by Manal Barakat, SeaNewsEditor
Asian nations are engaging in intense diplomatic efforts to secure favourable agreements from the United States before the 1 August tariff deadline.
According to a Bloomberg report, Japan, the Philippines, and Malaysia are currently holding several rounds of discussions with US authorities to secure a deal that benefits both sides.
However, the uncertainty surrounding these trade negotiations has already impacted Asian markets.
The United Nations Conference on Trade and Development (UNCTAD) recently warned that tariff policies are already disrupting global trade.
A CNBC report cited Rebeca Grynspan, Secretary General of UNCTAD, as saying, “We already see a disruption in the global supply chain."
“Many of the CEOs sit and wait, because if there is no predictability, and what you need for trade and investment is predictability and trust,” she added.
Vietnam, Cambodia, and Malaysia, three Asian countries that have gained from the “China Plus One” supply chain approach, are now feeling the effects of renewed supply chain changes, Grynspan noted.
Trump has threatened to impose a 40% tariff on any product that uses transhipment. These include goods that begin their production in China but are routed through countries like Vietnam to avoid tariffs on Chinese imports.
The UNCTAD says that tariffs will have a stronger negative impact on the least developed nations globally. That is especially true for countries with existing tariffs.
Additional US tariffs on these countries could lead to a "stacking up of trade taxes," which would reduce exports.
“If you take the least developed countries of the world, 46 countries that are the most vulnerable, we project that their exports could be impacted, as much as 54% down, if the tariffs are put on them,” said Grynspan.
Impact on US smaller ports
In addition, CNBC reported an impact on trade in some of the United States' smaller ports.
Across the United States, smaller ports are experiencing reduced trade activity as shippers adjust their supply chain deliveries to meet the August tariff deadlines.
While the Port of Los Angeles has seen an increase in traffic, smaller ports like Oakland, Jacksonville, New Orleans, and Panama City have reported declines in container volumes.
The Port of Oakland recently experienced a 10.1% decline in container volume from the previous month, reports CNBC. Year-over-year figures show a 13% drop in June.
Port of Oakland maritime director Bryan Brandes attributes the drop to tariff uncertainty.
“Importers and exporters are adjusting their supply chain timing and routing decisions in response to evolving conditions,” Brandes tells CNBC.
Market experts claim that shippers are opting to unload their freight at larger ports to avoid the tariffs, resulting in a market recalibration rather than a seasonal dip.
