Southeast Asian nations including Malaysia, Thailand, and the Philippines could face the brunt of higher tariffs, potentially ranging from 15% to 20%, due to transshipment concerns, according to a report by Barron’s.
Henrietta Treyz, Director of economic policy research at Veda Partners, noted that with Vietnam’s tariff issues now “out of the way,” market attention has shifted to other countries that might be affected by transshipment suspicions.
The report states that most analysts anticipate affected countries will ultimately face tariffs of at least 10%, which is four times the initial tariff levels many had encountered. Treyz’s remarks further underscore the potential risk for Malaysia, Thailand, and the Philippines, where tariff rates could escalate to the 15% to 20% range.
Transshipment concerns typically arise when goods are exported from one country to a third country for minor processing or repackaging before being re-exported to their final destination, often to circumvent tariffs or rules of origin. This issue is increasingly becoming a focal point of international trade disputes.
The Trump administration first announced the sweeping tariff plan on April 2 and granted a 90-day window for countries to negotiate. So far, only the UK and Vietnam have reached preliminary deals. UK retaining 10%, Vietnam agreeing to 20% for exports and 40% for transshipped goods.
Negotiations have been hampered by political factors including Japan’s election, resistance to U.S. demands on China, and ambiguity surrounding U.S. industry-specific tariffs. Trump confirmed that letters specifying tariff rates will soon be sent out.
While markets like the S&P 500 remain resilient, uncertainty still weighs heavily on business investment. Trump also lashed out at Japan over its refusal to import U.S. rice, floating a 35% tariff.
Industry-specific tariffs under Section 232—covering steel, aluminum, autos, pharmaceuticals, semiconductors, and timber—remain unresolved and could further affect Southeast Asian exporters.
