US Appetite for Asean Investment Strong Despite Trump’s Proposed Tariffs
American Businesses Keen to Maintain or Expand Investments
US President Donald Trump’s proposed tariffs have raised concerns over the impact on global trade, but American businesses are keen to maintain or expand their investments in Southeast Asia.
Optimism for Future Growth
According to US-Asean Business Council president Ted Osius, US investors see the region’s steady economic growth, smart investment incentives, and strong levels of human capital as reasons to not pull out or scale back their commitments.
Boosting Investment
Osius stated that the 180 companies registered with the Washington-based council announced over US$20 billion worth of investment commitments in Asean’s digital ecosystems last year, focusing on data centers, cloud hubs, and undersea cables.
Broad Impact on Asean Economies
Osius assessed the impact of Trump’s proposed tariffs on Asean member countries’ economies, saying they would likely maintain their strong upward trajectory supported by deeper regional economic integration.
New Opportunities for Vietnam
Vietnam is eager and ready to accept the influx of production and investment that US tariffs on China may herald, with several Asean countries benefiting from the shift of supply chains.
Asean exports to the United States have already risen significantly, including exports of semiconductors and electrical components. The US has surpassed China as Asean’s top export market.
Research Forecast
The Nomura Research Institute estimates that total exports from Asean countries will likely double by 2030, roughly three times the expected rate of growth in global trade.
Proposed Tariffs
In a recent announcement, Trump announced plans to impose a 25% tariff on goods from Canada and Mexico, and a 10% tariff on goods from China, both effective from February 1.
Prime Minister Anwar Ibrahim’s Take
In a recent interview, Prime Minister Anwar Ibrahim stated that any policy which goes against free trade will affect several regions, including Asean, which Malaysia chairs this year.
Adapting to Changes
Asean has benefited from the tariffs implemented during Trump’s first administration, leading companies to shift supply chains to the region to avoid higher tariffs on Chinese goods. The IMF report last November noted that Asean has continued to strengthen trade and investment links with both China and the US.
Conclusion
Despite Trump’s proposed tariffs, US businesses remain optimistic about the future of business, investment, and trade in the Asean region. The region’s strong economic growth, investment incentives, and human capital are expected to maintain its upward trajectory.
Frequently Asked Questions
Q: How much investment have US companies announced in Asean’s digital ecosystems?
A: Over US$20 billion worth of investment commitments were announced last year, focusing on data centers, cloud hubs, and undersea cables.
Q: Which Asean countries are expected to benefit from US tariffs on China?
A: Several Asean countries, including Vietnam, are expected to benefit from the shift of production and investment due to US tariffs on China.
Q: What is the expected growth rate of Asean exports to the US by 2030?
A: According to research from the Nomura Research Institute, Asean exports to the US are expected to double by 2030, roughly three times the expected rate of growth in global trade.