Trump Tariffs and Chinese Exports Pressure Southeast Asian Economies

The second trade war led by Donald Trump has placed significant economic pressure on Southeast Asian nations, which now face a dual crisis of U.S. tariffs and a surge of Chinese imports. In April, the U.S. government implemented liberation day tariffs, initially setting duties as high as 49 percent on Cambodia and 46 percent on Vietnam, though some rates were later reduced to 10-20 percent through individual negotiations.

To further prevent the avoidance of tariffs on Chinese products, the White House added a 40 percent tariff on transshipments in July. These measures coincide with a 12 percent increase in Chinese exports to the Association of Southeast Asian Nations in 2024, as China seeks alternative markets to the U.S. This shift has led to concerns regarding economic distortions and the dumping of goods within the region.

The cumulative effect of these trade tensions has impacted regional outlooks. The Asian Development Bank responded to the volatility by lowering its growth forecasts for Southeast Asia to 4.3 percent for 2025 and 2026.