Behind the tariffs: How Trump is using Asian economies to corner China on trade | Explained

Trucks drive past containers at the Port of Ningbo-Zhoushan in Ningbo, in China's eastern Zhejiang Province on May 28, 2025.

US President Donald Trump, through his tariff letters this week, threatened to impose punitive levies on more than 20 countries if they failed to strike trade deals with Washington by July 31. The countries – most of them in Asia – will face tariffs ranging from 20 to 50 per cent as Trump cited their “unfair” trade deficits, which means they export more to the US than they import.

He, however, left the doors open for further negotiations, saying the suggested tariffs were “more or less” final offers.

After Trump issuing tariff letters, US Secretary of State Marco Rubio said that Asian nations might get "better" tariff rates than the rest of the world. He met with Chinese Foreign Minister Wang Yi in Kuala Lumpur on Friday, as the two major powers vied to push their agendas in Asia at a time of simmering tension over a US trade tariffs offensive.

Which countries has Trump targeted and why?

Among those targeted were top trade partners Japan and South Korea, which could each be hit with 25 percent.

Indonesia, Laos, Thailand, Malaysia, the Philippines, Brunei and Myanmar – all members of ASEAN – face duties ranging from 20 percent to 40 percent.

Vietnam, which is also an ASEAN member, is one of only two countries – Britain being the other – to have reached a tentative agreement with Trump.

Many observers were quick to frame Trump’s tariff threats as yet another chapter in his combative trade policy. But beneath the surface, this latest wave of tariffs reveals a far more calculated objective: using regional pressure to economically isolate China.

How Trump’s Asia tariffs really target China

The strategy appears to be less about punishing these nations directly, and more about disrupting their trade ties with China. Many of the countries on the tariff list are deeply embedded in Chinese-led supply chains, either importing Chinese goods for reprocessing or serving as export gateways for Chinese manufacturers looking to bypass US tariffs.

With his tariff move, Trump seems to be cracking down on trans-shipping – the practice of rerouting Chinese goods through other countries (like Vietnam) to evade tariffs. The Vietnam agreement, which set a 20% tariff on direct exports and a 40% tariff on suspected trans-shipped items, establishes a model for future deals.

Moreover, experts believe that Trump’s administration is using tariffs to reshape global supply chains, pushing Asian partners to exclude Chinese components from their exports to the US. This move not only targets China economically but also challenges its regional influence.

Several nations in Southeast Asia, a region that accounted for 7.2% of global GDP in 2024, are also major manufacturing hubs for goods such as textiles and footwear, meaning they will be severely affected by tariffs, while conversely prices for such goods will also rise in the US.

Why this strategy could backfire

Countries like Japan and South Korea face growing pressure to choose between the US and Chinese markets. As Capital Economics warns, mandating supply chain decisions “could open other countries up to retaliation from China, which… is a more important source of investment.”

While Vietnam agreed to onerous terms, economists like Mark Williams argue that other Asian nations may not have Vietnam’s leverage, and thus are unlikely to replicate its concessions.

Experts such as Bill Reinsch at CSIS note that countries are wary of Trump’s unpredictability—“if we agree … are you going to come back two weeks later with sectoral tariffs?”

Beyond China

While Beijing is the primary target, Japan and South Korea are also in the crosshairs due to large trade surpluses and pressure from Trump to import more American agricultural and industrial goods. The tariffs aim to expand geopolitical leverage, influence supply-chain logistics, and reshape trade relationships in line with the “America First” doctrine.