US tariff letters ignite fresh concerns: Amundi

Yasmine Raso

Senior Journalist, Financial Newswire

25 July 2025

The Trump administration’s levying of adjusted tariff rates on certain trade partners, to come into effect from 1 August, has sparked fresh concerns over stalling economic growth.

The latest commentary from the Amundi Investment Institute indicated that the estimated GDP loss from tariffs imposed by the US at more than 10 per cent varies from 0.2 to 3.0 across Asia, with Thailand at the top (3.1) closely followed by Vietnam (3.0).

South Korea still takes quite a hit at 1.1, with the Philippines (0.3), Japan (0.2) and Indonesia (0.2) also following.

This comes as the letters also include a clause that inflicts a higher tariff on transshipment, with Vietnamese-origin cargo considered to be transshipped goods subject to a 40 per cent tariff.

“While final tariff levels remain highly uncertain, it is worthwhile to begin assessing their impact on growth through trade channels across countries,” Alessia Berardi, Head of Emerging Macro Strategy at the Amundi Investment Institute, said.

“Asia is particularly affected. Despite the challenges in enforcing transshipping tariffs, medium and small open economies in the region face significant growth impacts, as they bear among the highest tariff rates in the new letters of intent.

“However, the situation remains fluid. Indonesia is a case in point, seeing a tariff reduction from 32% to 19% on the back of a deal to lower its own tariffs on the US and reduce its trade surplus. Japan also managed to reach a deal a few days after its upper house election, lowering the tariff from 25% to 15%.”

Europe also saw higher tariffs imposed in the recent letters sent out (30 per cent) than on ‘Liberation Day’ (20 per cent), with an expected GDP loss of 0.4. Brazil was also one of the hardest-hit countries, with a 50 per cent tariff contained in the letter – significantly higher than the 10 per cent imposed on Liberation Day.

“Regarding Europe, the implementation of higher tariffs from 1 August is likely to cause a contraction in economic activity, potentially reducing growth by an additional 0.3% to 0.4% through the trade channel between the second half of 2025 and the first half of 2026,” Berardi said.

“With the latest tariff letters, the effective average tariff rate in the US is expected to rise from the current 15% to a range of 17% to 20%. This increase could negatively impact US GDP by approximately 0.4% and raise the core Personal Consumption Expenditures inflation rate by about 0.2%.

“Concerning inflation in the rest of the world, in the absence of significant retaliatory measures, persistent supply chain disruptions, and
weak currency trends, price dynamics are expected to remain subdued due to weaker demand.”