In a dramatic reshaping of global economic policy, US President Donald Trump has unveiled a sweeping set of tariffs aimed at replacing free trade with what he calls “fair” trade. Announced on April 2, 2025, during a Rose Garden event at the White House titled “Make America Wealthy Again,” the measures include a universal 10 percent tariff on all goods entering the US and targeted “reciprocal” tariffs on over 60 trading partners. With Asian economies bearing the brunt of the highest rates—Cambodia at 49 percent and Vietnam at 46 percent—the policy threatens to ignite a global trade war, raising urgent questions about inflation, recession, and the future of international commerce.
Asia Hit Hardest by Reciprocal Tariffs
The new tariffs disproportionately target Asian nations, with Cambodia facing the steepest rate of 49 percent, followed by Vietnam at 46 percent, Thailand at 36 percent, and Indonesia and Taiwan at 32 percent each. Malaysia is hit with a 24 percent tariff, while the Philippines faces a relatively lower 17 percent. Even US allies and free trade agreement (FTA) partners in the region have not been spared. South Korea, despite over 99 percent of US exports entering duty-free under the US-Korea Free Trade Agreement since 2012, faces a 25 percent tariff. Japan, another key ally, is slapped with a 24 percent rate. 
Singapore, a close US ally and partner under the United States-Singapore Free Trade Agreement (USSFTA) since 2004, is also subject to the universal 10 percent tariff, a move that has surprised analysts given Singapore’s zero-tariff policy on qualifying US goods. Wendy Cutler, vice-president of the Asia Society Policy Institute and former acting deputy US trade representative, noted the unexpected burden on FTA partners. “Hitting Singapore, a close ally with an open economy, comes as a surprise” she said. She added that South Korea’s 25 percent rate was “unusually high” given the existing trade agreements.
Outside Asia, the European Union faces a 20 percent tariff, Australia a 10 percent rate, while Canada and Mexico are exempt from the reciprocal measures. India, which Trump has criticized for imposing high duties on US goods, faces a 26 percent tariff. These disparities highlight a policy that Trump claims addresses an “unfair” gap between US import duties and those levied by other nations on American products.
A Declaration of Economic Independence
Trump framed the tariffs as a historic step toward economic independence, declaring April 2, 2025, as the day “American industry was reborn” and “America’s destiny was reclaimed.” At the White House event, attended by Cabinet members, Congress representatives, and supporters of his Make America Great Again (MAGA) movement, he argued that foreign nations must “pay for the privilege of access to our market, the biggest market in the world.” He further claimed the tariffs were “kind” by charging approximately half of what other countries impose on US goods, though many trading partners are likely to disagree.
The universal 10 percent tariff on all imports will take effect at midnight on April 5, 2025 (12 noon on April 6, Singapore time), while the reciprocal tariffs will begin at midnight on April 9. US officials have stated that the reciprocal rates are calculated based on factors including a country’s tariff rates, value-added taxes, non-tariff barriers such as subsidies, and foreign exchange policies. Additional existing tariffs, such as 25 percent on steel, aluminum, and foreign cars, compound the economic pressure on trading partners.
Global Trade War on the Horizon?
The scale of Trump’s policy marks the most significant overhaul of the international trade order since the post-World War II era, a system the US itself helped establish. Analysts warn that retaliation from affected nations is almost inevitable, raising the specter of a global trade war. Cutler cautioned that trading partners “will not view these rates as ‘kind’ nor justified” and many will face domestic pressure to respond with their own measures. Such a tit-for-tat escalation could disrupt supply chains, increase costs for consumers, and destabilize global markets.
Historical parallels are being drawn to the Smoot-Hawley Tariff Act of 1930, which imposed 20 percent tariffs on most imports and is widely blamed for exacerbating the Great Depression. Economists today express similar concerns, warning that Trump’s tariffs could fuel inflation and potentially trigger a recession in the US and beyond. The strengthening of the US dollar, a likely outcome of reduced demand for foreign goods due to higher import costs, could further complicate the competitiveness of American exports.
Will Tariffs Revive US Manufacturing?
Trump has long argued that a lack of reciprocity in trade policies has led to a “large and persistent annual trade deficit” that has “gutted” US industries and “hollowed out” key workforces. He positions the tariffs as an incentive for foreign companies to relocate factories to the US, pointing to announcements of new investments worth hundreds of billions of dollars by large corporations. However, experts remain skeptical about the policy’s ability to achieve its stated goals.
Marcus Noland, a senior fellow at the Peterson Institute for International Economics in Washington, challenges the notion that tariffs will revitalize manufacturing. “The modeling work that I’ve done, examining various tariff proposals, does not show that revitalization of manufacturing occurring” he said. Instead, he predicts a shift of resources into non-tradable sectors like real estate, hotels, and retail, as the appreciating US dollar makes the country a high-cost location for production. “It will make it harder for the US to compete in internationally traded goods” he added.
Philip Luck, former Deputy Chief Economist at the State Department during the Biden administration, echoed this skepticism, noting that even if manufacturing returns, jobs may not follow. “The US is still the second-largest manufacturing economy in the world. But the problem is manufacturing is done by machines and automation. So we can bring back a lot of manufacturing, you’re not going to bring back a lot of jobs” he said. This disconnect between economic activity and employment raises questions about the broader social impact of Trump’s economic vision.
Impact on South East Asia and Beyond
For South East Asian nations, the tariffs represent a severe economic challenge. Vietnam, with a 46 percent reciprocal tariff on top of the universal 10 percent, faces significant hurdles given its export-driven economy, particularly in sectors like textiles and electronics. Thailand, at 36 percent, and Indonesia, at 32 percent, will also grapple with reduced access to the US market, potentially affecting millions of livelihoods tied to export industries. Smaller economies like Cambodia, burdened with the highest rate of 49 percent, may struggle most acutely, given their reliance on trade for economic growth.
Singapore, despite its relatively lower exposure at the universal 10 percent rate, is not immune. As a global trade hub, any disruption to international commerce could have ripple effects on its economy, which thrives on open markets and free trade agreements. The imposition of tariffs on FTA partners like Singapore and South Korea signals a broader shift away from multilateral trade frameworks, a trend that could undermine decades of economic cooperation in the region.
Uncertainty and the Road Ahead
As the world braces for the implementation of these tariffs, the potential for retaliatory measures looms large. Asian nations, already grappling with domestic economic pressures, may respond with their own tariffs or seek alternative markets, further fragmenting global trade networks. Economists warn that consumers on all sides will ultimately bear the cost through higher prices, while businesses face uncertainty in planning investments and supply chains.
Trump’s vision of making America “wealthy again” hinges on a fundamental reordering of economic relationships, but the risks of this gamble are profound. If the past is any guide, policies of this magnitude can have unintended consequences, from deepened economic inequality to geopolitical tensions. As the deadlines for these tariffs approach, the international community watches with bated breath, wondering whether this bold move will herald a new era of American prosperity or plunge the global economy into chaos.
