The US government’s recent decision to pause its reciprocal tariffs for 90 days, announced on April 3, has provided a temporary respite in ongoing trade tensions. However, the effects of the proposed tariff changes on the Asia-Pacific region could still be profound.According to S&P Global Market Intelligence, this pause "Allows room for bilateral negotiations" but underscores that the "Combined universal and country-specific reciprocal tariffs of up to 49% would have a sizable impact on Asia-Pacific economies and supply chains."Currently, the only active tariff affecting all trading partners, excluding Canada, mainland China, and Mexico, is a "10% universal tariff." If all tariffs were implemented, the US's average effective tariff rate on the Asia-Pacific region (excluding mainland China) would increase “to 30.3%, up from 1.9% in 2024.”Vietnam stands out as the most vulnerable country in the region. The report states, "Vietnam would be by far the most exposed market," with its average effective tariff rate rising from "3.8% in 2024 to 49.1%," translating into "additional tariffs estimated at nearly 10% of GDP." This could have severe implications for Vietnam's export-driven economy, particularly in industries like textiles and electronics.India, while impacted, faces a "relatively moderate" increase in tariffs. The report notes that the average tariff rate for India would increase "from 2.4% in 2024 to 24.4%," but the "additional tariff cost to its economy would be relatively moderate" due to India's reliance on domestic demand for growth and its "tariff advantage relative to its regional competitors." The analysis also highlights that the "greater risk lies in the broader spillover effects on global demand and financial markets."Other countries in the Asia-Pacific region would also experience varying levels of impact. "The potential costs of additional tariffs for other Asia-Pacific economies would range between an estimated 0.1% of GDP for Australia to 5.6% for Cambodia."Specific sectors are at risk, with the report noting that "the greatest impact [would be] felt in industries such as low-cost apparel and consumer goods manufacturing in South and Southeast Asia, electronics in Taiwan, and automobiles in South Korea and Japan."The report suggests that one possible outcome of these tariff hikes could be "increased trade and investment regionalization," which might help offset some of the direct tariff impacts over time.However, this shift in trade dynamics would not be without challenges, "regionalization could lead to new complexities as businesses adjust to a more localized supply chain structure."While the 90-day pause in tariffs offers temporary relief, the analysis warns that the long-term consequences could still be significant. "The knock-on effects of these tariffs could include increased trade and investment regionalization, potentially offsetting some of the direct tariff impacts over time."Countries across the Asia-Pacific region will need to prepare for potential disruptions, with industries ranging from apparel to electronics facing substantial risks.