Efforts this week by Asean nations to water down Washington’s tariffs through talks with the US’ point man on trade appear to have failed, experts say. Instead, fresh threats were issued of levies unless lopsided trade deals favouring America can be quickly reached.
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During a two-day visit to Kuala Lumpur that began on Wednesday, US Trade Representative Jamieson Greer made it clear that Washington would not budge on its goal of reclaiming control of key industries – including semiconductors, which are also vital to Malaysia, Vietnam and Thailand.
While he acknowledged that members of the Association of Southeast Asian Nations were key cogs in the global semiconductor supply chain, he said chips were “critical” to US national security, signalling there would be no backtracking on reshoring the semiconductor manufacture to the US.
Greer’s big stick approach sets the tone for US President Donald Trump’s highly anticipated visit to Kuala Lumpur next month to attend the Asean Summit, experts say, where leaders of the region’s export-led economies had hoped he would hear their pleas for freer access to the world’s largest consumer market.
The trade representative’s position on semiconductors came just hours before Trump announced a 100 per cent tariff on imported pharmaceuticals effective from next Wednesday.
This could potentially blindside a bloc whose key members make generic drugs and ingredients for vaccines and patented drugs – and who also could face surging medical costs if forced to buy from the US.