that the trade deficit with China narrowed to $279.11 billion in 2023, down from $346.83 billion in 2016. While trade with China has shrunk after tariffs were imposed, the trade volume has shifted to third countries like Vietnam, Mexico, Taiwan, and Indonesia.

The impact on Indonesia itself is expected to be significant. According to Oxford Economics, as quoted by Al-Jazeera, non-China Asia is likely to see a decline in exports and imports by 8% and 3%, respectively, based on a conservative scenario of Trump’s policies. Analysts from the London School of Economics and Political Science also predict that Trump’s tariffs will result in a 0.68% drop in China’s GDP, which will cause a 0.03% decline in India’s GDP and a 0.06% decline in Indonesia’s GDP.

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