A proposal by Mr. Trump makes Southeast Asia "tremble", unexpectedly big benefits

Southeast Asia is bracing for new tariffs and a shift in relations with the United States following Donald Trump’s re-election as president. Could the return of “Tariff Man” bring economic risks or unexpected opportunities for the region?

Almost all Southeast Asian countries count the United States as one of their top three export markets. The new tariffs that Mr. Trump announced during his election campaign are a terrifying proposal for Southeast Asia. Illustration photo. (Source: Getty Images)

During his election campaign, Mr Trump vowed to impose across-the-board tariffs of 10-20% on imports from all countries – a terrifying proposition for Southeast Asia, a region heavily dependent on exports to the US.

The tax rate is much higher than the 7.5% to 25% tax rate he imposed during his first term.

With China, the new White House owner announced that he will impose taxes of up to 60%.

Not just a commercial risk

Dr. Le Hong Hiep, a research expert at the Vietnam Studies Program at the Institute of Southeast Asian Studies, said that Southeast Asia had previously cooperated with the US when Mr. Trump was president. That means the region was prepared when Mr. Trump returned to the White House.

With the victory of Mr. Trump - the self-proclaimed "tariff man", the Southeast Asian region will quickly adapt to the new reality and find a way to protect its interests," according to Dr. Le Hong Hiep.

Meanwhile, Mr. Bridget Welsh - honorary research associate of the Institute of Asian Studies at the University of Nottingham Malaysia said that Mr. Trump's second presidential term will impact countries in different ways.

Some countries are focused purely on commercial aspects, while others like the Philippines or Malaysia will face “security risks”.

Still, most Southeast Asian countries are net exporters to the world's largest economy, so they would face certain consequences if Mr. Trump followed through with his promised tariffs.

Consulting firm Oxford Economics recently estimated that Mr Trump’s proposed tariffs could be a “headwind” that would reduce exports from “Asian countries excluding China” by 3%. Poorer economies in Southeast Asia could see a bigger drop.

Frederick Kliem, a research fellow at the S. Rajaratnam School of International Studies (Nanyan Technological University, Singapore) emphasized: "If Mr. Trump imposes tariffs, Southeast Asia will suffer losses in terms of Gross Domestic Product (GDP) and trade as a share of GDP."

Big benefit?

The above trade impacts could be balanced if the new White House chief launches a second trade war with China.

Specifically, some experts believe that the 47th president of the United States' threat to impose a 60% tax on imports from China could trigger a wave of global companies to divest from the country. The same thing happened after the Trump administration began a "wave" of tariffs on Chinese goods in 2018.

It is worth noting, however, that some Southeast Asian countries stand to benefit the most from the aforementioned wave of investment flight.

Southeast Asia is likely to benefit from the trade conflict between the world's two largest economies, Reuters news agency reported.

According to the news agency, developers of the area's industrial parks are recruiting more Chinese-speaking staff. "This is a forecast that Mr. Trump may rearrange the global supply chain after taking office in January 2025," Reuters wrote.

Ms. Jareeporn Jarukornsakul, CEO of WHA Group - one of Thailand's largest industrial park developers - revealed that when Mr. Trump was preparing for his presidential re-election campaign earlier this year, calls from Chinese customers flooded WHA Group.

“There has been a wave of migration to Southeast Asia and the wave will be stronger than in 2017-2021,” said Jareeporn Jarukornsakul.

Source: https://baoquocte.vn/hau-bau-cu-my-mot-de-xuat-cua-ong-trump-khien-dong-nam-a-run-ray-loi-ich-lon-bat-ngo-293413.html