The trade war is an economic conflict between two countries to protect the national markets as well as to suppress the trade deficit by imposing tariffs or quotas on imports against each other.
In March 2018, the US negotiated the Chinese trade officials to lower China’s tariff on the US automobiles. However, in contrast, Trump declared that the US would apply tariffs on $50 billion on Chinese electronics machinery and aerospace products. In retaliation for that, China targeted soybeans as the commodity to adversely affect the US by cancelling all US soybean import contracts.
As the global economic powers, the trade war between the US and China could negatively impact countries in Southeast Asia as well. At least four countries in the region must be prepared when the trade war escalates to the next level.
Singapore
Singapore would be the most deeply-affected country in Southeast Asia as it would be one of the nations that caught in the crossfire of US-China trade war. Singapore is an export-heavy country and a regional supplier; thus, it is no doubt that the prolonged trade-war between two powers can negatively impact Singapore’s GDP by 0.3% points in 2018.
Malaysia
As Malaysia’s trading partner, China’s tariffs and regulations have a direct impact on Malaysia. It is reported that once Malaysia could reap more than $300 billion from its sales of both machinery and electronic products to China. Not only that, but Malaysia also once depended on exports of palm oil and crude oil.
Thailand
Although very minimum, Thailand is the country that would be affected indirect and directly by both the trade war between the US and China as well as the US-China tension itself. The first wave of tariffs would influence Thailand’s exports of products like machinery and the parts, plastics, and vehicles. Whereas these are Thailand’s exported products that worth 8.8 billion in 2017.
Indonesia
Indonesian market heavily depends on the presence of the US, ranging from fashion and apparel industry to machinery. In total, there are products that are listed as Indonesia’s seven top export to the US. Looking at this fact, the trade war could harm Indonesian exports.
To mitigate the future risks, the government plans to strengthen the local industries, primary industries development and promoting tourism to gain support from budget airlines which are willing to expand and improve airports across the country.
source: asianews.network