US Tariff Measures Pose Trade, Geopolitical Risks Despite Limited Near-Term Impact -- OCBC
KUALA LUMPUR, July 27 (Bernama) -- The new Section 301 tariffs are expected to have a largely muted impact on exports to the United States (US) in the near term, given extensive product exemptions and relatively lower effective tariff rates than originally anticipated, although geopolitical risks remain significant.
However, OCBC Group Research senior ASEAN economist Lavanya Venkateswaran said the latest US tariff measures would continue to pose an overhang for exporters across the region, particularly amid the ongoing Section 301 probe into structural excess capacity and overproduction.
"The probe was launched on March 11, 2026, covering 16 economies, including Malaysia. The findings have yet to be released," she said in a research note today.
She said OCBC assessed the effective tariff burden on exports from India, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam by combining product-level Most-Favoured-Nation (MFN) tariff rates, country-specific Section 301 tariff rates and product exemptions under the Section 301 exclusion lists.
"The assessment also incorporates additional country-specific exemptions for Indonesia and Malaysia, where applicable. We also do not include previously introduced tariffs such as those on copper, aluminium, timber and lumber.
"The objective is to estimate the actual tariff rate faced by imports after accounting for product-specific exemptions rather than relying solely on headline tariff rates," she said.
She noted that US imports from Singapore receive the largest exemptions based on 2025 data, followed by the Philippines, Thailand, Malaysia, India, Vietnam and Indonesia. As a result, the effective tariff rates on US imports from these economies are still low.
"Export momentum should remain supported in the near term, particularly for tariff-exempt sectors such as semiconductors and pharmaceuticals, although the persistence of the US tariff agenda and ongoing Section 301 investigations would keep trade and geopolitical risks elevated," she added.
-- BERNAMA
