Trump’s uniform 15% tariff could benefit parts of Asia-Pacific: Moody’s
In a note published Tuesday, the firm said economies such as China and parts of Southeast Asia would benefit most from a standardized tariff regime. In contrast, the impact on countries such as Japan, South Korea and Taiwan will be limited because current base tariff rates are already close to 15 percent.
Also Read: India withdraws refund, brings bigger bill to exporters
“There is a lot of uncertainty, but we do know a few things. A uniform tariff of 15 percent would benefit some Asia-Pacific economies that face much higher country-specific taxes,” the report said.
This development follows a recent decision by the US Supreme Court that overturned the Trump administration’s country-specific tariff structure. In response, Trump imposed a temporary 10 percent tariff on all imports for 150 days and plans to increase it to 15 percent. However, no official order or statement regarding the increase has been issued yet.
Moody’s stated that the court’s decision also creates uncertainty over ongoing trade arrangements, especially with India and Indonesia. “The court decision also raises questions about recent trade agreements with India and Indonesia. Important details such as the timeline for stopping India’s purchases of Russian oil and the volume of duty-free textile exports from Indonesia have not yet been finalized. India has postponed plans to send a delegation to Washington.”
The decision could also restrict Washington’s ability to use country-specific tariffs as a negotiating tool and potentially weaken its position in key discussions, including the upcoming meeting between Trump and Chinese President Xi Jinping.Also Read: US tariff change turns Indian exports into a trade conundrum
Despite the regulatory setback, Moody’s expects the administration to explore alternative mechanisms to raise tariffs. “We expect Trump to find other legal ways to raise tariffs, and we wouldn’t be surprised if U.S. tariffs approach pre-Friday levels. Some governments may move slowly on approving trade deals with the U.S., but we think they are unlikely to give up entirely for fear of inviting more punitive tariffs,” the report said.
Even if there were a more positive outcome – a stabilization of tariff levels below levels seen before February 20 – the report warns that uncertainty and operational disruptions to global trade will continue. Companies may also seek to recover previously paid tariffs; this is a process that Moody’s has flagged as potentially contentious and protracted.
“We could also see a new round of front-loading; if U.S. importers see the decision as a temporary reprieve, they could speed up shipments before tariff walls rise again. In short, the decision may provide momentary relief, but business and policymakers would be wise to keep the champagne on ice,” the report said.
