US 15 Percent Tariff Plan May Reshape Asia-Pacific Trade Landscape: Moody’s Analytics

Uniform Tariff Could Benefit Select Asia-Pacific Economies​

New Delhi, February 24: A proposed uniform 15 percent tariff announced by US President Donald Trump could alter the trade equation for several Asia-Pacific economies, according to Moody’s Analytics.

In a statement issued on Tuesday, Moody’s Analytics said that a flat 15 percent tariff would benefit some countries in the Asia-Pacific region that had previously faced significantly higher country-specific levies. Economies such as China and several Southeast Asian nations stand to gain relative relief under a uniform structure.

However, the impact would be limited for countries like Japan, South Korea, and Taiwan, where the base tariff rate is already set at 15 percent. For these economies, a shift to a uniform rate would not materially change existing trade conditions.

Supreme Court Ruling Alters Tariff Framework​

The assessment comes in the wake of a ruling by the US Supreme Court last week against the Trump administration’s country-specific tariffs. Following the decision, Trump imposed a 10 percent tariff on all countries for a period of 150 days and subsequently announced plans to raise it to 15 percent.

As of now, no formal order or proclamation has been issued to enforce the proposed increase.

Moody’s Analytics noted that while uncertainty remains high, the uniform tariff structure offers relative clarity compared to differentiated country-based levies.

Trade Deals with India and Indonesia Under Scrutiny​

The court ruling has also cast uncertainty over recent trade agreements with India and Indonesia. Key aspects of these arrangements remain unresolved, including the timeline for India to scale down purchases of Russian oil and the volume of tariff-free textile exports from Indonesia.

India has reportedly delayed plans to send a delegation to Washington, further highlighting the evolving nature of negotiations.

Moody’s Analytics said the Supreme Court decision restricts Washington’s ability to impose country-specific tariffs, potentially weakening its leverage in ongoing and upcoming trade negotiations. This includes high-level diplomatic engagements, such as the anticipated meeting between Trump and Chinese President Xi Jinping scheduled in the coming weeks.

Tariff Uncertainty Likely to Persist​

Despite the legal setback, Moody’s expects Trump to explore alternative legal avenues to raise tariffs. It added that US tariffs could eventually return to levels seen before the court ruling.

While some governments may delay ratifying trade deals with the United States, Moody’s believes they are unlikely to withdraw entirely, given concerns over potential retaliatory or punitive tariffs.

Even under a favourable scenario where tariffs settle below pre-February 20 levels, the global trade environment is expected to remain uncertain. Businesses may seek compensation for tariffs already paid, a process Moody’s described as potentially contentious and time-consuming.

The firm also warned of a possible fresh round of front-loading. If US importers interpret the court ruling as temporary relief, they may accelerate shipments before higher tariff barriers are reinstated.

Moody’s concluded that although the decision offers short-term relief, businesses and policymakers should remain cautious amid continuing trade volatility.