Key Outcomes
- U.S.–China (Busan, 30 Oct):
- President Trump announced a reduction in the effective U.S. tariff burden on Chinese goods from about 57% to about 47%, mainly by cutting the fentanyl-related surcharge from 20% to 10% and pausing threatened escalations.
- China agreed to delay rare earths export controls for one year and resume U.S. agricultural purchases.
- The new rates are based on public statements and press reports, not yet on official CBP/USTR schedules. Importers should continue using current rates until official notices are published.
- U.S.–ASEAN (KL, 26–28 Oct):
- The U.S. confirmed “reciprocal tariff frameworks” with Malaysia, Cambodia, Thailand, and Vietnam, aligning them with the 19–20% tariff band.
- Sectoral carve-outs were announced (e.g., Vietnam coffee, Malaysia aerospace/pharma), but details are pending.
- These frameworks provide predictability for exporters but do not remove the core “reciprocal” tariff structure.
Compliance & Risks
- Transshipment Penalties: Goods of Chinese origin routed through ASEAN can still face penalty rates up to 40%. This risk remains unchanged.
- Sectoral Tariffs: New 25% tariffs on medium/heavy trucks and 10% on buses (effective 1 Nov 2025) can stack with country rates.
- De-minimis Rule: The USD 800 de-minimis threshold for China/Asia e-commerce parcels remains closed.
Sector Highlights
- Garments/Textiles: ASEAN rates locked at 19–20%; China at ~47%. Transshipment and origin labeling are key compliance risks.
- Electronics: ASEAN at 19–20%, China at ~47%. U.S. OEMs are shifting assembly to ASEAN. PRC components still face Section 301 liability.
- Food/Agriculture: Vietnam coffee exemption announced but not yet operational. Malaysia secures carve-outs for palm oil, rubber, cocoa.
- Automotive: ASEAN at 19–20%, China at ~47% plus possible 232 actions. New sectoral tariffs apply globally.
Action Points
- Monitor for official USTR/CBP notices before claiming new rates.
- Update supplier declarations and origin documentation.
- Prepare for both reduced and re-escalated tariff scenarios in contracts.
- Watch for further details on sectoral carve-outs.
Key Messages
- Tariffs on China softened, but the overall structure remains.
- ASEAN got predictability by accepting U.S. reciprocal logic.
- Transshipment remains the biggest compliance risk for ASEAN exporters.
Note: All figures and frameworks are based on public statements as of 31 October 2025 and may change upon official publication.
