Global ratings agency S&P Global Ratings has issued a stark warning about the potential economic fallout of Donald Trump’s proposed higher tariffs, particularly for several Asia-Pacific economies. In its latest report, titled "Asia-Pacific Economies Likely To Be Hit By US Trade Tariffs," S&P highlighted that if Trump reintroduces or increases tariffs, some countries in the region—especially India, South Korea, and Thailand—could face significant economic risks.
Which Countries Are at the Highest Risk?
S&P’s analysis suggests that countries with strong trade ties to the US—such as Vietnam, Taiwan, Thailand, and South Korea—could see major disruptions in their export-driven industries. These nations rely heavily on US demand for their goods, and any increase in tariffs or trade restrictions could negatively impact their economic growth, foreign investment, and employment levels.
However, the report also noted that India and Japan are in a somewhat better position due to their more domestically driven economies. S&P explained that since these countries rely less on exports to the US and more on domestic consumption, they could cushion some of the blow from higher tariffs.
But that doesn’t mean they’re immune to economic retaliation.
Trump’s Tariff Plans: What’s at Stake?
Trump, who has already imposed an additional 10% tariff on Chinese imports and hiked duties on steel and aluminum to 25%, has made it clear that he intends to expand his trade war to other countries—including India, South Korea, and Thailand. The concern is that Washington sees some of these countries as having an unfair trade advantage, with higher tariffs on US goods than they themselves face when exporting to America.
S&P pointed out that while some of these tariff gaps do exist, the real uncertainty lies in how the US will calculate and justify retaliatory tariffs. The method of assessment could lead to very different policy actions—potentially benefiting some nations while disproportionately harming others.
Who’s the Most Vulnerable?
After analyzing tariff rates, trade balances, and economic dependencies, S&P found that India, South Korea, and Thailand are the most at risk.
- India tops the list due to its higher tariffs on US imports and its status as a major exporter of services and goods to the US. If Washington decides to escalate trade tensions, Indian pharmaceuticals, textiles, and IT services could face new challenges.
- South Korea, a key US trade partner, could also be hit hard. Industries like automobiles, steel, and electronics could suffer from higher tariffs on Korean exports.
- Thailand, which has benefitted from rising exports to the US, particularly in automotive parts and electronics, could also face setbacks if Washington targets it with new trade policies.
What Happens Next?
The report suggests that countries in the Asia-Pacific region should closely monitor Washington’s evolving trade policies and prepare for possible negotiations or countermeasures. While some larger economies like China and Japan may be able to withstand or negotiate exemptions, smaller and more trade-dependent nations may struggle to absorb the economic shock.
If Trump follows through with higher tariffs or stricter trade rules, it could disrupt global supply chains, raise consumer prices, and trigger economic slowdowns—not just in Asia, but across the world.
