Page 9 - Policy Economic Report - December 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Figure 4: US federal funds rate over previous 10 years

Source- Fed Reserve Bank

3. Recent US tariff cuts offer some relief for Developing Asia
The United States (US) has eased its tariff policy further since September. Following a sharp increase since
February and a spike in April, US tariffs settled at historically high levels in August and September. Trade
deals and further adjustments brought the US effective tariff down to 15% by mid-November, from 17%
in September.

Notably, the “Fentanyl-related” tariff on the People’s Republic of China (PRC) was cut from 20% to 10%
on 10 November. This lowered the effective tariff applied on imports from the PRC from 49% to 39%,
though it remains about 18 percentage points higher than at the end of 2024.

The trade deal with the Republic of Korea, formalized on 13 November, cut the automobile tariff from
25% to 15%, aligning it with the tariff applied on automobile imports from the European Union and Japan.
Finally, the US rolled back tariffs on 237 food products on 14 November.

While these new exemptions have slashed effective tariffs for Papua New Guinea, Samoa, and Timor-
Leste, the effect for developing Asia will be marginal as these products account for less than 2% of the
region’s exports to the US. Even after these adjustments, US effective tariffs on developing Asia remain at
27%, well above the 15% on the rest of the world and still up by 17 percentage points compared to the
end of 2024.

November 2025 Page | 8