Chinese Checkers: Why the US Needs to Be Cautious With Its Tariff Card in Asia

It takes two to tango! And the United States and the Philippines just danced their way into a breakthrough.

In a telling shift for Southeast Asia, President Donald Trump's announcement of a new trade agreement with Philippine President Ferdinand Marcos Jr. signals a major recalibration in the region's economic alignments. This isn't just a bilateral milestone, it's part of a broader global realignment.

And yes, China is watching. Very closely.

Deal Done: The Fine Print

The United States will impose a 19% tariff on all goods imported from the Philippines. This is a direct charge to American businesses importing Filipino products.

In return, the Philippines has committed to zero tariffs on American goods, providing a notable advantage for US exporters seeking access to the Filipino market.

The deal comes after months of rapidly escalating tariff threats, which saw proposed Philippine tariffs rise as high as 20% before this compromise.

Sample This: Deals with Japan, Indonesia

In a parallel move, the US recently struck a deal with Japan to reduce tariffs from the initially threatened 25% down to 15% on Japanese imports, including autos, which are pivotal to Japan's export economy.

The reason: Start on a high note, then climb down to do the usual business. This way, US tries to convey- Who is the Boss!

In recent months, the United States has brokered several significant tariff agreements across Asia, signaling a distinct shift in its trade posture.

Initially, the US threatened steep tariffs-up to 20% on goods from the Philippines, 25% for Japan, and as high as 32% for Indonesia-as part of its hardline negotiating strategy. Ultimately, each country secured a lower tariff rate: the Philippines settled at a 19% tariff on its goods, with the notable advantage of zero tariffs on American exports in return. Japan saw its tariff rate reduced to 15% and, in exchange, committed to substantial investments in the US market and greater openness to American agricultural imports. Indonesia, facing a 32% threat, negotiated its rate down to 19% while also agreeing to purchase more US energy and farm products. These deals reflect a transactional approach by Washington, seeking not only to secure better market access for US goods but also to extract broader economic and strategic concessions from its Asian partners. The pattern show Washington's use of tariff pressure both as leverage in securing reciprocal trade benefits and as part of a broader effort to rebalance economic influence in the region, with China watching from a distance.

So What Exactly is the US Strategy?

The United States appears to be leveraging high tariff threats as bargaining chips-offering lower rates in exchange for open markets, large investment pledges, and increased US exports.

By reducing tariffs for allies like Japan and extracting reciprocal concessions, the US asserts a transactional and 'America First' approach.

The considerable tariffs, even after reductions, are still above historical averages and represent a dramatic shift from past trade liberalisation.

Countering China

These deals take place against a backdrop of rising US-China rivalry.

President Trump and top officials have openly described China as a strategic threat, while Southeast Asian nations like the Philippines remain security partners for Washington.

By pressuring Asian economies with tariffs, the US aims to pull supply chains away from China and force countries to pick sides, incentivising deeper defense cooperation as seen with the Philippines.

In this maze of the Chinese Checkers, Beijing meanwhile, remains the region's largest trading partner. Many ASEAN countries are seeking pragmatic balance. Why? The simple reason is- Avoid a full pivot toward either superpower. Staying the middle for that fine balance.