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Speaker 1: Bright and Bridge Rich Asia has been hit the hardest

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Speaker 1: by Donald Trump's new terrorists. We've all heard that time

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Speaker 1: across to our Asia Business correspondent Peter Lost to check

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Speaker 1: the damage. Good evening, Good evening, Ryan Fara say this

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Speaker 1: is much worse for Asian economies than anyone was expecting.

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Speaker 1: What are people saying about it?

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Speaker 2: Well, absolutely right, I mean Asia has been hit pretty

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Speaker 2: hard by this. I mean there's some standout things here.

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Speaker 2: First of all, China. China has been hit with the

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Speaker 2: so called reciprocal tariffs of thirty four percent, but bearing

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Speaker 2: in mind it was already facing tariffs of twenty percent

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Speaker 2: as a punishment for what Donald Trump says is its

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Speaker 2: role in the fentanyl crisis. So China in effect has

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Speaker 2: fifty four percent tariffs. That is really going to have

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Speaker 2: a huge impact on trade. China and America are the

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Speaker 2: biggest trading partners in the world. China's biggest export market

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Speaker 2: is the US, and the US's biggest important market is

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Speaker 2: from China. It's going to affect the Chinese economy for sure.

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Speaker 2: People are trying to work out by how much, but

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Speaker 2: some are saying it could shave a couple of percent

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Speaker 2: off GDP It's also going to have an effect on

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Speaker 2: the US, particularly the US consumer, because there is no

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Speaker 2: question that prices will have to go up. Those prices

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Speaker 2: are an effect paid at the border by the companies

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Speaker 2: that input it import into America. And they've only got

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Speaker 2: three options. Really. They either squeeze their suppliers or that's difficult.

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Speaker 2: Their companies like Walmart have been trying to do that

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Speaker 2: already with their Chinese suppliers, but some of the Chinese

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Speaker 2: suppliers already operating on wayferthin margins. The other option is

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Speaker 2: the companies themselves absorb the cost, or they put prices

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Speaker 2: up for the consumers. And it's the third one which

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Speaker 2: is the most likely. So this is going to put

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Speaker 2: up prices for US consumers and have a big impact

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Speaker 2: on inflation in the US. Now, there are some other

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Speaker 2: standard things as well, and that is the tariffs that

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Speaker 2: have been imposed upon some Southeast Asian Southeast Asian economies

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Speaker 2: like for example, Sri Lanka forty four percent, Cambodia forty

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Speaker 2: nine percent, Allowos forty eight percent. Now, I know there's

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Speaker 2: no such thing really as morality when it comes to

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Speaker 2: trade and economics, but what Trump is doing to these

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Speaker 2: countries is morally reprehensible in my view, because these levels

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Speaker 2: of tariffs will impose enormous damage on some of the

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Speaker 2: poorest nations in the world, some of these Asian and

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Speaker 2: African countries, I mean allawos. The GDP per capita is

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Speaker 2: about five hundred dollars a year, so that means the

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Speaker 2: average person earns under two dollars a day. And the

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Speaker 2: idea that somehow these countries can run trade trade death

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Speaker 2: sits with the US, in other words, buy more from

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Speaker 2: the US than it actually sells them, is just completely

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Speaker 2: bone headed. There's no chance that these countries can buy

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Speaker 2: the things that America produces, like nice shiny lexuses or iPhones,

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Speaker 2: or even the genes and the sneakers that companies like

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Speaker 2: Levi's and nik produce, which some of them are actually

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Speaker 2: produced in those very countries. All they can do is

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Speaker 2: watch enviously as they're shipped off to the US. So

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Speaker 2: this idea that somehow trade these trade deficits are all

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Speaker 2: down to tariffs and they can be remedied somehow by

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Speaker 2: tariffs on these porous nations in the world is just

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Speaker 2: a complete nonsense.

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Speaker 1: Have we had any reaction from them at this point?

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Speaker 2: Well, they're in a very very difficult position because first

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Speaker 2: of all, these countries are just not big enough to

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Speaker 2: be able to retaliate and react. And also what can

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Speaker 2: they retaliate. There aren't enough dollar per dollar imports into

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Speaker 2: the country that it can retaliate on. All they can

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Speaker 2: do is plead with the US, which some countries are of.

