Trump’s 2025 tariffs are shaking up global trade, but Southeast Asia and MENA are turning disruption into opportunity — from supply chain pivots to strategic investments in tech and green energy. As trade routes realign, agile players in both regions are poised to capitalise on the next wave of global commerce.
In April 2025, former President Donald Trump, newly back in office, reignited the global trade debate by announcing sweeping tariffs on a range of imports, particularly targeting Chinese goods. The move sent tremors through global markets, reminiscent of the 2018–2020 trade war but this time broader and more aggressive. With tariff rates on select Chinese goods jumping to 60% — up from the previous average of 19% — the world is watching closely.
But Southeast Asia, and interestingly, MENA investors, might find silver linings in this reshuffling of trade cards.
Trump’s latest round of tariffs, officially rolled out in early April 2025, primarily targets:
(Source: U.S. Trade Representative Office, April 2025)
The justification? Protect U.S. industries from what Trump called “unfair Chinese industrial policy and overcapacity flooding global markets.” The administration argues that without these tariffs, American manufacturers will continue to lose ground in critical sectors like EVs and AI-enabled technologies.
Yet, the immediate market response was clear: U.S. businesses and consumers braced for price hikes, while global supply chains began scrambling for alternative routes.
Southeast Asia is deeply embedded in global supply chains, especially as China’s “plus-one” manufacturing partner. The Trump tariffs could hit the region in two major ways:
Many SEA manufacturers are closely tied to China for components and raw materials. Vietnam, Malaysia, and Thailand, for example, import critical semiconductor inputs from China. Higher costs on Chinese parts could squeeze SEA manufacturers, raising production costs.
The Asian Development Bank (ADB) warns that regional trade growth may slow by 0.5–0.7% in 2025 as a result of these new tariffs and the cascading retaliatory measures likely from China.
However, this disruption comes with an opportunity. Multinationals, especially U.S. companies, will accelerate their diversification away from China — a trend already in motion post-pandemic.
Statista projects that Southeast Asia’s share of global electronics exports could rise from 8% in 2024 to nearly 12% by 2027, driven largely by supply chain realignment.
Here’s where it gets interesting for MENA.
The Middle East — especially the Gulf — has quietly positioned itself as a crucial trade and logistics hub. With Trump’s tariffs nudging supply chains out of China, MENA can step in strategically in multiple ways.
The UAE’s Jebel Ali Port and Saudi Arabia’s NEOM port developments are poised to capture re-routed supply chains. As U.S. and European companies look for “friendlier” manufacturing bases and logistics corridors, MENA’s role as a midpoint between Asia and Europe becomes pivotal.
According to the Dubai Chamber of Commerce, re-export trade from Dubai surged 14% in Q1 2025, reflecting the region’s growing role as a trade intermediary.
MENA sovereign wealth funds (like ADQ, PIF, and Mubadala) are already active in Southeast Asia. The Trump tariffs create urgency for companies to fast-track factory expansions and infrastructure development in SEA — areas where MENA capital can flow swiftly.
For example, PIF’s recent commitment to $1.2 billion in Southeast Asian EV supply chains is timely, as U.S. companies seek China alternatives for critical minerals and battery manufacturing.
With clean tech supply chains being caught in the tariff crossfire, MENA’s ambitions in green hydrogen and solar energy present partnership opportunities with Southeast Asia’s renewable energy push.
A Frost & Sullivan report predicts that Southeast Asia’s renewable energy investment could top $50 billion by 2030, and MENA’s expertise and capital in large-scale solar and hydrogen projects are well-aligned.
MENA tech investors, particularly from the UAE and Saudi Arabia, have shown growing appetite for Southeast Asian startups. As U.S.-China tensions reshape the tech landscape, Southeast Asia’s digital economy — forecasted to reach $300 billion by 2026 (Google-Temasek-Bain report) — offers fertile ground.
For instance, Mubadala’s tech arm is reportedly scouting Southeast Asian AI and semiconductor startups to hedge against U.S.-China decoupling risks.
While Trump’s 2025 tariffs might initially feel like a global setback, for agile players in Southeast Asia and the MENA region, they open up a window of opportunity. Southeast Asia can further establish itself as the go-to alternative to China, while MENA can leverage its capital, logistics infrastructure, and geopolitical positioning to become an indispensable partner in the re-globalization of supply chains.
This is not the first time protectionist policies have redrawn global trade maps — but this time, Southeast Asia and MENA are better prepared to capitalize on the shift.
The message is clear: amid the noise of tariffs and trade wars, smart strategies and swift investments will define the winners of this next chapter in global commerce.
