The impact was felt through logistics delays, supply chain disruptions, greater uncertainty and pressure from customers to lower prices.
ASEAN exports to the U.S. grew 30%
Despite the disruptions, ASEAN exports to the United States grew by about 30 percent year-on-year in 2025, while US imports from China declined sharply. ASEAN’s share of the US trade deficit consequently increased to 26.5 percent, potentially exposing the region to closer scrutiny over transshipment and rules of origin.
The trade shifts have also created new challenges within ASEAN, as some economies received more Chinese goods redirected from the US market, intensifying competition for local producers.
Firms rethink sourcing
Protectionism emerged as the biggest concern among local ASEAN businesses, cited by 75 percent of respondents in the ASEAN Business Advisory Council survey. Decarbonization requirements followed at 53.1 percent, while geopolitical risks were identified by 38.7 percent.
These pressures are pushing companies to rethink how and where they source goods.
About 60.6 percent of firms said they had changed their procurement strategies. Among them, 76.5 percent placed greater emphasis on environmental, social and governance compliance, while 71.6 percent focused on finding more suppliers.
Nearly 45 percent had begun sourcing across borders, with ASEAN the preferred destination for 93.2 percent of those companies.
Not without costs
But diversification is not without costs. Higher procurement expenses were cited by 90 percent of respondents as a major challenge, while 78.8 percent pointed to difficulties in meeting sustainability requirements.
Chinese suppliers, meanwhile, remain important to many businesses because of their competitive prices and product quality.
Companies are also changing how they reach customers, with more than half of surveyed firms revising their sales strategies. Expanding within ASEAN and using e-commerce platforms have become key approaches, although differences in regulations and tariffs continue to limit regional expansion.