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Speaker 2: Vietnam is doing that. It's asked for the US to

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Speaker 2: suspend the tariffs because it's going to do enormous damage

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Speaker 2: to them. But the reason why the US runs trade

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Speaker 2: deficits with these countries is not because of tariffs. It's

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Speaker 2: because the American typical consumer, typical household borrows, doesn't save

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Speaker 2: en US so as a result, they have to go

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Speaker 2: and borrow. They have to go and borrow to invest

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Speaker 2: in new facilities and factories, they have to borrow to

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Speaker 2: finance their consumption. And they have this enormously lucky privilege

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Speaker 2: that they can borrow in their own currency, the US dollar,

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Speaker 2: because the US dollar is the world's reserve currency, so

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Speaker 2: other countries do need dollars. So the way it works is,

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Speaker 2: of course they run trade efficits. Other countries sell their products,

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Speaker 2: receive US dollars in return, which they then go and

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Speaker 2: invest in US treasuries, which helps America actually go and

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Speaker 2: borrow the money that it needs to finance itself. And

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Speaker 2: if Donald Trump really wants to bring that system down,

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Speaker 2: which has been operating for decades and has allowed America

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Speaker 2: for decades to live way beyond its means, there are

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Speaker 2: going to be some serious consequences for that, not just

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Speaker 2: for these countries but also for the US itself.

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Speaker 1: What about Japan, Their teriff right was twenty four percent.

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Speaker 1: I saw the Prime Minister coming out and saying it's

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Speaker 1: a national crisis.

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Speaker 2: Yes, well, in some ways, you know, this is very

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Speaker 2: disappointing for Japan because Prime Minister is well, first of all,

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Speaker 2: the country has lower tariffs than the US does, so

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Speaker 2: you would think that somehow they will be exempt from this.

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Speaker 2: And Prime Minister Asheba has invested a lot of time

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Speaker 2: and political capital going to the US meets with Donald

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Speaker 2: Trump in the hope of getting exemptions and instead he

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Speaker 2: gets hit with tariffs of twenty four percent. So this

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Speaker 2: is a political crisis for part Prime Minister Sheba in

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Speaker 2: terms of what does he do now, how does he

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Speaker 2: respond it's an economic problem because Japan is a huge exporter.

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Speaker 2: You know, it relies its biggest companies rely on exporting,

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Speaker 2: and also its biggest companies have invested heavily in the US.

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Speaker 2: Japan is the biggest investor of any country in the

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Speaker 2: world in the US. Companies like Toyota Honda have big

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Speaker 2: plants and factories in the US. So you know, this

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Speaker 2: is a big problem for Japan and that's why we're

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Speaker 2: seeing their markets being hit very badly. Yesterday, the ni

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Speaker 2: K two two five was down four percent. It's down

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Speaker 2: heavily again because that index consists of the country's biggest exporters.

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Speaker 2: So is right, it is in many ways an economic

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Speaker 2: crisis as well as a political crisis.

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Speaker 1: For him, Peter, what about readerriction? Are there any other

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Speaker 1: countries who will take the goods that these guys are

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Speaker 1: producing that you know are obviously going to be slept

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Speaker 1: with terrorists, which will make them more expensive, which will

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Speaker 1: mean the American consumers will buy list of them, which

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Speaker 1: will mean they'll have you know, exists, or either they

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Speaker 1: won't produce them, or if they do, they'll need to

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Speaker 1: sell them somewhere else.

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Speaker 2: Well, this is what some people are suggesting. What some

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Speaker 2: people are suggesting is countries like China, for example, don't

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Speaker 2: react by slapping more tariffs on US goods. What they

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Speaker 2: should do, and what they have been doing, is looking

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Speaker 2: for new markets. I mean, at the end of the day,

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Speaker 2: the USA is about fifteen percent of global trade, so

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Speaker 2: that means the other eighty five percent consistent countries who

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Speaker 2: could trade with each other. And China has been actively

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Speaker 2: sourcing new markets in the Middle East and Southeast Asia,

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Speaker 2: in the Global South, and other countries should try and

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Speaker 2: do that as well. And this is the suggestion and

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Speaker 2: in fact what you do here as you forget about

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Speaker 2: the US, although it's a big market, if you really

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Speaker 2: can't trade or trade without huge tariffs, which means you

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Speaker 2: won't be able to sell your goods anyway, let's try

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Speaker 2: and do it amongst ourselves elsewhere. And some of these

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Speaker 2: economies are growing very fast, in Southeast Asian economies, you know,

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Speaker 2: some of the fastest growing economies in the world. So

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Speaker 2: this is where trade could be developed and America be

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Speaker 2: cut out of the global trading system in effect.

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Speaker 1: Peter, thanks for that wrap up. Peter lewis that Asia

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Speaker 1: Business correspondent. For more from Hither Duplessy Alan Drive, listen

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