Southeast Asia, spooked by Trump tariffs, presses for more talks

By Orathai Sriring and Stefanno Sulaiman

BANGKOK/JAKARTA (Reuters) -Southeast Asia's biggest economies prepared on Tuesday to step up trade negotiations with Washington after it hit them with steep tariffs, despite a last-ditch flurry of offers to boost imports and slash levies on U.S. goods.

Regional nations are among the hardest hit by President Donald Trump's sweeping tariffs, as they rely on exports and manufacturing to drive economies collectively worth more than $3.8 trillion, some helped by supply chain shifts from China.

Unchanged tariff rates of 32% for Indonesia and 36% for Thailand from August 1 came despite late efforts to beef up proposals such as promises to ramp up purchases of U.S. goods and eliminate tariffs on a wide range of U.S. imports. 

Details of the scope of the tariffs were not immediately clear. Malaysia, a key exporter of semiconductors and electronics, faces a levy of 25%, up from 24% threatened in April, before Trump called a 90-day pause.

Thai Finance Minister Pichai Chunhavajira, who made a proposal to U.S. officials after a visit to Washington last week, said he was "a little shocked" at his country's rate of 36%, but was ready to offer more to its biggest export market. 

"The United States has not considered our latest proposal," he said in a post on X. "We will find more measures and find more solutions. So be confident we will fight to the end, so that Thailand will have the best offer possible."

RAFT OF CONCESSIONS

The broader tariff rates came after Trump unveiled a trade pact last week following rounds of talks with regional manufacturing powerhouse Vietnam that yielded it a levy of 20% on most exports and 40% on transshipped goods.   

Indonesia, Southeast Asia's biggest economy, said its top negotiator Airlangga Hartarto was en route to Washington on Tuesday from a Brazil summit of the BRICS grouping and would hold talks with U.S. officials right away.

"There is still space for negotiations," said Haryo Limanseto, a spokesperson of the coordinating ministry of economic affairs. "The Indonesian government is maximising those negotiation chances." 

G20 economy Indonesia had offered Washington a raft of concessions early on in talks, plus offers to boost investment in the United States.

More recently it has made a slew of offers to buy more energy, commodities, and aircraft from American companies in a deal that could go as high as $34 billion. 

Yet the tariffs could still prove expensive for the world's biggest exporter of palm oil, which supplies about 85% of U.S. imports of the edible oil.

U.S. shipments could fall 15% to 20% because of the tariffs, and cost Indonesia the loss of market share to rival Malaysia, as well as other vegetable oils, Hadi Sugeng, the secretary general of its palm oil association, told Reuters.

Thailand, the world's second largest exporter of rice, could also suffer a 20% reduction in demand from the U.S. market, its rice exporters' association said, while facing greater competition from third-largest shipper Vietnam.

Among the region's few gainers since April 2 was Cambodia, with its tariff reduced to 36% from 49%, after U.S. talks that aimed to protect its crucial garments and footwear sector. 

Malaysia is keeping up efforts to negotiate and clarify the scope of tariffs, its trade ministry said.   

"Malaysia is committed to continuing engagement with the U.S. towards a balanced, mutually beneficial, and comprehensive trade agreement," the ministry added. 

(Reporting by Orathai Sriring and Panarat Thepgumpanat in Bangkok, Stefanno Sulaiman, Stanley Widianto, Fransiska Nangoy and Gibran Peshimam in Jakarta and Rozanna Latiff and Danial Azhar in Kuala Lumpur; Writing by Martin Petty; Editing by Clarence Fernandez)