Trump's new tariff strategy raises concerns among Southeast Asian exporters facing uncertainty over tariffs and rules of origin.
Trump's New Export Tariffs
President Trump announced new tariffs of 20% for Vietnam and 19% for Indonesia and the Philippines. These measures affect most exports from Southeast Asia, which total about $352 billion annually to the U.S.
Lack of Clarity in Rules
Trump's administration proposed a 40% tariff on goods that are labeled as transshipped, meaning Chinese goods rerouted through other countries. However, it remains unclear how the U.S. will determine what qualifies as such.
Products Dependent on Chinese Components
According to Eurasia Group estimates, 60% to 70% of exporting goods from Southeast Asia depend on Chinese components. While countries in the region attempt to comply with new requirements, such as increasing local content, the transparency and feasibility of these changes are in question.
In the face of uncertainty caused by Trump’s new tariff strategy, Southeast Asian countries are striving to adapt to new rules, yet clear guidance remains lacking, creating significant tension in the region.
