Impact on Asian Economies
Trump’s proposed tariff policy, primarily aimed at China, will also have a profound impact across Asia. The administration had scheduled a universal tariff base rate of 10%, which was subject to increases as high as 60%.
These measures are expected to disrupt industries that are deeply interconnected across the continent, such as electronics and semiconductor manufacturing. Malaysia, which plays a major role in chip testing and packaging, has warned that U.S. tariffs on BRICS could disrupt the global supply chain of semiconductors, according to Reuters. Trade Minister Tengku Zafrul Aziz asserted that such tariffs would serve only to hurt the interests of both Malaysians and Americans.
The tariff increases, if imposed, could accelerate China’s shift to newer markets and offshore production. In Yiwu, a southern city that hosts some of the world’s largest wholesale markets, sales to the U.S. have already fallen because of the trade dispute. Chinese traders have started to diversify their markets, focusing more on the Middle East, Southeast Asia and other regions.
Today, 15% of Chinese exports go to the United States, compared with 19% in 2018. According to the Associated Press, a 60% tariff could prompt many firms to halt exporting and importing altogether. This might also trigger an exodus in other key sectors for the country, such as textiles and light manufacturing.
Effects on Global Supply Chains
Global supply chains are deeply interconnected, meaning that imposing tariffs on one country can have widespread and far-reaching ramifications on others. Malaysia’s concerns about potential U.S. tariffs on BRICS highlight the significant risk of disruptions in critical industries, particularly the semiconductor sector.
Malaysia accounts for about 13% of the global chip testing and packaging market, with significant investments by U.S. firms. Any disruption could set off a chain reaction, affecting industries around the world that depend on these essential components.
Impact on Asian American Communities
In the United States, this has meant social effects within Asian American communities based on Trump’s policies and rhetoric. His use of phrases like “Chinese Virus” as a term for COVID-19 has only increased anti-Asian perceptions and hate crimes. A study in The Diplomat pointed out that this kind of racially-motivated phrase contributed to the broad-based rise in violence against Asian Americans.
“No matter who they justify it [to], things like this targets our communities,” said UCLA math major Marco Zhao. “These words have real consequences, I’ve heard many stories of Asian stores and businesses getting targeted and disrupted because of this during and even after COVID.”
Groups such as Stop AAPI Hate pointed to the possible administration cabinet appointments because of their historical anti-Asian hate and racism. They even said that such appointments can be very dangerous to the safety and civil rights of Asian American and Pacific Islander communities.
Economic Implications for Asian Americans
The Asian-American workers in industries exposed to the international trade of the economy, such as the technology and manufacturing sector, would face job uncertainties caused by poor U.S.-Asia trade relations. According to the Wall Street Journal, the tariffs are expected to reduce demand for imports.
This decline could result in job losses in industries that depend on those imports, particularly among the millions of small businesses. The technology sector is heavily dependent on high-tech components manufactured across Asia. As a result, job losses in industries reliant on imports could exacerbate supply chain challenges and drive up costs. Therefore, there may be increased costs and supply chain issues.
The general economic slowdown caused by supply chain disruption would negatively impact global job opportunities. Small businesses, many of which are owned by Asian Americans and depend on imported goods, could face significant challenges due to high tariffs and disrupted supply chains.
“My parents run an import business,” said UCLA business major Angela Tran. “They’ve already had to scale back orders because of rising costs. If tariffs go up even more, they might have to sell more domestic goods.”
Visual Credit: Nancy My Tran, Staff Illustrator
