Taipei, Taiwan – The export-integrated economy in Southeast Asia has faced new uncertainty of US President Donald Trump’s trade war, as his administration has dropped on exports directed by third countries to avoid its rates on China.
According to the executive order issued by Trump last week, 40 percent of the goods imported in the United States were facing a 40 percent rate, as well as penalties and any applicable country-free country duties, if the US customs and border protection has become “transplant”.
On Thursday, the new country-specific rates of Trump will be implemented from 10 to 41 percent on Thursday.
China is the main goal of the new tax on transplants, which applies to all redirected goods regardless of the country, while the most integrated supply chains of the sector, including the Southeast Asia Chinese manufacturers, said trade experts say.
Puan Yatim, an associate professor of the Graduate School of Business of the University Cabangson Malaysia, said the Trump administration would depend on how the transplants are appointed.
“If Washington has made a narrow interpretation, the goods imported from China are at least processed, or then re-exported to the United States-the financial impact on Asian may be limited,” he told Al Jazira, referring to the South-East Asian Regional Group.
“However, a comprehensive and more punitive definition – where any violation of any significant Chinese input goods is considered – can prove economically destructive for countries like Vietnam, Indonesia, Cambodia and Malaysia.”
As part of a strategy known as “China Plus One”, Chinese growers have been constantly expanding in South -East Asia over the years.
During China’s COVID -1 LOCK lockdown, this policy has helped Chinese companies to avoid American rates, exploit cheap workers, and diversify their supply chains.
From 2020 to 2024, according to Asian data, Chinese foreign direct investment in 10 ASEAN countries went from $ 7.1 billion to $ 19.3 billion.
During the same period, exports from China to Southeast Asia have increased from $ 385 billion to $ 587 billion, according to the Carnegie Endowment for International Peace.
Chinese export growth, in some cases, with illegally misleading items to hide their original, the Trump administration is in the Southeast Asia in the Crowsheer of the administration.
“China needs central imports from China to build products (companies) to the United States, but companies are stuck in illegal transplants in the region, so the Trump administration has a major bias that Asian is a major channel,” said Priyanka Kishore, the chief economist of Asia in Singapore.
The main example of a trade focused on the solar cell industry in Washington’s IRE.
Following the year -long inspection, the US Department of Commerce has allegedly exported Chinese goods to Southeast Asian growers in April.
Southeast Asia is now a ‘sticky situation ”where the United States needs to satisfy – the top export market in the region – without giving away China, Kishore said.
Beijing has threatened to “determine the resistance” against countries that agree with the United States against the interests of the United States.
In May, Malaysia declared that they will no longer allow non -governmental organizations like the Chambers of Commerce to give the original certificates as part of an attempt to ensure the integrity of its exports.
Vietnam had also agreed to the transplant rate of 5 percent of the transcript rates in the framework deal that reached the United States in May, while Indonesia’s trade minister Buddy Santoso said last month that his country was opposed to transplanting.
Despite the efforts of the Southeast Asian governments to harass the United States, transplantation rates can create a large number of compliance with the private sector, said Steve Okun, founder and CEO of APAC Advisors in Singapore.
How to deal with products made by the United States in multiple countries will be a highest concern.
Okun said that the US rates are usually determined by the location where a product is “significant”, but if the Trump administration imposes duties based on the presence of Chinese components in a small extent, it will be extremely difficult.
Okun told Al Jaizira, “You will have to work hard on supply chains that have never never done before.”
These changes will “define potential trade,” he said.
The strict explanation of transplants can be even more blind, when the Trump administration is already ignoring China and a competitive benefit with its rates on the economy of the sector, said Richard Lob, CEO of World Purchase Provider Dragon Sources.
Singapore is subject to 10 percent at the latest fee of Trump, while Malaysia, Thailand, Cambodia, Vietnam and Indonesia are 19 or 20 per cent – less than 30 percent of the proposed 30 percent of the proposed rate for China under the White House’s latest tariff framework.
Trump’s transplant rates are probably eaten in that benefit.
“Limited materials, limited value, some kind of facilities abroad and these facilities have been added to prevent those transplants.
Washington DC-based consultants advised businesses about trade and supply chains in China said they had seen a similar incident, but for the loss of US exporters.
“We are watching the world (multinational companies), especially in China’s market in the US to localize supply chains for China in China,” the advisor told Al Jazir.
Companies in the field that dependent on materials like foreign-source steel-are subject to US rates-production in the United States and they start to move production from the country, the consultant said.
He said, “This is a terrible consequence and the purpose of the administration is the opposite,” he said.
Asia’s chief economist Nick Marro in the Economist Intelligence Unit said that despite the uncertainty, the policy of the policy in Washington is vaguely worse for Southeast Asia.
“Clearly, the United States is concerned about transplants,” Marrow told Al Jazir.
“Clearly, they are stabbed to them, and so for those investors, those companies, the government, which have supported them on things like China Plus One, are now watching a re -evaluation, and this is the case that investors have to integrate their policy.”
