The US tariffs imposed by President Trump have led to a significant shift in global trade, with Southeast Asian economies emerging as beneficiaries due to their strategic positioning and lower tariffs, averaging 10% compared to the steep 40% tariffs on Chinese goods.
The year 2025 marked a pivotal moment in global trade as the US, under President Trump, imposed sweeping tariffs that upended trade relationships built over years of diplomacy. However, despite these challenges, global trade has shown resilience, with Southeast Asian economies being an unexpected beneficiary of this new landscape.
This phenomenon can be attributed to the strategic response of Chinese exporters, who have turned to transshipping as a means to reduce tariff payments. By routing goods through ASEAN countries before shipping them to the US, these exporters have capitalized on the lower tariffs applicable to ASEAN imports, which average 10%, significantly lower than the 40% tariffs imposed on Chinese goods.
Consequently, the US has seen a reduction in Chinese imports and an increase in imports from ASEAN countries. This shift has been accompanied by efforts from both the US and China to deepen their ties with Southeast Asia. President Trump has sought to diversify US supply chains by inking trade deals with four ASEAN countries—Thailand, Malaysia, Cambodia, and Vietnam—while China has signed an upgraded Free Trade Agreement (ACFTA 3.0) with ASEAN, solidifying its position as the region’s largest trading partner.
The impact of these developments on Southeast Asian economies has been positive, with the region experiencing steady growth. According to Maybank’s analysts, ASEAN’s growth in 2025 was resilient and largely unchanged from 2024, with the “fog of uncertainty from tariffs” dissipating. The negotiations between ASEAN countries and the White House resulted in tariff rates that were significantly lower than those initially threatened, further reducing the impact of the tariffs.
An Ongoing Shift to Dealmaking
As the US midterm elections approach in November 2026, President Trump is likely to focus on dealmaking and reducing economic uncertainty, according to Macquarie’s analysts. This shift has already begun, with the US inking a bilateral framework agreement with the EU in July and a deal to lower tariff rates for China in late October. Several other partners, including the UK and Japan, have also signed similar tariff-slashing deals.
Experts anticipate that despite these efforts, relations between the US and China will remain tense. The persistence of relatively high tariffs on China could lead to a further diversification of supply chains across Asia, with Chinese manufacturers shifting additional production to economies in the region. This ongoing shift underscores the dynamic nature of global trade and the importance of Southeast Asian economies in this new landscape.
For investors and businesses, understanding these trends is crucial. The resilience of Southeast Asian economies and their growing importance in global trade present both opportunities and challenges. As the world navigates this complex trade environment, staying informed about the latest developments and their implications is essential for making strategic decisions.
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