Asean's export rush wanes as tariff clock ticks down

Business Times

3 days ago

[SINGAPORE/KUALA LUMPUR/HANOI/JAKARTA] South-east Asia's export boom may be running on borrowed time as traders rush to front-load goods ahead of the end of US President Donald Trump's 90-day tariff pause on Jul 9, masking signs of fading momentum.
While April's export data climbed year on year across much of the region, a closer look reveals a month-on-month slowdown that is already hitting Thailand, Vietnam and the Philippines, with the rest of South-east Asia likely to follow by the second half of the year.
April trade figures suggest not just front-loading, but also a possible rerouting of US-destined China-origin goods through Asean economies, said Nomura analysts Rob Subbaraman and Toh Si Ying. Such front-loading means Asian export growth in the second quarter of the year could be stronger than projected, noted the duo in a May 28 report.
But they warned that this may just be 'a brief respite before an Asian export slump in H2, driven by the inevitable payback from front-loading and an overall slowdown in global trade activity caused by the highest US tariff rates in over 80 years and historically high business uncertainty'.
The major exporters in trade-reliant South-east Asia – Indonesia, Thailand, Malaysia, Vietnam and Singapore – face a looming slowdown. On the other hand, the Philippines – a net importer – saw front-loading taper off early. It could ultimately benefit from trade diversion and a potential US deal, as tariffs position its goods to become more competitive.
The Business Times breaks down how the shifting trade tide is unfolding across the region.
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Singapore: surge now, strain later
Singapore's non-oil domestic exports surged 12.4 per cent in April – the fastest pace since July 2024 – driven by gains in both electronics and non-electronics, with the former buoyed by current tariff exemptions.
The surprise jump was largely driven by front-loading, as exporters raced to capitalise on the tariff pause and get ahead of looming sector-specific duties on pharmaceuticals and semiconductors.
The current boost is 'really no consolation', as advanced sales mean that exports will slow when markets have stocked up, said Deputy Prime Minister Gan Kim Yong recently as he gave an update on the work of the Singapore Economic Resilience Taskforce.
Gan, who leads Singapore's tariff talks with the US, said Washington is open to discussion on 'some form of concession' in the impending sectoral tariffs, though it will not budge on the baseline 10 per cent duty.
Economists warned of medium to long-term risks amid uncertainty over Trump's next move, though sentiment has improved with the unexpectedly swift easing of US-China trade tensions, said UOB's Jester Koh.
But OCBC chief economist Selena Ling warned that whether the two players can reach a permanent trade deal remains to be seen.
DBS senior economist Chua Han Teng flagged that global trade frictions remain elevated compared to pre-Trump 2.0 which could be a drag on Singapore's 2025 exports, though likely less severe than earlier feared. — ELYSIA TAN
Malaysia: trade momentum meets tariff jitters
Malaysia's exports rose 16.4 per cent year on year to RM133.6 billion (S$40.5 billion) in April, as exporters rushed to beat a now-delayed US tariff hike. The jump, from RM114.7 billion a year earlier, was led by a 9.1 per cent rise in domestic exports and a 46 per cent surge in re-exports, driven by strong global demand for electrical and electronic products.
Electrical and electronic exports, led by semiconductors and data processing equipment, jumped 35.4 per cent year on year, marking five straight months of double-digit growth.
Malaysia's total trade rose 7.2 per cent in the first four months of 2025, with MIDF Research expecting export growth to hold over the next few months as firms take advantage of the temporary tariff reprieve.
Analysts remain cautious, with MIDF forecasting a slowdown in export growth to 2 per cent and imports to rise 4.5 per cent, as trade uncertainty and tariff risks persist. Bank Negara expects front-loaded exports to normalise soon.
UOB economists Julia Goh and Loke Siew Ting flagged ongoing uncertainty as US trade talks continue, noting firms may scale back production on weaker demand expectations. Pending clearer outcomes, UOB maintains its 2025 export growth for Malaysia forecast at 3.8 per cent. — TAN AI LENG
Thailand: export fever cooling
Thailand may have notched its tenth straight month of year-on-year export growth in April, but the pre-tariff shipping rush is losing steam. Exports rose 10.2 per cent from the prior year – a clear pullback from March's 17.8 per cent surge.
Thailand posted US$25.6 billion in exports in April, amounting to a US$3.3 billion trade deficit, revealed data released by the kingdom on May 26.
Bank of America's emerging Asia economist Pipat Luengnaruemitchai said April's cooling confirms the house's view that the strong first-quarter performance was temporary, driven by front-loaded shipments ahead of anticipated tariffs.
In a May 26 report on Thailand's trade balance, he said: 'Combined with limited domestic production gains and increasing external pressure, Thailand's export and trade balance outlook remains weak in the coming quarters.'
He added that more Chinese products may enter the kingdom as Beijing sources for alternative markets.
Industrial and agro-industrial products continue to be key growth drivers of Thailand's exports.
Notably, a jump in gold exports for a second month kept Thailand's exports robust. Maybank analysts Erica Tay and Chua Hak Bin noted in a recent report that exports of the yellow metal surged 250.5 per cent in April (and 269.5 per cent in March), which accounted for a third of export growth in Thailand – one of the largest physical gold trading hubs.
