The U.S. administration's imposition of higher tariffs on Chinese goods in 2018–2019 triggered an unexpected surge in intra-Asian trade rather than its contraction. According to Asian customs data, Vietnamese exports to the United States climbed by 35% over two years as direct shipments from China declined.
Vietnam, Malaysia, and India emerged as the primary beneficiaries of these shifts. Vietnamese companies ramped up their acquisition of components from South Korea and Japan before shipping the finished products to the U.S. market. The volume of such transit shipments between 2019 and 2021 surpassed $48 billion.
In response, Chinese manufacturers relocated a portion of their production capacity to ASEAN nations. Singapore's Ministry of Trade estimates that direct investment from the PRC into the region grew by 22% in 2020. This strategic move allowed firms to maintain access to the American market while avoiding the steep tariffs.
Simultaneously, regional supply chains became significantly more integrated. Japan and South Korea increased their exports of machinery and semiconductors to Vietnam and Thailand. Total intra-Asian trade turnover, excluding the U.S., rose by 14% in the three years following the introduction of the tariffs.
Seeking to avoid duties, American companies also accelerated the transfer of their orders to Southeast Asia. U.S. customs statistics show that Vietnam's share of textile and electronics imports jumped from 8% in 2017 to 19% by 2022.
Consequently, Washington’s tariff policy has accelerated the establishment of alternative Asian trade routes, strengthening the region’s economic connectivity independently of the United States.
