Trump's Tariffs - The Times Of Central Asia

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Kazakhstan Takes the Initiative: Delegation Planning to Head to U.S. to Tackle Trump Tariffs

Deputy Minister of Trade and Integration Zhanel Kushukova has announced Kazakhstan's decision to send a high-level delegation to the United States for consultations on import duties, marking a proactive step to address trade challenges and strengthen economic ties. This move comes amid heightened tensions in global trade after sweeping tariffs were unveiled by U.S. President Donald Trump, including a significant 27% duty on Kazakh goods. The delegation aims to foster dialogue on reducing trade barriers, advocate for the equitable treatment of exports, and explore exceptions for certain goods. No date has been set for the visit yet. The decision demonstrates Kazakhstan's commitment to bolstering its position as a key player in international trade. The targeted discussion will focus on sensitive issues, including tariffs impacting industries such as crude oil, uranium, silver, and ferroalloys, which, as noted by the Ministry of Trade and Integration, “constitute 92% of total exports.” As previously reported by The Times of Central Asia, while these goods might qualify for exemptions under U.S. regulations, the higher tariff symbolizes a broader challenge for Kazakhstan in its response to navigating the evolving trade landscape. Context of Trump's Tariff Policy The 27% tariff imposed on Kazakhstan stands out as by far the highest targeting Central Asia, where neighboring Uzbekistan, Turkmenistan, Tajikistan, and Kyrgyzstan will face a 10% baseline duty. Billed as addressing trade imbalances and protecting U.S. industries – though the methodology behind the administration’s calculations has baffled many analysts - Trump's tariff regime has introduced a layered system targeting a raft of nations. While China has been hit hardest, with seemingly ever-increasing duties now standing at a dizzying 145%, even smaller economies such as impoverished Cambodia (49%) and Laos (48%) have been caught in the crossfire, raising concerns about disproportionate impacts on developing nations. While Trump stepped back from the brink on April 9, announcing a 90 day pause for the majority of countries before doubling down on China, companies such as Apple - the world’s most valuable publicly listed company – had already experienced a fall in market capitalization of more than $300 billion on the day after the policy was announced, its’ worst single-day drop since 2020. Amidst a slump in markets globally, meanwhile, U.S. Federal Reserve chair, Jerome Powell, has warned that Trump’s tariffs will hit the U.S. economy and lead to rising prices. Economists have noted the potential ripple effects of tariffs on global markets, with fears of supply chain disruptions and stagflation growing. For Kazakhstan, a resource-rich economy striving to diversify beyond its traditional oil and mining industries, the heightened duties could dampen its exports while complicating efforts to attract foreign investment. However, analysts such as Rasul Rysmambetov have argued that Kazakhstan’s relatively small share in global trade may shield it from significant fallout, with the tariff largely “symbolic” in nature. Opportunities Amid Challenges Despite these challenges, Kazakhstan is attempting to leverage the situation to advance its diplomatic and economic strategies, with the country’s Ministry of Trade and Integration working to secure specific exemptions...

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Trump’s Trade War Against China: Opportunities and Risks for Central Asia

