Just ahead of the 1 Aug deadline, US President Donald Trump signed an executive order on Thursday (31 Jul) that modified 'reciprocal' tariffs on a number of countries/regions, with updated levies ranging from 10% to 41%. The tariff rates are slated to take effect from 7 August. The original “reciprocal” tariff rates were announced on 2 April 'Liberation Day', which shocked global markets with its unexpectedly high rates. The US subsequently paused the implementation for 90 days and instead implemented a universal 10% baseline rate for most exporters, and set a new deadline of 1 August, UOB Group's FX analyst Suan Teck Kin reports.

Tariff reset ahead of 1 August deadline

"US President Trump signed an executive order adjusting 'reciprocal' tariffs on 69 countries, effective 7 Aug, with rates ranging from 10% to 41%. Key impacts include lowered tariff rates for ASEAN countries and 10% baseline for Singapore. Investment pledges from the EU and Japan to invest in the US were also announced."

"Transshipment of goods will face a 40% tariff, but details remain unclear and subject to bilateral negotiations. Sector-specific tariffs add to uncertainty, with pending investigations into semiconductors and pharmaceuticals. Singapore may be exposed, as pharmaceuticals made up 35% of its US export value in 2024, up from 24% in 2023.

"While tariff clarity has improved, uncertainties around transshipment and sector-specific tariffs persist. The US shift towards bilateral deals has upset the globalization efforts, raise inflation risks and global trade tensions. De-dollarization concerns are growing, though the US dollar will remain dominant for some time. Asia’s export outlook may soften in 2H25 and into 2026, while regionalization accelerates, with ASEAN poised to benefit from initiatives like the Johor-Singapore SEZ and FDI inflows in this uncertain environment."