ING’s Deepali Bhargava argues that Asia overall benefits from the US move from reciprocal IEEPA tariffs to a flat Section 122 surcharge. The Supreme Court ruling and subsequent policy change reduce effective tariff rates for key exporters like China, India and Vietnam, with the strongest sectoral gains in low‑value‑added goods where Asia already holds a large global market share.

Section 122 shift favours Asian exporters

"The Supreme Court’s decision to strike down the reciprocal IEEPA tariffs could materially reshape the trade policy landscape. In response, US President Donald Trump swiftly announced the introduction of a 15% across‑the‑board tariff under Section 122, following an initial 10% surcharge that was raised to 15% on 22 February."

"From a regional perspective, the removal of IEEPA tariffs represents a clear positive for Asia. China and India benefit the most, with tariff cuts of 7.1 points and 5.6 points, respectively. In their case, the new 15% rate is far better than the steep, country‑specific IEEPA tariffs they had been facing previously."

"Industries that were most heavily impacted by IEEPA measures show the sharpest decline in tariff incidence. These sectors, where Asia holds a strong global market share, include: apparel, toys, games and sport, furniture, lighting, electrical machinery, aircraft"

"For these categories, the gap between earlier IEEPA tariffs and the new 15% surcharge is particularly large, resulting in a meaningful improvement in export competitiveness for key Asian producers."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)