Reciprocal Tariffs Could Impact India, Thailand The Most In Asia, Says Nomura. See Which Sectors Will Bear The Brunt

The note explained that emerging Asian economies have higher tariff rates on American exports relative to other countries and are thus at a higher risk of reciprocal tariffs from the US.

Sectors or products such as vegetables, textiles, clothing, footwear, animals, and transportation equipment are expected to take the maximum brunt of the tariffs, Nomura anticipated.

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India and Thailand are expected to be at a risk of higher reciprocal tariffs from the US, Nomura suggested recently. In a note, the financial company’s economists said that reciprocal tariffs will be implemented on tariff gap, non-tariff barriers, and value added tax (VAT), among other factors.

Sonal Varma, Chief Economist for Asia ex-Japan and India, Nomura explained that emerging Asian economies have higher tariff rates on American exports relative to other countries and are thus at a higher risk of reciprocal tariffs from the US. “By sector, Asia imposes higher tariffs on agricultural products and transportation. The former is generally politically difficult for Asia to lower, but countries could lower their tariff rates on the transport sector, which includes motor vehicles,” Varma said in the co-authored note with Si Ying Toh, Nomura’s economist for Asia ex-Japan and Taiwan, reported Business Standard.

Varma and Toh said sectors or products such as vegetables, textiles, clothing, footwear, animals, and transportation equipment are expected to take the maximum brunt of the tariffs. 

Trump Reiterates His Tariff Plans For India

Notably, US President Donald Trump on March 5 hammered on the reciprocal tariffs on other countries including India, expected to be imposed from April 2, 2025. The American president warned, “If you don’t make your product in America under the Trump administration, you will pay a tariff, and in some cases, a rather large one. Other countries have used tariffs against us for decades and now it's our turn to start using them against those other countries.”

Universal Tariffs

A clearer way to project the direct exposure of Asia to the US is by understanding the share of the continent’s exports to the Western nation. Vietnam reported an exposure of 25.1 per cent of its GDP to the US in 2024 and is expected to be the worst-hit region in Asia. Taiwan is anticipated to follow with a 14 per cent exposure, while Thailand’s exposure stands at 10.4 per cent. Meanwhile, Malaysia and Hong Kong have 10.3 per cent and 9.5 per cent exposure respectively to the US, as of 2024. Nomura estimated that Indian exports to the US stand around 2.2 per cent of its GDP and could be at risk if universal tariffs are implemented.