While there is little visibility on bilateral trade talks with the US, the house expects tariffs on Thailand to stay within 30 per cent. — GOH RUOXUE
Vietnam: tariff boost to factory blues
Vietnam posted strong export growth in April, driven by a spike in orders after the US delayed its 'Liberation Day' tariffs and temporarily exempted some electronic goods.
Despite facing a looming 46 per cent reciprocal tariff – among the highest in Asia – Vietnam's exports and imports surged in April by 19.8 per cent and 22.9 per cent year on year to US$37.45 billion and US$36.87 billion, respectively, Vietnam Customs indicated. However, exports dipped 2.8 per cent from March, while imports were flat.
Vietnam's electronics exports surged nearly 59 per cent in April, while footwear and textiles rose more than 20 per cent and 17 per cent, respectively, boosting its trade surplus with the US by 25 per cent in the first four months of 2025. At the same time, its trade deficit with China widened by more than 44 per cent.
The balance of trade is a key point in the tariff negotiations between Hanoi and Washington. The two countries concluded their second round of trade talks on May 22 and are expected to continue in early June, based on a statement from Vietnam's trade ministry.
So far, Hanoi has not only offered to purchase more US goods and reduced tariffs on certain imports, but has also taken steps to address Washington's non-tariff concerns, including fraud related to the origin of goods transshipped from China.
Tariff uncertainty is dampening sentiment among Vietnamese manufacturers, with business confidence sinking to its lowest since August 2021, according to S&P Global's April purchasing manager's index survey.
Factory activity shrank at the fastest pace since May 2023, as new orders and overseas demand had sharp declines. — JAMILLE TRAN
Indonesia: short-term gains, long-term doubts
Indonesia's exports climbed 5.8 per cent year on year in April to US$20.7 billion, driven by a 60 per cent increase in electrical machinery shipments and solid gains in iron and steel.
Meanwhile, imports jumped 21.8 per cent year on year to US$20.6 billion in April, outpacing export growth and dragging the monthly trade surplus down to a five-year low of US$158.8 million, based on data released by the statistics agency on Jun 2.
On a monthly basis, Indonesia's exports dropped 10.8 per cent, which Permata Bank economist Josua Pardede attributed to the typical slowdown during the Eid holidays.
'Additionally, weaker prices for key commodities like crude palm oil and coal are expected to have contributed to the monthly decline,' he said.
Exports to the US jumped 18.4 per cent year on year in April, with Bank Central Asia economist David Sumual attributing the rise to front-loading shipments ahead of impending US tariffs.
Indonesia's non-oil and gas exports to the US were driven by machinery and electrical equipment, up 17 per cent, alongside solid gains in footwear and apparel. This helped deliver a US$5.4 billion trade surplus with the US from January to April – now under scrutiny as Washington considers a 32 per cent tariff on key sectors.
In contrast, Indonesia posted a US$6.9 billion trade deficit with China over the same period, driven by surging imports of machinery, vehicles parts and electronics.
Sumual said: 'It appears there is also dumping of goods from China ahead of the tariff deadline.'
Maybank economist Brian Lee said the rerouting and import surge from China will likely ease in May and reduce pressure on the trade surplus, given China's trade deal with the US that cut tariffs to 30 per cent from 145 per cent for 90 days.
Economists at Samuel Sekuritas wrote while exports are expected to stay positive, global uncertainties and a weaker rupiah could limit gains and raise import costs. — ELISA VALENTA
The Philippines: modest tariffs, muted trade
Front-loading tied to the Philippines tapered off after the announcement of the tariffs, which imposed a relatively modest 17 per cent levy – the second-lowest among Asean countries after Singapore.
If enacted after the 90-day pause, the lower tariff could make Philippine goods more competitive in the US, positioning the net-importing nation to attract diverted trade and investment despite its limited reliance on export-led growth.
'We'll have to wait and see if this does materialise into better export volumes to the US,' said Nicholas Antonio T Mapa, chief economist at Metropolitan Bank. ANZ Research expects a trade agreement between Manila and Washington could be struck by the end of June, with a possible lower tariff rate of 10 to 15 per cent.
Preliminary data from the Philippine Statistics Authority showed weaker trade in April, with total value down 2 per cent year on year.
Exports rose 7 per cent but marked their slowest growth this year and fell 9.2 per cent from March, while imports dropped 7.2 per cent year on year and 8 per cent monthly – the first decline since December. Electronics remained the top export, accounting for more than half of outbound sales. The trade deficit from January to April narrowed slightly to US$15.9 billion.
April's import slump reversed the sharp 17.8 per cent surge seen in March – the strongest since August 2022. The steepest drop came from mineral fuels and lubricants, down 35.1 per cent, while imports of raw materials and intermediate goods – a key gauge of production outlook – swung from a 22.4 per cent rise to an 11 per cent decline.
'It was partly tied to softer prices (on weakening greenback) but perhaps also evidence of moderating demand,' added Mapa.
The Philippines' economy relies heavily on domestic consumption, which accounts for about two-thirds of the country's gross domestic product. –– JAMILLE TRAN