On 2 April 2025, the United States introduced a two-tier tariff regime comprising a 10 per cent universal baseline tariff and elevated country-specific tariffs of up to 50 per cent, targeting 57 countries—including many in the Asia-Pacific—with limited exemptions. Although the country-specific tariffs were suspended on 9 April for all but China, policy uncertainty remains.

Subsequent signals have been mixed: while product exemptions were expanded to include certain electronics, the US also launched new Section 232 investigations into imports of semiconductors and pharmaceuticals. These developments suggest the potential for further unilateral trade actions and underscore the persistent uncertainty in the global trade environment.

These shifting trade dynamics carry important implications for the Asia-Pacific region, where deep integration into global value chains (GVCs)—characterized by high reliance on imported inputs—intensifies both direct and indirect exposure to evolving US tariff measures.

Direct exposure occurs when a country’s exports to the US are directly subject to tariffs. Countries most at risk from direct exposure were identified in our earlier blog. However, the actual burden can be heavier than the announced tariff rate. This is because tariffs are applied to the full shipment value, even when much of it comes from imported........

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