In recent weeks, the global trade landscape has been significantly impacted by U.S. President Donald Trump’s “Liberation Day” tariffs, which have targeted numerous countries, including those in the Association of Southeast Asian Nations (ASEAN) and China. Each country has reacted differently based on its economic relationship with the U.S., local industry concerns, and geopolitical considerations.
In this tenth day digest following Liberation Day, we summarise key developments and positions adopted by ASEAN members and China thus far, as two of the biggest trading partners of the U.S.
*Infographic illustrating generally Liberation Day tariffs and 90-day reprieve, product-specific and existing tariffs excepted. For more information, please refer to Reed Smith’s Trump 2.0 tariff tracker.
ASEAN
ASEAN, as a bloc, is currently broadly united in its diplomatic approach, rather than opting for a more aggressive retaliatory stance. In a joint statement on 10 April 2025, ASEAN ministers emphasized the importance of “frank and constructive dialogue” with the U.S. to address trade concerns through an enhanced forward-looking ASEAN-U.S. economic cooperation framework.
A 90-day reprieve was announced on 9 April 2025 which provides for all U.S. trading partners to drop to the baseline 10% tariffs, with the notable exception of China.
Prior to this 90-day reprieve, ASEAN members’ responses are summarised below:
- Cambodia (49%): Faced with one of the highest tariffs among ASEAN nations prior to the 90-day reprieve, Cambodia is actively seeking to negotiate tariff exemptions and to diversify its export markets to minimize risks associated with U.S. trade policies. In 2024, U.S. exports accounted for around 38% of the country’s total exports, according to Cambodian trade statistics. As of 10 April 2025, the U.S. has agreed to Cambodia’s proposal to begin negotiations on tariffs.
- Laos (48%): Focused on solidarity within the ASEAN framework to address the challenges posed by the tariffs. Laos is likewise evaluating the tariffs’ impact on trade agreements and looking at diversifying its export markets.
- Vietnam (46%): Like other ASEAN members, Vietnam has engaged in diplomatic efforts rather than retaliation. The U.S. is the biggest export market for Vietnam, and the two countries had on 10 April 2025 opened discussions on a reciprocal trade agreement.
- Myanmar (44%): Appears to be more cautious likely due to ongoing economic and political challenges. The government has called for collaboration within ASEAN to navigate the tariffs’ implications.
- Thailand (36%): Thailand has yet to announce specific retaliatory measures and is presently part of ASEAN’s collective diplomatic approach. Thailand is working to stabilize the key affected sectors, such as automotive and agriculture, through domestic support and regional trade agreements, particularly within ASEAN. Prime Minister Paetongtarn Shinawatra on 8 April 2025 said a meeting between Thailand and the US Trade Representative had been confirmed.
- Indonesia (32%): Indonesia has likewise not announced retaliatory measures but likely to engage in diplomatic efforts alongside other ASEAN members. On 8 April 2025, Indonesia announced concessions, such as lowering import taxes on electronics and steel, and is preparing to send a high-level delegation to the U.S. on 17 April 2025 to negotiate.
- Brunei (24%): Brunei largely maintained a diplomatic stance, emphasizing the need for multilateral trade agreements. On 3 April 2025, the Ministry of Finance and Economy of Brunei announced that it would engage with its U.S. counterparts to seek clarification on the new tariff regime and continue supporting affected exporters.
- Malaysia (24%): Reacted decisively by engaging in bilateral and multilateral talks aimed at reducing the impact of the tariffs on its economy. Malaysia hosted the Special ASEAN Economic Ministers’ Meeting on 10 April 2025 where the ASEAN countries made the decision not to retaliate. The government has assessed industries vulnerable to the tariffs, specifically electronics and palm oil, and exploring diversification of trade arrangements.
- Philippines (17%): Philippines is exploring opportunities and pursuing free trade agreements with other countries. As of 8 April 2025, the government has sought a united front with other ASEAN members to respond to the U.S.
