US tariffs on China have intensified, reshaping global trade and prompting a shift in manufacturing away from China to Southeast Asia. President Trump’s 10% tariffs, though lower than the initially threatened 60%, have spurred retaliatory measures from China, escalating the trade war. In response, international companies, including Chinese firms, began relocating their operations to Southeast Asian nations such as Vietnam, Thailand, Malaysia, Indonesia, and Cambodia, a trend that has been further accelerated by the COVID-19 pandemic.
As Trump enters his second term, geopolitical uncertainty surrounding tariffs is likely to continue influencing global trade. While some countries stand to benefit—such as Vietnam, which has become a major hub for industries like sports fashion and electronics—experts warn of potential negative impacts. For instance, Jayant Menon from the ISEAS Yusof Ishak Institute notes that the trade war could lead to reduced exports from China, inflation in the US, and disruptions across Southeast Asia’s supply chains, particularly in electronics.
Additionally, the shift of manufacturing is complicated by emerging tariff policies targeting ownership rather than location. This could lead to higher compliance costs, forcing companies to reconsider whether continued trade with the US is worth the burden. Rising labor costs in China and a lack of skilled workers have also contributed to the relocation trend.
Countries like Cambodia are poised to benefit from this shift, especially in sectors like garments and footwear, though they face challenges such as dependence on raw materials from China and limited control over labor rights. Overall, the reshaping of global trade continues, with countries in Southeast Asia capitalizing on the ongoing shifts, though the long-term impacts remain uncertain.
source: https://www.abc.net.au/news/2025-02-07/us-china-tariffs-could-have-benefits-and-pitfalls-for-asia/104900252
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