Navigating the Trade Turbulence: Southeast Asia Struggles with US Tariff Policies**

Sat Aug 02 2025 01:17:44 GMT+0300 (Eastern European Summer Time)
Navigating the Trade Turbulence: Southeast Asia Struggles with US Tariff Policies**

Amidst US tariffs, Southeast Asia's export-driven economies, especially Thailand and Vietnam, confront intense negotiations while facing political and business challenges.**


Countries like Thailand and Vietnam are working to secure trade deals with the US to mitigate President Trump's punitive tariffs, but face internal political strife and the risk of trans-shipping accusations, complicating their export futures.**


South East Asia is reeling from the shock waves of US President Donald Trump's tariffs announced on April 2, 2024. This region, heavily reliant on exports, witnessed steep duties imposed on its goods, with tariffs climbing as high as 49%. Countries such as Thailand, Vietnam, Malaysia, and Cambodia were particularly vulnerable, as industries ranging from electronics to textiles faced these punitive measures.

Richard Han, CEO of Hana Microelectronics in Thailand, described the moment he learned of the 36% levy as a "shock." Negotiations rapidly ensued, with Thailand managing to reduce its tariffs to 19% shortly before the August 1 deadline. However, the specifics of the deal remain murky, leaving many in the region anxious.

In the context of ASEAN, which exported approximately $477 billion worth of goods to the US in 2024, Vietnam stands out with exports constituting around 30% of its GDP. The Vietnamese government was swift to cut its imposed 46% tariff rate to 20%, although details surrounding the agreement are sparse, igniting skepticism about its actual implications.

Political contexts complicate trade negotiations further. Unlike Vietnam, Thailand operates with a fragmented coalition government facing diverse public interests. Additionally, prior diplomatic tensions over human rights issues have left a difficult legacy influencing the current trade talks.

Moreover, concerns about agricultural market access were significant hurdles; US demands threatened the core of Thailand’s agricultural economy. Prominent agribusiness groups in the region are lobbying fiercely against tariff elimination on US imports, fearing heightened competition. The rise of zero tariffs in Vietnam is an ongoing concern for the Thai agriculture sector, which involves large-scale players like CP Group.

Manufacturers are equally pressured; companies including SK Polymer rely heavily on stable tariffs to maintain their market positions. As Thailand’s manufacturing sector contends with uncertainties, the urgency for an effective trade deal grows. For firms like SK Polymer, servicing increasingly globalized supply chains, a tariff increase could mean devastating costs and potential business failures.

Concerns about "trans-shipping" practices, whereby Chinese goods are rerouted through Southeast Asia to evade tariffs, introduce a layer of complexity that hampers negotiations further. The Trump administration's strict stance raises fears about compliance issues for manufacturers in Thailand, with industry experts urging clarity on potential trade barriers.

Despite commitments being in flux and misinformation being prevalent, both Thailand and other regional players are eager to see the benefits of a formalized agreement. However, skepticism remains as the rules of engagement shift unexpectedly in response to the evolving tariff landscape. "At some point this has to stop," Han reflects, highlighting the pervasive uncertainty lingering in the air as nations scramble to navigate the precarious economic terrain shaped by US policies.

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