Southeast Asia braces for surge in factory relocations as Trump tariff threats loom

As the U.S. braces for the return of Donald Trump to the White House, Southeast Asia is preparing for a significant shift in global supply chains. Companies, particularly those in the automotive and electronics sectors, are moving their factories out of China, anticipating that Trump will revive his hardline tariff policies. With Trump’s resounding election victory on Tuesday, industrial park developers across the region are seeing an uptick in demand for manufacturing space, signaling that the relocation trend will intensify.

Trump has vowed to impose tariffs as high as 60% on Chinese imports, a drastic increase from the 7.5% to 25% levies he implemented during his first term. This bold move threatens to further disrupt China’s export-driven economy, pushing manufacturers to seek alternatives in Southeast Asia.

Thailand, Vietnam, and Malaysia are poised to benefit from the shift. The region, home to a growing network of industrial parks, has already seen a rise in factory relocations. WHA Group, one of Thailand’s largest industrial estate developers, reports a surge in inquiries from Chinese companies. “This round is going to be more intense,” said CEO Jareeporn Jarukornsakul, referring to the heightened relocation activity as Trump prepares to take office in January.

Amata Corp., another major developer in the region, has seen two-thirds of the 90 factories that opened in its Southeast Asian parks this year come from China. Founder Vikrom Kromadit anticipates that Trump’s policies could double the number of companies looking to relocate to Amata’s industrial estates, which span Thailand, Vietnam, Laos, and Indonesia.

Southeast Asian nations are keen to capitalise on this shift. Thailand, a major auto manufacturing hub, has already attracted over USD 1.4 billion in investment from Chinese electric vehicle manufacturers. Malaysia, aiming to capture a larger share of global semiconductor exports, could also benefit from the realignment of supply chains, according to business leaders.

As the global trade landscape evolves, Southeast Asia is positioning itself as a crucial player in the reordering of supply chains away from China.