WASHINGTON/TAIPEI/KUALA LUMPUR – The letters arrived in waves, laying out the consequences for Japan, South Korea, Malaysia, Indonesia, Thailand and others for failing to strike a deal in time to avert the

and then paused until July 9.

Mr Trump began with his East Asian allies, telling Japanese Prime Minister Shigeru Ishiba and South Korea’s President Lee Jae Myung that

In the hours that followed, most South-east Asian nations received letters from the White House.

For Malaysia and Indonesia, both in hectic negotiations to clinch a deal, Mr Trump’s letter specified the reciprocal tariffs of 25 per cent and 32 per cent, respectively. Thailand was told to expect 36 per cent, while Laos and Myanmar faced 40 per cent each.

These rates are mostly in line with Mr Trump’s announcement in April, when he shocked the region by announcing some of the highest tariffs here.

The new rates for Malaysia and Japan were a notch higher than the 24 per cent announced earlier. For Laos and Myanmar, the rates marked a slight drop from the previous 48 per cent and 44 per cent respectively. There was no explanation for the adjustments.

Cambodia received a surprise: a 36 per cent tariff, far lower than the 49 per cent rate in Mr Trump’s original announcement.

Singapore, India and Taiwan, among others, have not received any formal notification from the White House.

In total, 14 nations received letters – nearly identical in wording – which were also posted on Truth Social on July 7 afternoon, or from 12.30am on July 8 Singapore time.

The letter also said that America’s trading partners would face sectoral tariffs on export of items like automobiles (25 per cent) as well as steel and aluminium (50 per cent), which will hit manufacturing powerhouses like China, Japan and South Korea hard.

In addition, goods considered transshipped – made in one country but shipped from another – will face higher, unspecified tariffs.

If the nations chose to retaliate with tariffs on US goods, Washington said it would respond in kind.

The message to the recipient nations was unambiguous: Strike a trade deal within three weeks or face higher tariffs.

Yet, Mr Trump’s erratic negotiating style has also posed a credibility problem for the White House. He has already suggested that the Aug 1 deadline could be another moving goalpost, saying the latest notifications were “not 100 per cent firm”.

“This is a rerun,” said Mr William Alan Reinsch, an expert in economics and international business at the Centre for Strategic and International Studies. “Clarify the threat, extend the deadline, and hope that leads to a deal.”

It is an attempt to push the nations to make more concessions since it is clear from the US point of view that none has offered enough so far, he noted.

“The obvious question, of course, is that as Aug 1 approaches and there are still no deals, will Trump extend the deadline again – and perhaps increase the tariffs – or will he actually impose the tariffs?”

Asia reacts warily amid talks with US

In Asia, the letters landed with a thud.

A commentary in China’s official People’s Daily newspaper on July 8 reiterated Beijing’s view that President Trump’s tariffs amounted to “bullying” and that dialogue and cooperation are “the only correct path.”

The article is signed by “Zhong Sheng” or “bell toll” – a pseudonym that the paper uses to signal official views on foreign affairs, often described as “China’s voice”.

Beijing was not among the 14 recipients of Mr Trump’s tariff notice on July 7, but the world’s two largest economies are locked in a fragile truce. US Treasury Secretary Scott Bessent said on July 7 that he expected to meet with his Chinese counterpart in the coming weeks for more talks.

Malaysia, which is hosting US Secretary of State Marco Rubio and other senior officials during the Asean foreign ministers’ meeting this week, has repeatedly expressed confidence in negotiating a lower tariff rate, especially for critical export sectors like electronics.

“While we acknowledge the concerns raised by the US regarding trade imbalances and market access, we believe that constructive engagement and dialogue remain the best path forward,” said Malaysia’s Ministry of Investment, Trade and Industry in a July 8 statement.

A senior Malaysian trade official told The Straits Times that the silver lining – if any – is that Malaysia is “in the same club” as Washington’s allies Japan and South Korea. All three countries had hoped for lower tariffs, but the rates announced fell short of expectations.

In Indonesia, South-east Asia’s largest economy, analysts noted that only a small slice of the country’s exports would be impacted.

