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...

Opinion – Storm Clouds Over Kazakhstan: Oil Slump and Global Risks Threaten Economic Stability

The persistent decline in Brent crude prices is the latest sign of a looming 'perfect storm' for Kazakhstan’s economy, the largest in Central Asia. With the mining sector comprising nearly half of its GDP and oil as a cornerstone resource, the nation’s economic stability is facing a cascade of potential shocks. Oil Prices and Budget Vulnerability Kazakhstan is grappling with significant economic headwinds amid forecasts of a global recession and declining energy prices. In April 2025, OPEC+, including Kazakhstan, unexpectedly agreed to raise oil production by 411,000 barrels per day, pushing prices below $65 per barrel. Given the country's reliance on hydrocarbon exports, such price drops jeopardize state revenues. Analysts say Kazakhstan needs oil prices to remain above $42.30 per barrel in 2025 to maintain fiscal stability. However, the threat extends beyond oil. As energy journalist Oleg Chervinsky noted on his Telegram channel, global commodity prices across the board are falling, a signal that recession is imminent. “The bad news for Kazakhstan is that prices are dropping not only for oil but for all raw materials,” Chervinsky wrote. “JP Morgan estimates the global recession probability at 60%. Even though oil and gas are exempt from Donald Trump’s new tariffs, the broader protectionist policies could fuel inflation, curb growth, and escalate trade tensions”. Trump's Trade War and Kazakhstan President Donald Trump’s sweeping tariffs are designed to limit low-cost imports and incentivize domestic production. Kazakhstan has been hit with a 27% tariff, the highest among the Central Asian nations. Its strategic location within China’s Belt and Road Initiative positions it as a potential re-export hub, prompting higher trade scrutiny. Kazakhstan’s Ministry of Trade and Integration has downplayed the immediate economic impact, noting that U.S.-bound exports account for less than 5% of total trade, and the country still holds a $1 billion trade surplus with the U.S. While the direct fallout may be limited, the broader implications of a global trade war could severely strain Kazakhstan’s economy. If a global recession takes hold, demand for Kazakhstan’s key exports, oil, uranium, and metals, will drop, dragging prices down further. Currency Pressures and Investor Retreat With shrinking export revenues, the tenge faces devaluation, leading to inflation, rising import costs, and weakened consumer purchasing power. In addition, recessions typically dampen foreign direct investment, especially in emerging markets like Kazakhstan, where perceived risk grows amid uncertainty. The China Factor The U.S.-China trade conflict is another critical variable. Trump’s strategy aims to undercut Beijing’s economic strength, but for Kazakhstan, China is its largest trading partner, representing over 15% of foreign trade. A slowdown in China would reduce demand for Kazakhstani raw materials and transit services. Such a downturn could also jeopardize President Kassym-Jomart Tokayev’s ambition to establish Kazakhstan as a vital trade corridor between China and Europe. While the Belt and Road Initiative is unlikely to collapse, reduced cargo flows would strain state revenues. China is also the primary buyer of Kazakhstan’s copper, aluminum, and ferroalloys. Any industrial slowdown there immediately impacts Kazakhstan's export volumes. Converging Risks Taken...