China tariffs are currently around 55% depending on the product line, with higher tariffs on the auto and steel sectors.
“On the surface, it seems contradictory that Vietnam—a principal destination for transshipped Chinese goods—would receive lower tariffs than other southeast Asian partners and South Korea, a former free trade partner,” said Mihir Torsekar, CPA’s senior economist. “But it reflects this Administration’s approach to negotiations: it’s in your interests to negotiate with us in good faith.”
How long these tariffs remain is a question. The letters, like the one sent to Malaysia seen above, do not suggest that these tariffs are open to be negotiated lower.
For instance, Malaysia tariffs will go to 25% on August 1, separate from any Section 232 tariffs they might face.
Meanwhile, tariffs on India and the European Union, currently at 10%, remain subject to higher rates in the days ahead.
The additional five non-Asian countries receiving Trump tariff letters yesterday were Bosnia and Herzegovina (set at 30%), Kazakhstan (set at 25%), Serbia (set at 35%), South Africa (set at 30%), and Tunisia (set at 25%).
White House press secretary Karoline Leavitt confirmed that 14 letters were sent out Monday, with even more set for the coming days. She also said that Trump would sign an executive order to delay the original July 9 expiration of the 90-day tariff pause until August 1.
These tariffs are part of the April 2 International Emergency Economic Powers Act (IEEPA). On May 28, the Court of International Trade (CIT) ruled that the IEPPA tariffs were unlawful, giving Customs and Border Protection 10 days to respond to the ruling.
On May 29, the U.S. Court of Appeals for the Federal Circuit issued a stay on the Court of International Trade’s ruling while the appellate court reviews the government’s emergency stay motion filed by the Trump administration. A final decision from that court is not expected until August 2025 at the earliest. Some chips in the tariff armor here should be expected.
Trump Raises Southeast Asia Tariffs to Match Vietnam, But Still Cheaper Than China
Tariffs on Southeast Asia will go up at least two-fold by August 1 from the current rate of 10%, based on screen-shot letters President Trump shared on his Truth Social account on Monday. As promised back in May shortly after the Geneva trade talks with China, Trump sent letters on Monday to predominantly Asian countries.
R.I.P. KORUS Free Trade Deal
Of particular note is the fact that the U.S.-Korea Free Trade Agreement (KORUS) has effectively ended, with South Korea now facing 25% tariffs. In his letters, which were nearly identical to all heads of state, Trump said that the tariff was “separate from all sectoral tariffs.” This means the Section 232 tariffs, which reportedly will not stack on top of the new tariff rate. If stacked, South Korean automotive would face 50% tariffs and South Korean steel would face 75% tariffs, a far cry from the now bygone KORUS era.
Hyundai’s decision to invest in automotive and steel in the U.S., announced in March, now looks prescient.
As expected, the new Asia tariffs are equal to and above the 20% rate on Vietnam – plus 40% for all goods transshipped from China. It is unclear how U.S. Customs will decipher this transshipment matter, but it is worth noting that out of all the Southeast Asian nations that have become an outpost for China multinationals and contract manufacturers, only Vietnam has been openly eager to strike a trade deal. Granting lower tariff rates to Vietnam’s neighbors would have enticed China and other global manufacturers to invest or outsource in nearby Southeast Asian countries—and show there is no real value to being first on the scene in trade negotiations with the Trump administration.
Vietnam, whose trade surplus with the U.S. beat that of China’s in May, currently has the lowest tariff rate in the region, though not by much.
The Tariff Letters
“It is a Great Honor for me to send you this letter…,” Trump began each letter dated July 7. The tariff rates for Asia are as follows:
Myanmar: 40%
Laos: 40%
Cambodia: 36%
Thailand: 36%
Bangladesh: 35%
Indonesia: 32%
Malaysia: 25%
South Korea: 25%
Japan: 25%
Vietnam: 20%
China tariffs are currently around 55% depending on the product line, with higher tariffs on the auto and steel sectors.
“On the surface, it seems contradictory that Vietnam—a principal destination for transshipped Chinese goods—would receive lower tariffs than other southeast Asian partners and South Korea, a former free trade partner,” said Mihir Torsekar, CPA’s senior economist. “But it reflects this Administration’s approach to negotiations: it’s in your interests to negotiate with us in good faith.”
How long these tariffs remain is a question. The letters, like the one sent to Malaysia seen above, do not suggest that these tariffs are open to be negotiated lower.
For instance, Malaysia tariffs will go to 25% on August 1, separate from any Section 232 tariffs they might face.
Meanwhile, tariffs on India and the European Union, currently at 10%, remain subject to higher rates in the days ahead.
The additional five non-Asian countries receiving Trump tariff letters yesterday were Bosnia and Herzegovina (set at 30%), Kazakhstan (set at 25%), Serbia (set at 35%), South Africa (set at 30%), and Tunisia (set at 25%).
White House press secretary Karoline Leavitt confirmed that 14 letters were sent out Monday, with even more set for the coming days. She also said that Trump would sign an executive order to delay the original July 9 expiration of the 90-day tariff pause until August 1.
These tariffs are part of the April 2 International Emergency Economic Powers Act (IEEPA). On May 28, the Court of International Trade (CIT) ruled that the IEPPA tariffs were unlawful, giving Customs and Border Protection 10 days to respond to the ruling.
On May 29, the U.S. Court of Appeals for the Federal Circuit issued a stay on the Court of International Trade’s ruling while the appellate court reviews the government’s emergency stay motion filed by the Trump administration. A final decision from that court is not expected until August 2025 at the earliest. Some chips in the tariff armor here should be expected.
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