Experts believe that Central Asian countries stand to gain from U.S. President Donald Trump’s renewed trade war with China, but the region also faces substantial risks. Kazakhstan Bears the Brunt On April 3, Trump signed an executive order imposing “reciprocal” customs duties on goods from dozens of countries. Kazakhstan faced the steepest tariff in Central Asia at 27%, while Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan each received a flat 10% rate. Kazakhstan’s Ministry of Trade explained that 92% of the country’s exports to the U.S., including crude oil, uranium, silver, and ferroalloys, were among the exempt categories listed in the order. As a result, only 4.8% of total exports to the U.S. would be affected. The government has announced its intent to hold consultations with Washington to avoid further tariffs. More broadly, global economic uncertainty tied to the trade war may cause further weakening of national currencies across Central Asia. Declining demand for oil could depress prices, posing a particular threat to Kazakhstan, where oil is a primary export. On April 9, Trump announced a 90-day freeze on additional tariffs, applying a temporary 10% duty for more than 75 countries, excluding China. Open Confrontation with Beijing In a sharp escalation, the U.S. raised tariffs on Chinese imports to 145%. Beijing retaliated with 125% tariffs on U.S. goods, effectively halting trade. As the Chinese government noted, duties at this level “no longer make economic sense.” On April 13, Trump, responding to pressure from the U.S. business community, reversed duties on processors, computers, smartphones, and electronics. According to Morgan Stanley, 87% of iPhones are made in China, and production of the upcoming iPhone 17 will also be based there. Additionally, four out of five iPads and 60% of Macs are manufactured in China. Meanwhile, Chinese President Xi Jinping has urged European nations to resist what he described as Trump's erratic trade policies. Central Asia: Strategic Position, Mixed Prospects With Chinese goods effectively shut out of the U.S. market, Beijing is likely to turn to alternative trade routes. While Southeast Asian nations such as Vietnam and Malaysia benefitted during the 2018-2019 trade war, this time Trump has also targeted some of them with tariffs, fearing rerouted exports. China’s growing pivot toward Eurasia places the Central Asian countries at a critical transit junction. Their strategic position on land routes to Europe offers untapped potential for trade reorientation. Kyrgyzstan, in particular, has served as a conduit for Chinese goods, with Chinese-manufactured items re-labeled as Kyrgyz products before entering markets across the CIS. This practice, noted as early as 2015, primarily catered to Russia but also extended to Kazakhstan. More recent findings indicate that illegal Chinese imports into Central Asia may total billions of dollars. The existing smuggling infrastructure could be formalized and scaled, facilitating increased regional trade. Long-term benefits could include heightened cargo traffic through Kazakhstan, Uzbekistan, and Kyrgyzstan, sparking Chinese investment in logistics infrastructure and creating jobs in transport. Risks of Overreliance The trade conflict may also incentivize some Chinese manufacturers to relocate assembly operations...

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Unpacking the Effects of Trump’s Tariffs on Central Asia

Trade analysts across Central Asia generally agree that the immediate impact of the United States' tariff policy on the export dynamics of their nations will likely be minimal, as observed in past experiences, except for Kazakhstan. However, there is a palpable concern regarding potential unforeseen consequences arising from a broader global trade conflict. Notably, the timing of the Trump administration's announcement regarding global tariffs on imports coincides with a period when Central Asian countries are actively working to enhance their regional trade relationships. This new tariff policy raises significant doubts about the authenticity of recent U.S. efforts to promote increased trade and investment in the region. The mixed signals coming from Washington may lead Central Asian leaders to re-evaluate their current trade partnerships, especially as they consider the benefits of strengthening ties with China and Russia against the attractiveness of expanding commerce with the United States. Similarly, the European Union may find an opportunity to improve its position, while India could leverage the Chabahar route (a multi-modal transportation route connecting India, Iran, Afghanistan, and potentially Central Asia and Europe). It is worth noting that the market is primarily situated in Asia, and this alternative could have adverse long-term effects on the United States. Kazakhstan, acknowledged as the United States’ largest trading partner in Central Asia, is poised to face significant repercussions from introducing new tariffs set at 27%. In 2024, trade relations between the U.S. and Kazakhstan reached an impressive total of $3.4 billion, with $1.1 billion in U.S. exports to Kazakhstan and $2.3 billion in imports from Kazakhstan to the U.S. However, a statement from the Kazakh Trade Ministry indicates that exports to the U.S. primarily consist of crude oil, uranium, silver, and other raw materials, all exempt from these tariffs. In 2024, Kazakhstan exported only $95.2 million worth of goods, which will now incur surcharges – a relatively modest figure compared to the country’s overall foreign trade turnover of $141.4 billion. Trade analysts suggest that Kazakhstan has little cause for concern, viewing this situation more as a psychological impact than a serious economic threat. Resource-driven Central Asian economies, such as Kazakhstan, may even find enhanced opportunities in the expanding Asian market. Trade dynamics in Central Asia reveal a complex landscape, especially concerning the United States. In 2024, Uzbekistan managed to export a modest $42.4 million worth of goods to the US, a small fraction considering its total foreign trade turnover, which reached an impressive $66 billion for that year. This stark contrast highlights the limited engagement of Uzbekistan in the American market. With its total trade turnover of $16 billion in 2024, Kyrgyzstan similarly struggled with exports to the US, which amounted to merely $16.7 million. This reflects a broader trend where Central Asian economies exhibit low volume exports to the US, suggesting significant barriers or challenges in establishing a foothold in this lucrative market. Tajikistan's economic performance presented an even more sobering picture. Recording a total trade turnover of $8.9 billion, the country achieved only $4.6 million...