Sweeping tariffs threaten ‘Factory Asia’

Executive and analysts say that President Donald Trump’s tariff barrage is about to make the most stringent landing on Asian production, recently thrown into a disruption supply chain to work around the tensions with China, executives and analysts.

Trump administration “Mutual” duty Bring the import rate from China to more than 605 percent, representing the highest level of the region.

However, manufacturers and economists have said that in many Southeast Asian economies, new tariffs come as a bigger push between 32 and 49 percent, the “China Plus One” strategy to use their second export production base.

City analysts said in a research note, “Factory Asia” has hit the hard. “

After Trump punished China for his first term in 2018, most manufacturers, especially in electronics, began to transfer production in Southeast Asia and elsewhere.

Vietnam, the first and largest beneficiary of this trend, is now expected to suffer the worst damage: it is facing 46 percent tariff rates and more open to the US market than other Asian exporters.

Burnstein Analysts say, “The impact on Vietnam will be the worst for Vietnam on our GDP export account.

Vietnam and Southeast Asia have also become a hydraulic for Chinese products in the United States. About one of the three new investments Chinese companies in Vietnam.

OCBC Analysts said in a research note, “China’s previous strategy for exporting exports via ASEAN can now be less effective, and countries like Vietnam and Thailand have more mutual tariffs than China.”

“As a result, trade can be relocated again, potentially driven China to its more exports directly to North America, despite the extensive tariff environment.”

Electronics gadgets, including smartphones, computers and electrical equipment, which were 30 percent of Vietnam exports to the United States last year, are expected to suffer the most.

Supply chains for clothing and shoes, Vietnam, are expected to disrupt the largest US import after China, with Vietnam.

Industrial officials have said that Chinese electronics agreement manufacturers have invested a lot for LuxShare and Gortek, which has invested a lot for Apple and other multinational brands from China in 2018, and will have to remove the capacity or add power again elsewhere.

Nintendo of Japan Been shipping According to the Taipei-based Electronics Research Farm Trendfour, thousands of people console thousands of people in the United States from its Vietnamese facilities from its Vietnamese facilities, now Samsung, the second largest mobile phone brand in the United States, has 45 percent smartphone produced in Vietnam.

Some observers see an opportunity for India, which is relatively lightly closed, the rate of tariffs on 27 percent.

Trendfource analyst Mia Huang said, “Samsung will still concentrate on Vietnam as its main smartphone production base in terms of pressure stress, but will accelerate its production plan in India to give priority to the North American market meeting,” said Trendfour Huang. “This wave of customs system will help India accelerate the development of its smartphone supply chain and take more production orders.”

Compared to the higher joint tariffs on China and Vietnam, India will enjoy the “valuable close-term window” of export competition, Pankaj Moindru Financial Times, Chairman of the India Cellular and Electronics Association (ICEA).

However, Mohindru said the “true long-term reflection point” for India’s electronics industry will rest in the successful conclusion of the United States-India bilateral trade agreement, which has promised to agree by autumn.

Last month, Prime Minister Narendra Modi’s visit to the United States, the two countries now promised to promote their bilateral trade in goods and services by 2030, which is now less than $ 200 billion.

Analysts said that many large manufacturers, such as Taiwan’s Foxcon, the world’s largest iPhone maker or quanta computer, are the top creators of laptop, which combine servers for many US clients, will be able to deal with “release Day” tariffs. ” They and other contract manufacturers have added plants in Southeast Asia, Mexico and the United States since 2018, and is about to increase production in the United States.

Despite the tariff waves on imported products imported to the United States, “You still need benefits [abroad] Because you still don’t know what Trump will do “”, Robert Cheng, the head of the Taiwan research of the Bank of America. ” Because of the underlying political situation, everyone now needs more flexibility. “

Contrary to semiconductor manufacturing, which requires facilities that can spend up to $ 30 billion and take years in construction, assembling lines for smartphones or servers can be easily prepared and transferred more easily.

However, the image is very different for thousands of small companies supporting the Asia-based global supply chains.

Hong Kong Apparel Society Industry Group Honorary Chairman Felix Chung, who calculates more than 5 clothing and clothing manufacturers in China, saying that “China Plus” was “shocked” by high tariffs imposed on the United States in countries.

“How can manufacturers respond? Where else can they go?” He

Many manufacturers removed some production from China to Vietnam, Cambodia or Bangladesh, Chung said, and US customers blamed more than half of the business business.

“Much [manufacturers] Cambodia has already received plenty of orders for the next few months by producing from Vietnam. The The And something is expanding more investment and manufacturing power there, “he said.” Now [we] Is caught from the watchman. The The[and many US buyers]If they cannot afford new tariffs only maybe the order may be canceled ””

Taipei Catherine Hill, Anant Lakshmi in Jakarta, John Reid in Delhi, Edward White of Shanghai and Chan Him-Him and Arjun Blue Alim in Hong Kong