South-east Asia has weathered Donald Trump’s tariff blitz thanks to US demand for tech, cheap manufacturing costs and the rerouting of goods from China, analysis of trade data shows.

Goods exports from south-east Asia to the US rose 25 per cent between July and September relative to the same period in 2024 despite the US president’s trade war, according to data from the US Census Bureau.

Foreign investments into the region’s main manufacturing economies have also increased, driven by global efforts to diversify supply chains. 

The increases defy fears following Trump’s “liberation day” in April that tariffs would hammer the region.

Trump announced “reciprocal” tariffs in April of up to 49 per cent on south-east Asia’s major manufacturing economies, though these were later reduced to around 20 per cent through deals struck with Washington.

“Everyone was worried about reciprocal tariffs at the start, but given the cost advantage of manufacturing goods in Asia . . . a 20 per cent tariff is not worth relocating over,” said Mats Persson, macro and geostrategy leader for consultancy EY. 

Even after tariffs, that cost advantage is “anywhere between 20 and more than 100 per cent” over making goods in the US or Europe, added Persson, a former adviser to the UK Treasury.

This has come as a relief to companies that deployed “China plus one” strategies during Trump’s first presidential term — using south-east Asian economies as a second export base to reduce their exposure to high duties imposed on Beijing. These have continued to hold water, said Persson.

While Chinese exports to the US were down by 40 per cent in the third quarter of 2025 compared with a year earlier, overall Asian exports to the US have held firm, according to US Census Bureau data.

In Cambodia, a big manufacturer of footwear and clothing, trade with the US has continued to grow despite receiving a 49 per cent tariff in April. It was later cut to 19 per cent after negotiations with the White House.

Clothing is the biggest export from Cambodia to the US. Exports of knitted clothing increased by a quarter between the third quarters of 2024 and 2025, according to Trade Data Monitor.

Ken Loo, secretary-general of Cambodia’s Textile, Apparel, Footwear & Travel Goods Association, said Trump’s tariffs had initially “stressed” the industry, but its worries dissipated as it emerged that competitors in Bangladesh, Vietnam and Indonesia were facing similar duties.

“The tariffs haven’t affected anyone. We are at 19 [per cent]. Our competitors are at 20. What’s the difference? . . . If you hit everybody evenly, then you hit nobody,” he said. 

However, Loo added that profit margins were being squeezed across the industry as customers asked for discounts to help offset the impact of tariffs.

Still, new investments from foreign companies continue to come into Cambodia even with the latest tariffs, with around 90 per cent of new investments in the Cambodian garment, footwear and travel goods industry coming from companies based in mainland China, he said.

The amount of trade rerouting from China — which is subject to a reciprocal tariff of 37 per cent — has been rising since Trump’s first presidency, reaching an all-time high of $23.7bn in September, according to analysis by the consultancy Capital Economics.

As a result, it estimates that indirect exports from China to the US are now of a similar magnitude to direct trade between the two economies.

Cambodia has seen the largest uptick in trade rerouting, with the value of indirect Chinese exports to the US some 73 per cent higher in September than a year previously, according to Capital Economics. There has also been a noticeable rise in trade rerouted through Vietnam, Indonesia and Thailand.

Vietnam’s trade surplus with the US hit an all-time high of $121.6bn in the first 11 months of 2025, according to official data. Thailand’s imports of raw materials and goods from China jumped 34 per cent in October, while exports to the US rose 33 per cent.

However, analysts warn that south-east Asian nations face continued uncertainty since the Trump administration has vowed to crack down on rerouting by threatening a 40 per cent tariff on any “transshipped” goods. It remains unclear how the US would define such goods.

South-east Asian countries rely heavily on Chinese raw material and intermediary goods, and the Trump administration has indicated in talks with countries in the region that it might not tolerate high Chinese content in final products exported to the US.

Another factor behind the region’s resilience so far is the US’s tech boom, according to Leah Fahy, China analyst at Capital Economics. Many tech-related exports, such as chips, chipmaking equipment, computers and smartphones, have been exempted from tariffs by the administration. 

“Exports of electronic goods are now growing at around 40 per cent year-on-year — faster than at the peak of the pandemic — when lockdowns led consumers to gorge on electronic products made in Asia,” Capital Economics said in a recent note to clients. It predicted that the strong demand was “likely to be sustained” in 2026.

After a recent visit to Vietnam, the region’s top exporter, Tom Miller, analyst at the Gavekal consultancy, said that while foreign investors were confident the region could ride out the trade war, its economy would remain at the whim of the Trump administration.

“It is still relatively early days,” Miller added in a note to clients in December. “[But if the US] moves aggressively to cut Chinese inputs from global supply chains, Vietnam will be hit hardest: no other country is as integrated into the Chinese value chain.”