DBS Group Research says a US court ruling overturns unilateral IEEPA tariffs on the ASEAN-6. These countries now face their MFN rates plus a global 15% tariff under Section 122 until July 2026, with possible legal challenges before then.<\/p>\n
Malaysia, Thailand, Vietnam and Indonesia would see lower effective tariff rates under the 15% levy. Global Trade Alert estimates reductions of about 1.7 to 3.2 percentage points (pp).<\/p>\n
Singapore\u2019s effective tariff rate would rise by about 1.1pp under the same framework. Even so, Singapore would still have the lowest effective tariff rate among the ASEAN-6.<\/p>\n
Sector-specific tariffs under Section 232 remain unchanged. Existing exemptions, including for semiconductors and non-branded pharmaceuticals, continue to apply.<\/p>\n
DBS keeps its regional economic projections unchanged.<\/p>\n
We are seeing a clear trade setup based on the recent US tariff ruling. The invalidation of the old IEEPA tariffs creates distinct winners and losers across the region for the short term. This policy shift directly impacts the export competitiveness of Malaysia, Thailand, Vietnam, and Indonesia relative to Singapore.<\/p>\n
For the coming weeks, we should consider going long on the currencies of the benefiting nations, particularly the Malaysian ringgit and the Thai baht. Thailand\u2019s exports to the US, which were over $50 billion in 2025, now face a more favorable rate, and we have already seen the baht strengthen from 35.2 to 34.8 against the dollar since the news broke. Derivative plays could involve buying call options on these currencies or on ETFs tracking their respective equity markets.<\/p>\n
In contrast, the outlook for Singapore is more neutral, as its effective rate has slightly increased. While it remains the most competitive in the bloc, the change erodes its relative advantage. A potential strategy is a pairs trade, favoring Malaysian or Vietnamese equities over their Singaporean counterparts, as this tariff change is not yet fully priced in.<\/p>\n
The most critical factor is the temporary nature of this new tariff system, which is set to expire in July and faces legal hurdles. This situation screams uncertainty, suggesting we should anticipate higher volatility in regional markets over the next five months. Buying straddles or strangles on major ASEAN equity indices could be a prudent way to profit from the expected price swings, regardless of the direction.<\/p>\n
We must also be selective, as exemptions for key sectors like semiconductors will mute the impact on certain stocks. The real opportunity lies in non-exempt manufacturing sectors, such as furniture in Vietnam and electronics assembly in Malaysia, which we saw react sharply to tariff news back in 2025. Therefore, derivative positions should be targeted at specific industries rather than just the broad market indices.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US court overturns IEEPA tariffs; ASEAN-6 now face MFN plus 15% Section 122 levy through July 2026.<\/p>\n","protected":false},"author":62,"featured_media":17027,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-42714","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42714","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=42714"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/42714\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/17027"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=42714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=42714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=42714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}