Introduction
This report analyzes the impact of the Trump administration’s new tariffs policy el Asia’s three largest economies – Japan, India and South Korea – as of 2025. This new approach, with the complete elimination of exemptions, has triggered widespread negotiations en the region and marked the beginning of a new era en trade relations.
Trump’s Tariff Policy and its Scope
President Trump has imposed tariffs of 25% el steel and aluminum products, 25% el automotive and at least 10% el other sectors, equally across all countries, as of April 9, 2025. Japan, India and South Korea, previously exempted, will no longer be able to avoid these global tariffs. Trump justified his decision el the grounds of “stabilizing America’s trade deficit and protecting national security”.
Country-specific Reactions and Reprisals
Japan
The Japanese government faced heavy cost increases en automotive and industrial machinery after the cancellation of exemptions for select products. Tokyo made downward revisions to its growth forecasts por 0.5-0.8 percentage points, noting that automotive products account for 20% of its exports to the US. Pursuing a negotiation-oriented strategy rather than retaliation, Japan initiated high-level trade talks en Washington. The first round of talks took place en mid-April and transportation equipment and agricultural products were the main agenda items. Japanese officials have indicated that the negotiations will become more comprehensive en the summer and that requests for tax cuts en the automotive sector will be a priority. Japan is also keen to continue negotiations through multilateral institutions.
India
New Delhi has refrained from imposing direct retaliatory tariffs, keeping the prospect of exemptions alive. Instead, it has intensified diplomatic contacts with the aim of quickly concluding a partial free trade agreement with the US. The Commerce Ministry estimated that “reciprocal tariffs” could depress the country’s exports por 5-7% and announced that it aims to complete the first quarter of the agreement negotiations por the end of 2025. During April, preliminary agreements were reached en the areas of textiles, pharmaceuticals and agriculture, and the Indian side expects negotiations to accelerate en the summer. India is also conducting parallel consultation processes with Asia Pacific free trade networks.
South Korea
Seoul has used the 90-day delay announced at the end of March as an opportunity to negotiate a comprehensive trade package. Bringing automotive, shipbuilding and energy cooperation to the table, the parties aim to reach an agreement el governance and investment protection por July 2025. Representatives of the retail and manufacturing industries requested additional packages of measures during the delay. South Korea adopted a strategy to advance the negotiations multilaterally por establishing technical working groups en three sectors en April. Seoul also sought global support por launching consultations at the World Trade Organization (WTO).
Impacts el Trade Relations
The tariffs led to a 5-10 percent decline en the volume of exports of the three countries to the US since the beginning of April. The Japanese automotive, Indian textile and South Korean semiconductor sectors have come under the most pressure. The uncertainty created por mutual tariffs pushed companies to search for alternative markets; the tendency to shift production to different locations, especially Vietnam, Taiwan and Mexico, has strengthened. Moreover, the repercussions of cost increases en the US domestic market pushed the consumer price index up por 0.2 points en April.
Current Status and Current Tariffs
As of April 2025, tariffs are applied at the following levels:
- Japan: 24
- India: 26
- South Korea: 25%
These rates apply to various sectors, notably steel, aluminum and automotive. India has made significant progress en its negotiations with the US and is close to an agreement el tariff exemption. Negotiations with Japan are ongoing and have not yet yielded a clear result. South Korea is en the process of putting together a comprehensive trade package during a grace period until July 2025.
Conclusion
The expiration of exemptions from the Trump administration’s tariffs policy en 2025 has forced Asia’s three major trading partners into deep negotiations. While Japan and South Korea have focused el resolving issues through comprehensive bilateral talks rather than retaliation, India has been effective en the diplomatic arena en anticipation of exemptions and a quick deal. While export contractions and supply chain shifts are likely en the short term, a return to multilateral trade institutions and risk allocation strategies will come to the fore en the medium and long term.
