Published by AstroAwani, TheStar, Mysinchew, NST Online & NST image by AstroAwani
The U.S. has quietly lowered its so-called “reciprocal tariffs” for a select group of countries. But as rates drop, the real cost may be rising—in market concessions, policy shifts, or even access to strategic resources. In a world of coercive trade diplomacy, the real cost of tariff relief may not be measured in percentages, but in sovereignty.
When Washington announced tariff reductions for a select group of nations this August—cutting average rates from 26% to 19%, based on a comparison of the April and August 2025 schedules—the meagre 7% drop was quickly labelled a “breakthrough” by some. But this feudal framing, often echoed in elite circles of affected countries, reflects less a strategic gain than a lingering deference to global economic hierarchy. For nations like Vietnam, Pakistan, Indonesia, and several in Africa, it appeared to be a rare reprieve from a system that could hit many of them hard.
But beneath the surface, a more uncomfortable question looms: what exactly was exchanged for those reductions?
From the beginning, Trump’s “reciprocal tariff” regime has been less about economics and fairness than about leverage. It promised flexibility, but only in return for cooperation—defined on Washington’s terms. In such a system, every percentage point off the tariff rate hints at a deal, and every deal may come with strings attached.
Some countries are suspected of having offered expanded market access. Others may have relaxed investment restrictions or opened their resource sectors. In certain cases, the pattern is more suggestive still—tariff relief appears closely linked to geostrategic positioning and raw material assets.
Resource Diplomacy in Disguise
In transactional geopolitics, tariffs are no longer just economic instruments—they have become negotiating levers. In a July 2025 interview, Trump’s top economist Stephen Miran outlined a strategy Stephen Miran, openly describes the strategy as one of forcing supply chain realignment through disruption, arguing that the U.S., as the world’s dominant buyer, can compel foreign producers to absorb tariff costs or lose market access. But this logic of “the customer is always right” reveals the deeper risk: in such a system, compliance is incentivised not by rules, but by pain.
What began as a bold, maximalist tariff regime has quietly evolved into something more subtle—and more dangerous: a price tag for cooperation.
The August revision patterns appear to confirm this. Countries like Vietnam, Indonesia, Pakistan, Angola, and Guyana—many with strategic minerals, oil reserves, or geographic leverage—saw notable tariff reductions, often without formal trade agreements. What links them is not necessarily tariff parity with the U.S., but potential alignment in resource flows, logistics, or policy space.
Take Pakistan, whose revised rate dropped from 29% to 19%. It holds vast reserves of shale oil, technically recoverable but historically underdeveloped. Recent commentaries from energy experts in the region have suggested that U.S. interest in Pakistan’s oil potential could reshape its energy trajectory—if “serious intent and capable partners” step in.
Similarly, several Southeast Asian economies with valuable critical minerals, especially those linked to semiconductor and clean tech supply chains, have seen adjustments. While direct trade-offs are rarely public, the clustering of concessions suggests a possible correlation with geostrategic priorities, regulatory alignment, or resource leverage.
Even technologically advanced economies like South Korea (critical to global semiconductor supply chains) reportedly negotiated “a deal” (Reuters, July 2025), underscoring that tariff relief may not only be about resource wealth, but also strategic alignment.
Whether formal or informal, the signal is consistent: tariff relief increasingly appears to shadow geostrategic alignment.
The Real Danger: Silent Sovereignty Loss
At face value, a reduction from 26% to 19% may seem benign—even beneficial. But when those cuts follow opaque negotiations, are accompanied by sudden shifts in market access, and appear to be particularly clustered among resource-rich nations (using April and August 2025 tariff tables side-by-side).
Trade deals built on transparency and reciprocity serve mutual interests. But if these revisions were accompanied, formally or informally, by sweeping market access, preferential terms for U.S. firms, or implied resource arrangements, then the benefits may be less favourable than they appear. Worse still, the political costs—in terms of regulatory autonomy, industrial policy, and public trust—may emerge only later.
In some countries, analysts have already raised red flags. The entry of thousands of U.S. products, ranging from pork and grain to machinery and chemicals, has the potential to undermine local producers, especially if zero-rating is granted without proper prior assessment and adequate safeguards. The irony is sharp: tariff reductions granted on exports may be matched by tariff eliminations on imports, leading to asymmetric benefits and distorted competition.
Meanwhile, fragmented global supply chains mean that products manufactured locally, especially upstream components like raw materials and subassemblies, are taxed abroad, only to return as imports at inflated prices. As some analysts aptly put it: “Made here, taxed there, sold back at triple the price.” That dynamic doesn’t just affect trade. It affects inflation, industrial policy, and national self-determination.
What Affected Countries Must Do Now
Rather than seeking short-term relief at uncertain long-term cost, nations facing this new tariff logic must respond with strategic clarity and assertiveness. That includes:
- Demanding full public transparency on any tariff concession deals. Concessions, especially involving resources or market access, must be openly debated and disclosed to the public. Silent diplomacy may win short-term reprieve but erodes public trust and national leverage in the long run.
- Capture as much value as possible onshore by building up domestic value chains in critical sectors. This means more than just refining or R&D. It requires a structural shift away from raw-material dependency toward high-value production. Countries that export crude palm oil, for instance, should be developing their own industries in cosmetics, biofuels, or processed food products. Those with rare earths must not stop at mining but invest in local refining, magnet manufacturing, and chip inputs. Import substitution and industry diversification are not protectionist relics; they are essential. They create jobs, build resilience, and reduce vulnerability to external shocks. If global powers want access to strategic resources, they should invest in the full ecosystem—not just extract raw inputs. Public-private partnerships must include localisation clauses, IP co-ownership, and workforce upskilling to ensure lasting national benefit.
- Auditing tariff concessions granted to major partners. Zero-rated access may benefit consumers in the short term but could devastate local SMEs if not counterbalanced by strategic protections and competitiveness reforms.
- Strengthening collective negotiation platforms, whether through BRICS+, ASEAN, or regional alliances. Tariff diplomacy is harder to weaponize when met with coordinated, rules-based responses—especially when those blocs represent a rising consumer base of 4.6 billion, far surpassing the U.S.’s 347 million. And within that U.S. market, where 85% of households now require financial aid, the capacity to absorb cost shifts is rapidly eroding. Even Trump’s own economist, Stephen Miran, admits the strategy depends on foreign producers capitulating to a buyer that may no longer be able to buy.
The revised tariff rates under Trump’s regime may bring temporary relief. But for many countries, the bigger question isn’t what they saved. It’s what they gave away.
In a world where geopolitical bargains are increasingly disguised as technical trade deals, vigilance is not optional. It is strategic necessity.
In this emerging “discount-for-compliance” model, sovereignty is not revoked outright—it is diluted incrementally. Through hidden clauses, opaque concessions, and industrial vulnerabilities traded for geopolitical quiet.
The real challenge for middle and emerging powers is to ensure that national assets, be they markets, minerals, or policy autonomy, are never exchanged without consent, scrutiny, and long-term vision. Because once given away quietly, reclaiming them is never easy.
In a multipolar world, survival belongs not to the compliant, but to the coherent, the transparent, and the truly sovereign.
Dr Rais Hussin is the Founder of EMIR Research, a think tank focused on strategic policy recommendations based on rigorous research.
