Deutsche Bank-Asia Thematic Analysis ASEAN the Great Wall of US tariffs-117335313

T2se3r0Ot6kwoPaT2se3r0Ot6kwoPaDistributed on: 19/08/2025 05:06:04 GMTDistributed on: 19/08/2025 05:06:04 GMT19 August 2025US tariff rates on ASEAN have almost doubled from the paused period rate of 10%. However, the divergence in rates has been minimized to just a few percentage points, leaving the competitive landscape among subregional economies largely unchanged in this regard, with Singapore being the exception. The latter's tariff rate stands out as the lowest at 10%, although final decisions on semiconductors and pharmaceutical goods are still pending. The potential 40% tariff on transshipments of Chinese goods also creates uncertainty, as details remain unclear while US-China negotiations continue through November. The outcome of the US-China deal—or the lack thereof—is consequential for the bloc, given their supply chain linkage and competition with China. This report examines changes in ASEAN's export market share and FDI trends, as well as their strategic initiatives aimed at navigating global headwinds and supporting growth, thinking beyond cyclical policy tools.Figure 1: US tariff rates-50050100150200250300350-10%0%10%20%30%40%50%60%INCNTAKRSGIDMYPHTHVNASEANLiberationPauseCurrentTrade Surplus w/ US ('24 USDbn, rhs)Source : USG, Deutsche Bank ResearchFigure 2: ASEAN market share vs China's5%10%15%20%25%4%5%6%7%8%9%10%05070911131517192123Manufactured goods share by exporersASEANCN rhsSource : UNCTAD, Deutsche Bank ResearchThis is a part of Asia Economics Thematic Analysis. Earlier supply chain related works include, among others: Mapping ASEAN's Trade Corridors, Vietnam's balancing act; Mapping Asia's EV trade; Asia's pharma supply chain; Mapping Asia's chips trade; ASEAN & the China-plus-One Strategy; IPEF: Rush for critical minerals, Indo-Pacific Economic Framework: Not TPP redux; Asia's energy security; Food security and price shocks in Asia; Vulnerability to China supply shocks; China's vulnerability to supply shocks; and, China-plus-one strategy.Juliana LeeChief Economist+65-6423-5203Junjie HuangEconomist+65-6423-6699Deutsche Bank AG/SingaporeIMPORTANT RESEARCH DISCLOSURES AND ANALYST CERTIFICATIONS LOCATED IN APPENDIX 1. UNTIL 19th MARCH 2021 INCOMPLETE DISCLOSURE INFORMATION MAY HAVE BEEN DISPLAYED, PLEASE SEE APPENDIX 1 FOR FURTHER DETAILS.Deutsche BankResearch Asia Economics Asia Thematic Analysis Date ASEAN & the Great Wall of US tariffs19 August 2025Asia Thematic AnalysisPage 2Deutsche Bank AG/SingaporeASEAN's Economic Landscape and Policy LeversCentral bankers in ASEAN have downplayed the positive surprises in Q2 GDP, anticipating a growth correction in the second half of the year as export front-loading reverses and higher US tariffs take effect. This aligns with our long-held view, particularly given the significant surge in ASEAN exports to the US.Figure 3: Growth surprised to the upside ...0.90.11.10.52.01.30.80.41.12.11.10.41.50.62.31.51.40.63.13.301234CNHKID*KRMY*PHSGTHTW*VN*% QoQ saBloomberg ConsensusActual*