The 90-day grace period for the U.S. "reciprocal tariffs" will end on July 9. Asian exporters are pushing goods to U.S. customs at an unprecedented speed. In May, Taiwan's exports to the U.S. surged nearly 90%, while Vietnam and Thailand also posted year-on-year increases of 35%. South Korea’s exports to the U.S. continued to climb in the first 20 days of June. This “head start” has not only amplified the U.S. trade deficit but also raised concerns about a potential demand cliff once higher tariffs take effect.

Stockpiling Early Triggers Export Surge

Traditionally, Asia’s exports to the U.S. increase before the year-end peak season, but this year the tariff window has altered the usual rhythm. Fearing that the tariff rate may rise from the current 10% to 30–40%, companies are compressing three months’ worth of orders into one month, causing regional container shipping space to be in extreme short supply. U.S. importers are also expediting customs clearance to complete warehousing before tariffs go up.

Vietnam, Taiwan, and Thailand Take the Lead

Official data shows that in May, Vietnam’s exports to the U.S. reached USD 13.8 billion, while Thailand’s neared USD 8.5 billion, with both seeing a year-on-year increase of about 35%. Taiwan’s exports to the U.S. surged to USD 15.5 billion, a remarkable annual growth of 87.4%, pushing its total exports to a record high. These economies also posted record surpluses with the U.S., reflecting that “tax-avoiding orders” have become the main theme of this trading season.

Record Deficit Strengthens White House's Position

The market widely expects the U.S. goods trade deficit for May to expand to USD 91 billion. If this forecast holds, the cumulative shortfall for the first five months of 2025 will approach USD 643 billion, a new record for the same period in history. The rising figures have strengthened the Trump administration’s bargaining position of “using high tariffs to force concessions,” and have prompted Asian countries to speed up offering lists of increased imports and expanded investments during negotiations.

Cliff Risk After the July Window

According to multiple media outlets tracking the executive order text, the 90-day grace period will expire on July 9. CNA quoted senior Taipei officials as saying that if tariff rates are fully reinstated, levies of 32%–46% will swiftly erode corporate profits and push up U.S. end prices. APEC has lowered its GDP growth forecast for this year from 3.3% to 2.6% due to rising tensions, warning that policy uncertainty is dragging down regional growth. Once front-loaded exports exhaust future orders, Asian supply chains could face a sharp shock of “a surge followed by a cliff.”