Proposed U.S. tariffs on major exporters have raised concerns among ASEAN nations, including Malaysia, regarding potential economic impacts. However, ongoing shifts in global supply chains may also present new opportunities for the region.
UBS Investment Bank’s Senior ASEAN and Asia Economist, Grace Lim, noted that while the specifics of the tariff policies remain unclear, ASEAN nations may face a lower risk compared to larger economies with more significant trade surpluses with the U.S.
“For ASEAN in general, the risk profile may not be as high as other larger economies with an even larger trade surplus with the U.S. The risk is there, and I think countries are already considering ways to mitigate it. However, it may be too early to determine which countries are most affected, as the criteria for these tariffs remain uncertain,” Lim said during the UBS OneASEAN Summit 2025 virtual media briefing on February 26.
Despite the potential challenges, ASEAN countries may benefit from supply chain diversification, as businesses seek alternative manufacturing locations. Countries such as Vietnam, Malaysia, and Thailand have been attracting foreign direct investment (FDI) in sectors like artificial intelligence (AI), electric vehicles (EVs), and semiconductors, as companies adjust their production strategies.
Regardless of how U.S. tariffs evolve, global supply chain realignments are expected to continue, driven by efforts to mitigate trade risks.
“Intra-Asian trade is likely to expand as countries explore new export markets and diversify production sources,” Lim said. “This trend could support supply chain shifts and benefit manufacturing sectors in regions well-positioned to adapt to the changing trade landscape.”
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