Growth to take a hit
A recap of US tariffs on the table and when they took effect or are due to
Trump’s tariff timetable
What Trump’s tariff tango means for South-east Asia
FEB 4
10% on imports from China
MAR 4
25% on imports from Canada, Mexico
(suspended till Apr 2 as at Mar 6)
Additional 10% on imports from China
MAR 12
25% on global steel and aluminium imports
APR 2
Trump to announce reciprocal tariffs worldwide after investigations by his administration on the levies conclude
A widening trade deficit is Trump’s bugbear. As the US gets tough on its two largest trading partners, Canada and Mexico, South-east Asia is in the clear – for now.
All Asean members—except Singapore—have a merchandise trade surplus with the US. Countries with substantial surpluses or those serving as tariff circumvention hubs for Chinese firms are likely to face heightened scrutiny. Vietnam remains the key country to watch.
Asean’s merchandise trade surplus with the US under fire
Fixing the trade deficit as a means of staying out of Trump’s eyeline will be difficult for South-east Asian economies, whose trade surpluses with the US form a significant percentage of their respective GDPs, said Morgan Stanley analysts.
Since Asia runs a commodity trade deficit with a larger oil and gas deficit than that of coal and agricultural products, there may be greater scope for the region to increase oil and gas imports from the US, they noted.
For high-tech equipment categories (think defence equipment, civilian aircraft and parts and semiconductor manufacturing equipment), there may be scope for economies to increase purchases, said the analysts.
Plugging the deficit
Reciprocal tariffs are another thing to watch for as Trump pledges to stamp out what he deems unfair trade practices.
Across 132 countries and more than 600,000 product lines, US exporters face higher tariffs more than two-thirds of the time, a Feb 13 factsheet posted on the White House website cited an unnamed 2019 report as stating.
In Asean, Thailand has the highest tariff gap with the US, noted a Feb 24 report by BofA Securities. The main products subject to higher import tariffs relative to the US include meat, vegetables and fruits, food products and transportation vehicles.
Tariff gaps in the spotlight
Considering both trade deficits and tariff gaps, here are the sectors most exposed to tariff
threats for each of the main six Asean economies, as flagged by OCBC economists.
The Feb 25 report noted that Vietnam has the largest share of exports to the US and the widest trade deficit, making it vulnerable to tariffs. This is followed by Thailand, Malaysia, Indonesia and the Philippines.
Hardest-hit sectors
US trade balance with Asia
Note: US-side data used for consistency; data as at 2024 full year; products based on HS 4-digit classifications
The first wave of 25% tariffs on Canada and Mexico took effect on Mar 4 but was delayed on Mar 6 for a month under the US-Mexico-Canada Agreement rules.
Trump’s tariffs on the US’ two largest trading partners are unlikely to have a dramatic impact on South-east Asia directly, but pundits say this is just his opening act. Watch for secondary shockwaves percolating through the US and dampened regional growth from disrupted trade flows.
For more, read: Trump tariffs on North America hint at first stirrings of what’s to hit South-east Asia
The gathering storm of North America tariffs
Animal
Chemical
Food product
Footwear
Fuels
Hides and skins
Machinery and electronics
Metals
Minerals
Miscellaneous
Plastic and rubber
Stone and glass
Textiles and clothing
Transport
Vegetable
Wood
US runs deficit; tariff gap >10 %pt
US runs deficit; tariff gap 5 - 10 %pt
US runs deficit; tariff gap 0 - 5 %pt
US runs surplus
LEGEND
India
Thailand
Vietnam
Indonesia
Malaysia
The
Philippines
Singapore
SOURCE: WORLD INTEGRATED TRADE SOLUTION, OCBC
SOURCE: US INTERNATIONAL TRADE COMMISSION DATAWEB, MORGAN STANLEY RESEARCH
SOURCE: US CENSUS BUREAU
SOURCE: ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, BOFA GLOBAL RESEARCH ESTIMATES
SOURCE: COUNCIL ON FOREIGN RELATIONS, UN COMTRADE
Note: Products are classified using the HS4 designation
SOURCE: COUNCIL ON FOREIGN RELATIONS, UN COMTRADE
GRAPHICS: charmaine martin
US runs deficit; tariff gap >10 %pt
US runs deficit; tariff gap 5 - 10 %pt
US runs deficit; tariff gap 0 - 5 %pt
US runs surplus
LEGEND
Animal
Chemical
Food product
Footwear
Fuels
Hides and skins
Machinery and electronics
Metals
Minerals
Miscellaneous
Plastic and rubber
Stone and glass
Textiles and clothing
Transport
Vegetable
Woods
SOURCE: WORLD INTEGRATED TRADE SOLUTION, OCBC
India
Thailand
Vietnam
Indonesia
Malaysia
Singapore
The
Philippines
SOURCE: COUNCIL ON FOREIGN RELATIONS, UN COMTRADE
SOURCE: WORLD INTEGRATED TRADE SOLUTION, OCBC