- Singapore (10%): While subject to baseline tariff of 10%, the lowest among ASEAN countries, Singapore observed that it actually runs a trade deficit with the U.S. Singapore’s present position is that it will not impose retaliatory tariffs, but urge diplomacy with the U.S. together with other ASEAN countries.
China
China expressed grave concern and has taken a more assertive stance against the U.S. tariffs, reflecting differing economic, political and even cultural dynamics. While the U.S. has increased tariffs on Chinese imports by up to 125%, China has imposed additional retaliatory tariffs of 125% on U.S. goods. Various other measures have been put forth, including complaints filed with the World Trade Organisation (WTO), implementing export controls on certain heavy rare earths, adding certain U.S. entities on the Export Control List and the Unreliable Entity List, and suspending the qualification of some U.S. entities to export soybeans to China. China has expressed its willingness to engage in talks with the U.S., but any such talks must be based on mutual respect and equality.
The Hong Kong government expressed its strong disapproval and dismay regarding the U.S. tariffs. In response to these tariffs, the government introduced various enhanced measures aimed at supporting the export trade in Hong Kong and assisting enterprises in accelerating their expansion into new markets to navigate the current circumstances. Furthermore, the Hong Kong Government asserted that it will continue to evaluate the measures imposed by the U.S., which it views as inconsistent with fair trade principles, and intends to take appropriate actions to defend Hong Kong’s interests, including filing a complaint in accordance with the WTO dispute settlement mechanism.
What lies ahead?
Against this varied backdrop, businesses operating in Asia would be wise to re-examine their supply chain and customer base. Of immediate relevance would be questions raised on:
- Origins: Determining the Country of Origin (COO) is a fundamental step in customs compliance and along with other factors will determine the applicable tariff to be applied to imported products. How and to what extent are products subject to the new U.S. tariffs? This can be a particularly complex analysis in instances where product components come from various origin countries of differing tariffs and assembled in a jurisdiction faced with yet a different tariff. It is likely that under current circumstances, U.S. Custom and Border Protection (CBP) will be undertaking a deeper examination of COO declarations for products imported into the U.S. Determining the COO early and basing that determination on factual information will help ensure that the product remains compliant with CBP import rules and regulations.
- Pricing: We are increasingly seeing commodities counterparties dealing with the implications of the latest round of tariffs, in particular those levied by the U.S. and China on each other’s commodities. Sale and purchase agreements for commodities often contain price adjustment clauses that give parties the right to renegotiate pricing terms upon the occurrence of certain events. The imposition of tariffs, duties and other events (geopolitical or otherwise) which may materially affect commodity pricing indexes are often including as trigger events to price adjustment clauses. Counterparties must then seek to negotiate alternative pricing that is feasible for both parties or face termination of their agreements. As a result of recent tariffs and rather unsurprisingly, we are seeing that the spot market for commodities unaffected by the U.S. and Chinese tariffs are trading at a premium, as parties look for alternatives to commodities originating in the U.S. for delivery into China, and vice versa.
- Materially Adverse? Force Majeure?: Can a transaction, whether an investment or acquisition, continue as planned or will it risk being impacted by so-called “material adverse event” and “material adverse change” clauses? Additionally, can such events constitute sufficiently adverse conditions to justify the exit from or dissolution of a joint venture? Contracting parties are also increasingly concerned (and cautious) on the operation of the doctrines of “frustration” and “force majeure” on existing contracts. Generally speaking, increase in pricing (or costs) may not be sufficient to, in itself, trigger the operation of these doctrines in seeking to terminate or avoid what may have become an unprofitable contract.
What is increasingly clear today is the urgent need to understand, confirm, and evaluate the commercial, legal, and other implications for existing arrangements. In the short to mid-term, businesses in affected countries would undoubtedly be considering new, alternative or hedging strategies for trade diversification, while also seeking to enhance domestic and regional collaboration and integration. The situation is still dynamic, with ongoing negotiations and the possibility of additional changes in trade policies that could further influence global trade relations.
Trump 2.0 tariff tracker
In addition to the post above, don’t miss our Trump 2.0 tariff tracker which tracks the latest threatened and implemented U.S. tariffs, as well as counter-tariffs from other countries around the world.