Flurry of trade deals offers relief for some Asian countries, while others wait

A staff member distributes an extra edition of the Yomiuri Shimbun newspaper reporting that President Donald Trump announced a trade framework with Japan on Tuesday, Wednesday, July 23, 2025, in Tokyo. (AP Photo/Eugene Hoshiko)

BANGKOK — U.S. President Donald Trump has announced trade deals with Japan and a handful of other Asian countries that will relieve some pressure on companies and consumers from sharply higher tariffs on their exports to the United States.

A deal with China is under negotiation, with U.S. Treasury Secretary Scott Bessent saying an Aug. 12 deadline might be postponed again to allow more time for talks.

Steep tariffs on U.S. imports of steel and aluminum remain, however, and many other countries, including South Korea and Thailand, have yet to clinch agreements. Overall, economists say the tariffs inevitably will dent growth in Asia and the world.

The deals reached so far, ahead of Trump’s Aug. 1 deadline

Trump and Japanese Prime Minister Shigeru Ishiba announced a deal Wednesday that will impose 15 per cent tariffs on U.S. imports from Japan, down from Trump’s proposed 25 per cent “reciprocal” tariffs.

It was a huge relief for automakers like Toyota Motor Corp. and Honda, whose shares jumped by double digits in Tokyo. Trump also announced trade deals with the Philippines and Indonesia.

After meeting with Philippine President Ferdinand Marcos, Jr., Trump said the import tax on products from his country would be subject to a 19 per cent tariff, down just one per cent from the earlier threat of a 20 per cent tariff.

Indonesia also will face a 19 per cent tariff, down from the 32 per cent rate Trump had recently said would apply, and it committed to eliminating nearly all of its trade barriers for imports of American goods.

Earlier, Trump announced that Vietnam’s exports would face a 20 per cent tariff, with double that rate for goods transshipped from China, though there has been no formal announcement.

Talks with China may be extended

Negotiations with China are subject to an Aug. 12 deadline, but it’s likely to be extended, Bessent told Fox Business on Tuesday. He said the two sides were due to hold another round of talks, this time in Sweden, early next week. Meanwhile, Trump said a trip to China may happen soon, hinting at efforts to stabilize U.S.-China trade relations.

A preliminary agreement announced in June paved the way for China to lift some restrictions on its exports of rare earths, minerals critical for high technology and other manufacturing. In May, the U.S. agreed to drop Trump’s 145 per cent tariff rate on Chinese goods to 30 per cent for 90 days, while China agreed to lower its 125 per cent rate on U.S. goods to 10 per cent.

The reprieve allowed companies more time to rush to try to beat the potentially higher tariffs, giving a boost to Chinese exports and alleviating some of the pressure on its manufacturing sector. But prolonged uncertainty over what Trump might do has left companies wary about committing to further investment in China.

No deals yet for South Korea and other Asian countries

Pressure is mounting on some countries in Asia and elsewhere as the Aug. 1 deadline for striking deals approaches.

Trump sent letters, posted on Truth Social, outlining higher tariffs some countries will face if they fail to reach agreements. He said they’d face even higher tariffs if they retaliate by raising their own import duties. South Korea’s is set at 25 per cent.

Imports from Myanmar and Laos would be taxed at 40 per cent, Cambodia and Thailand at 36 per cent, Serbia and Bangladesh at 35 per cent, South Africa and Bosnia and Herzegovina at 30 per cent and Kazakhstan, Malaysia and Tunisia at 25 per cent.

The status of talks with India remains unclear but progress appears to hinge on the country’s heavily protected farm sector. It faces a 26 per cent tariff.

Nearly every country has faced a minimum 10 per cent levy on goods entering the U.S. since April, on top of other sectoral levies.

Economists expect tariffs to sap growth even with trade deals

Even after Trump has pulled back from the harshest of his threatened tariffs, the onslaught of uncertainty and higher costs for both manufacturers and consumers has raised risks for the regional and global economy. Economists have been downgrading their estimates for growth in 2025 and beyond.

The Asian Development Bank said Wednesday it had cut its growth estimate for economies in developing Asia and the Pacific to 4.7 per cent in 2025 and 4.6 per cent in 2026, down 0.2 percentage points and 0.1 percentage points.

The outlook for the region could be further dimmed by an escalation of tariffs and trade friction, it said. “Other risks include conflicts and geopolitical tensions that could disrupt global supply chains and raise energy prices,” as well as a deterioration in China’s ailing property market.

Economists at AMRO were less optimistic, expecting growth for Southeast Asia and other major economies in Asia at 3.8 per cent in 2025 and 3.6 per cent next year.

While countries in the region have moved to protect their economies from Trump’s trade shock, they face significant uncertainties, said AMRO’s chief economist, Dong He.

“Uneven progress in tariff negotiations and the potential expansion of tariffs to additional products could further disrupt trade activities and weigh on growth for the region,” he said.

Elaine Kurtenbach, The Associated Press