The re-election of Donald Trump as the subsequent president of the United States last November revived the “Make America Great Again” slogan, raising fears and expectations about what is going to come next.
One of the highly anticipated moves of the incoming Trump administration concerns import tariffs. During his first term, the 78-year-old real estate tycoon imposed tariffs on many industries, comparable to 25% import tariffs on steel and 10% on aluminum from various countries comparable to the EU, Canada and Mexico.
Southeast Asia is more likely to be vulnerable to the impact of tariff policies in light of the International Monetary Fund (IMF) forecast that the ASEAN economy will grow by 4.5% in 2025.
“I can’t say that Trump’s tariffs won’t have an impact on ASEAN, given that he’s targeting Vietnam due to the country’s trade surplus with the U.S.,” said Stephan Becker, a world trade expert and attorney at Pillsbury Winthrop Shaw Pittman LLP in an interview, Wednesday (December 11).
Official data showed that Vietnam recorded a trade surplus in the primary decade of 2024, which amounted to roughly $102 billion (up 20% from the previous 12 months). Becker said that within the case of nations which have a surplus in comparison with the US, the long run president may suspect that they’re helping Chinese corporations.
Meanwhile, UOB ASEAN economist Enrico Tanuwajaya said in a discussion on Thursday (December 5) that Vietnam might be the ASEAN-6 country with the very best growth (6.6%) in 2025, followed by the Philippines (6.5%), Indonesia (5.3%). %), Malaysia (4.7%), Thailand (2.9%) and Singapore (2.5%).
An enormous opportunity for the ASEAN manufacturing sector
Despite the wave of tariffs imposed by Trump, ASEAN countries stand to profit from the situation, reflecting Southeast Asia’s vital role in global trade.
“ASEAN countries could benefit from Trump’s tariff policies as many companies move their factories from China to Southeast Asia. This change comes as Trump’s tariffs on China make it more expensive to import from there. As a result, countries like Vietnam, Thailand and Cambodia have seen production increases as companies try to avoid these tariffs,” Becker said.
Relocating manufacturing centers to ASEAN countries comparable to Indonesia, Malaysia and Vietnam could be the best alternative as a result of competitive labor costs and growing infrastructure, resulting in increased foreign direct investment (FDI) and opening up employment opportunities within the region.
The value of the ASEAN manufacturing sector is predicted to extend from PLN 1,700. dollars in 2018 to 2.3 thousand dollars by 2029, strengthening its position in the worldwide supply chain, based on Statista.
The IMF said the US-China trade dispute – sparked by Trump’s suspicions over China’s deficit that led to a rise in import tariffs starting in 2018 – is not going to have a serious impact on ASEAN because the bloc has adapted and cooperated well with each world economic powers .
“Despite geopolitical tensions, ASEAN continues to strengthen trade and investment ties with both China and the US,” the report said.
What to expect
Despite the chance for ASEAN as a possible production center, Trump will investigate all countries suspected of making the most of the situation, for instance within the solar panel industry.
In 2017, Suniva filed a petition over a surge in low-cost imports that resulted in significant job losses and reduced production capability. The company demanded protection under Art. 201 of the Trade Act, which allows for the introduction of import duties to guard domestic employees.
SolarWorldAmerica later joined Suniva, resulting in the announcement of tariffs on imported solar panels a 12 months later.
ASEAN can eliminate trade barriers between members and strengthen cooperation with major economies comparable to South Korea, Japan, India and the European Union (EU), reducing dependence on US markets.
“Efforts should be made to promote economic integration through reduced non-tariff measures, improved trade facilitation and better coordination of regional value chains,” said Jaideep Singh, an analyst on the Institute of Strategic and International Studies in Malaysia.
