Why Trump's tariffs haven't derailed Southeast Asia's exports to the US
New Delhi, Jan 6, 2026
US trade data show exports from Southeast Asia to America have risen despite Donald Trump's tariffs, supported by tech demand, lower manufacturing costs and the rerouting of goods from China
When US President Donald Trump announced reciprocal tariffs last year, the move was intended to disrupt global trade and pressure major exporting nations into compliance with Washington’s demands. However, fresh data shows that Southeast Asia has so far avoided the worst effects of the tariff push, with exports to the US holding up on the back of strong technology demand, competitive manufacturing costs and a steady rerouting of goods away from China.
How were Southeast Asian economies expected to take a hit?
In April 2025, Trump announced “reciprocal” tariffs of up to 49 per cent on several Southeast Asian manufacturing hubs, sparking fears of a sharp slowdown in exports from the region. The concern was that higher duties would undermine the cost advantage that had made Southeast Asia an alternative production base for global companies.
Although these tariffs were later reduced to around 20 per cent following negotiations with Washington, uncertainty persisted, especially for export-heavy economies dependent on the US market.
What do the latest export numbers show?
The data point to resilience rather than contraction. According to figures from the US Census Bureau cited by the Financial Times, goods exports from Southeast Asia to the United States rose 25 per cent between July and September compared with the same period in 2024.
This came even as Chinese exports to the US fell sharply. Shipments from China were down 40 per cent year on year in the third quarter of 2025. Overall Asian exports to the US, however, remained broadly stable, suggesting that production has been redirected within the region rather than lost altogether.
How is ‘China plus one’ shaping trade flows?
The continued use of 'China plus one' strategies, where companies retain operations in China while expanding capacity elsewhere, has been a key factor. These strategies gained momentum during Trump’s first presidency and have remained in place.
According to Capital Economics data cited by the Financial Times, trade rerouting from China reached an all-time high of $23.7 billion in September. Industry estimates indicate that indirect exports from China to the US are now comparable in size to direct trade between the two economies.
Which countries are seeing the biggest gains?
Cambodia has recorded the sharpest rise in rerouted trade, according to the report. Capital Economics estimates that indirect Chinese exports to the US routed through Cambodia were 73 per cent higher in September than a year earlier.
Despite facing a 49 per cent tariff in April, later cut to 19 per cent, Cambodia’s garment sector has continued to expand. Clothing is its largest export to the US, and exports of knitted garments rose by about a quarter between the third quarters of 2024 and 2025, according to Trade Data Monitor.
Industry executives told the Financial Times that margins have been squeezed as US buyers seek discounts, but foreign investment has continued, much of it from mainland Chinese companies.
Other countries have also benefited. Vietnam posted a record $121.6 billion trade surplus with the US in the first 11 months of 2025. Thailand, meanwhile, saw imports from China jump 34 per cent in October, while its exports to the US rose 33 per cent.
What role is US tech demand playing?
Strong US demand for electronics has provided an additional buffer for Southeast Asian economies navigating tariff uncertainty. Many technology-related exports, including semiconductors, chipmaking equipment, computers and smartphones, have been exempted from tariffs.
According to the Financial Times, exports of electronic goods from Asia are growing at around 40 per cent year-on-year, faster than during the pandemic-driven surge.
[The Business Standard]
