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Trump's Election Win Intensifies 'Southeast Asia-Washing' Concerns

With Trump's election victory, Southeast Asian firms brace for harsher US tariffs. The phenomenon of 'Southeast Asia-washing,' where companies relocate to avoid tariffs, is under scrutiny. Malaysia, a key player in the semiconductor and solar industries, faces significant impacts as the US intensifies its trade war with China. Experts predict increased protectionism and stricter trade measures, affecting investments and operations in the region.


Following Trump's election win, Southeast Asian companies are bracing for stricter US tariffs. Malaysia, which has seen significant investments in its semiconductor and solar industries, is particularly concerned. The US-China trade war, which began in 2018, has led to companies relocating operations to Southeast Asia to avoid tariffs. However, new US tariffs on solar imports from Malaysia, Thailand, Vietnam, and Cambodia are already impacting the sector.


Industry insiders report that Chinese firms in Malaysia are stalling expansion plans due to the new tariffs. Ken Ong, managing director of Malaysian solar firm Helios Photovoltaic, mentioned, "Some Chinese firms in Malaysia are stalling expansion plans following the new tariffs." Additionally, a local official at Kulim Hi-Tech Park noted that Chinese solar firm Risen Technology has "taken precautions to reduce production output by temporarily ceasing one line of production."

Experts warn that Trump's administration will likely adopt more aggressive trade measures, affecting Malaysia's semiconductor and data center industries. Wong Siew Hai, president of the Malaysia Semiconductor Industry Association, expressed concerns, stating, "We have to start getting used to this – restrictions and tariffs from the US. It has started and it’s not going to stop." Despite these challenges, he does not expect Chinese semiconductor companies in Malaysia to stall operations due to potential sanctions.


The Malaysian government is actively engaging with the US to delay tariff implementations and support affected companies. Malaysia’s Minister of Investment, Trade, and Industry, Tengku Zafrul Abdul Aziz, said, "We are now helping the affected companies by getting more information and asking for more time to do so, as well as engaging with the US Commerce Department to see how we can support these companies."

Overall, experts believe that US protectionism will intensify regardless of who is president, but under Trump, measures are likely to be more aggressive and abrupt. Chim Lee, senior analyst with the Economist Intelligence Unit, remarked, "Under Trump, the US may escalate tariffs on imports from Southeast Asia in a harsher and more abrupt manner." This increased scrutiny over trade with Southeast Asian countries is expected to continue, impacting various industries in the region.


Southeast Asia-Washing Concerns
Trump's Election Win Intensifies 'Southeast Asia-Washing' Concerns

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