Jonathan’s head
Corresponding to Southeast Asia
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Trump’s prices are a blow for countries like Vietnam which depend strongly on exports
The radical prices of American president Donald Trump targeting most of the world are now in force – and outside of China, no other region has been as hard as Southeast Asia.
Near the list are Vietnam and Cambodia that have been affected by some of the highest prices: 46% and 49%. Further on, Thailand (36%), Indonesia (32%) and Malaysia (24%). The Philippines obtain a rate of 17% and Singapore 10%.
This is a blow for a region that depends strongly on exports. Its widely admired economic development in the past three decades has been largely motivated by its success to sell its products to the rest of the world, especially in the United States.
Exports to the United States contribute 23% of Vietnam GDP and 67% of that of Cambodia.
This growth story is now in danger by the punitive measures imposed on Washington.
The longer term impact of these prices, assuming they will remain in place, will vary, but will certainly pose great challenges to the governments of Vietnam, Thailand and Cambodia in particular.
Vietnam’s “bamboo diplomacy”, where it is trying to be friends with everyone and balance links with China and the United States, will now be tested.
Under the leadership of the new secretary general of the Communist Party in LAM, Vietnam embarked on an ambitious plan to build an economy based on knowledge and high technology by 2045. It was targeting annual growth rates above 8%.
The more export to the United States, already its largest market, was at the heart of this plan.
This was also the main reason why Vietnam agreed to raise their relationship with that of a complete strategic partnership in 2023.
The Communist Party, which tolerates little dissent and has no formal political opposition, depends on its economic promises for its legitimacy. Already considered by many economists as too ambitious, they will now be even more difficult to meet.
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Vietnma leader in LAM aims for an annual growth rate of more than 8%
Thailand depends on American exports lower than those of Vietnam – less than 10% of GDP – but the Thai economy is in good shape, having underperform in the last decade. The Thai government is trying to find ways to raise economic growth, more recently, but which fails to legalize the game, and these prices are another economic blow that it cannot afford.
For Cambodia, prices may be the greatest political threat in the region.
Hun Manet’s government was just as authoritarian as that of his father Hun Sen, which he succeeded two years ago, but it is vulnerable.
Keeping the grip of the HUN family on power required to offer rival clans in Cambodia’s economic privileges such as monopolies or land concessions, but this has contributed to creating an overabundance of real estate developments, which are no longer sold and a mass of grievances on land expropriations.
The clothing sector, which employs 750,000 people, was a crucial social security valve, giving regular income to the poorest in Cambodia. Thousands of these jobs are now likely to be lost as a result of President Trump’s prices.
BBC / XIQING WANG
Exports to the United States represent 67% of Cambodia GDP
Unlike China, which retaliated with its own samples, the official message of governments in Southeast Asia, is not to panic, not to retaliate, but to negotiate.
Vietnam has sent the Vice-Prime Minister Ho Duc Pho to Washington to plead the case of his country and proposed to eliminate all prices on American imports. Thailand plans to send its Minister of Finance to make a similar call and has offered to reduce its prices and buy more American products, such as food and planes.
Malaysian Prime Minister Anwar Ibrahim will also go to Washington, although exports to the United States representing only 11% of Malaysia total, his country is less affected than some of its neighbors.
However, the Trump administration does not seem to be in mood to make compromises.
Peter Navarro, principal advisor to President Trump on trade and manufacturing and one of the main thinkers of the new policy, said in the interviews on Monday that Vietnam’s zero prices offer did not make sense, because it would not respond to the trade deficit where Vietnam sells $ 15 in the United States for every $ 1.
He accused Vietnam of keeping several non-pricing barriers to American imports and said that a third of all Vietnamese exports to the United States were in fact Chinese products, transmitted by Vietnam.
The proportion of Vietnamese exports carried out there or transmitted to avoid American prices on China is difficult to assess, but detailed business studies have put it between 7% and 16%, not a third.
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Asian actions have plunged this week while Trump prices
Like Vietnam, the Cambodia government has called in the United States to postpone prices while trying to negotiate.
The local American chamber of commerce has asked that the 49% prices be removed, arguing that the Cambodian clothing industry, the largest employer in the country, will be seriously affected, but that no price level, as high, will see clothing and the manufacture of shoes return to the United States.
The most perverse rate rate may be the 44% applied in Myanmar, a country mired in a civil war, which does not have the capacity to buy more American goods.
American exports represent only a small proportion of Myanmar GDP, less than 1%.
But as in Cambodia, this sector, mainly clothes, is one of the few who provides stable income to poor families in the cities of Myanmar.
In a supreme irony, Trump has so far been a popular figure in this region.
He was widely admired in Vietnam for his difficult and transactional approach to foreign policy, and the former strong man of Cambodia Hun Sen, always the main power behind the scenes, has long sought a close personal relationship with the American president, proudly displaying selfies with him during their first meeting in 2017.
Last month, last month, Cambodia congratulated Trump for closing the US Media Networks Voice of America and Radio Free Europe, which often brought the views of Cambodian dissidents.
Now, Cambodia, like so many of its neighbors, finds itself in a long line of supplicants to the supplier to facilitate their price load.