“The 32 per cent tariff poses limited macroeconomic risk to Indonesia, given that exports to the US account for only about 3 per cent of Indonesia’s gross domestic product, well below Asean peers at 9 to 15 per cent,” said Mr Aldo Perkasa, an analyst at Jakarta-based investment bank Trimegah. 

“However, the pain is highly concentrated in labour-intensive sectors like textile, footwear, furniture and auto parts, where the US represents 30 to 50 per cent of (Indonesia’s) export markets.”

Indonesia’s coordinating economic minister Airlangga Hartarto will arrive in Washington on July 8 from Rio de Janeiro, where he was at the Brics summit, for more talks with the US.

Leaders in Japan, Korea, Myanmar and Thailand have also indicated that talks with the US aimed at lowering tariffs will continue.

Tariffs risk higher prices, slower growth

Analysts in Washington said that Mr Trump’s approach was risky.

It was unfortunate that President Trump announced tariff hikes for two of its closest allies, Japan and South Korea, said former US trade negotiator Wendy Cutler.

“Both have been close partners on economic security matters and have a lot to offer the US on priority matters like shipbuilding, semiconductors, critical minerals and energy cooperation,” said Ms Cutler, who is now vice-president at the Asia Society Policy Institute.

Companies from these two countries have made significant manufacturing investments in the US, and both are key markets for a variety of US goods from pork to planes.

Mr Reinsch said the tariffs would offer no benefit to either side. “A 25 per cent tariff will have a major impact on Korean and Japanese exports to the US, including things that are in demand here like autos and semiconductors.”

“They will mean higher prices here and a slowdown in the economies of the other two countries,” he added.

Ms Cutler noted the letters also suggest that the US will not offer exemption from sectoral tariffs, including on autos – a high priority for both Japan and South Korea.

However, she also expressed cautious optimism.

“While the news is disappointing, it does not mean the game is over,” she said.

“We cannot rule out a breakthrough in negotiations in the lead up to Aug 1, when the additional tariff hikes are to take effect.”

Meanwhile, there remains a possibility of a “mini” trade deal with India.

Negotiations are believed to be centred on India opening up its agriculture and dairy sectors, while seeking lower than 26 per cent tariffs on its textile and footwear sectors.

Stressful times ahead

While the government negotiators haggle over clauses, Asia’s businesses are bracing for tough times.

The tariffs are expected to slow economic growth, increase consumer prices, cause job losses, and trigger market volatility in the region.

In Taiwan, Mr Bai Tsan-jung, chairman of Sun Jen Textile Company, said he had not slept well since the US announced in April that it would slap a hefty 32 per cent tariff on goods from the island.

If Taipei fails to negotiate a deal with Washington by July 9, around half of Mr Bai’s 110 employees may have to be furloughed or forced into early retirement.

“This has been the most stressful and challenging period for my company in our 40-year history – this is worse than Covid or Sars,” he told ST.

Mr Bai’s company, which produces nylon and other yarn, does not export directly to the US, but its main customers – garment factories in Taiwan, Indonesia and Vietnam – do.

“US tariffs do not affect only the companies that sell directly to the US – everyone in the supply chain is impacted,” he said.

There is a similar sense of uncertainty at TopTowel, an original equipment manufacturer of towels for sportswear and lifestyle brands. The US accounts for around 18 per cent of the firm’s exports.

Mr Bruce Chang, the company’s sales manager, said that it has been trying to secure orders in more countries.

Taipei, whose economy is heavily reliant on exports, has scrambled to show Washington that it takes trade rules seriously. It has repeatedly vowed to ensure that the island does not become a place for Chinese exporters to dodge US tariffs with fake “Made in Taiwan” labels. It has also pledged to buy more American products, including US natural gas, to help narrow the trade deficit.

In Kuala Lumpur, analysts believe that Malaysia’s domestic economy will take a hit regardless of any deal reached with the US.

There are growing expectations that Malaysia’s central bank will cut interest rates by 25 basis points to 2.75 per cent at its next policy meeting, which coincidentally falls on July 9.

“We expect the cut to materialise largely as a means of preempting a potential slowdown in domestic demand,” said a June 25 HSBC report.