According to Joanne Lin, senior fellow and co-coordinator of the Association of Southeast Asian Nations ( ASEAN ) Studies Centre at Singapore’s ISEAS-Yusof Ishak Institute, Beijing’s relative attractiveness as an investment and manufacturing alternative to China may be “diminished” if it receives a lower US tariff rate after August 12 than Southeast Asian countries.
” This is especially worrying for nations like Vietnam, Malaysia, and Indonesia, which have benefited from Chinese companies shifting their output during the height of the US-China business tensions,” she said.
A lower price routine for China may lessen the motivation for these relocations and stifle ASEAN’s influx of foreign direct investment tied to supply chain diversification.
Vietnam, Malaysia, and Indonesia are alleged to be members of US President Donald Trump’s so-called” Dirty 15″ list of nations that allegedly impose significant taxes and other non-tariff restrictions on US products. These countries make up the majority of US buying level.
The group is also thought to be included in a list of around 20 nations, according to a report from Bloomberg on May 10 that Southeast Asian nations are the subjects of ongoing US negotiations.
On May 9, US Trade Representative Jamieson Greer told CNBC that Washington is “having productive discussions with Vietnam and others, and they understand what we’re trying to solve.”
According to Lin,” The outcomes of diplomatic negotiations between US and ASEAN countries will be crucial to determine whether Southeast Asian nations can maintain their competitive advantage or risk losing out in a reformed global trade landscape.”
THAILAND IS” PASSIVE,” INDONESIA IS” LEFT BEHIND”, MALAYSIA IS YET TO COMMIT.
Indonesia’s economy is susceptible to the potential implications of a trade war and is now negotiating a possible 32 % US tax rate, which could become a reality.
By switching to US manufacturers for items like maize, soybeans, liquefied petroleum gas ( LPG) and crude, Jakarta has proposed to boost its quarterly imports from the US by up to US$ 19 billion.
A jarring non-tariff challenge identified by the US has been addressed by the country’s new rules, which allow the government to purchase products with lower locally-produced content, according to Reuters ‘ report on May 6.
Southeast Asia as a whole may incur if Beijing later receives a significantly lower tax rate than ASEAN countries, according to Bhima Yudhistira Adhinegara, director of the Center for Economic and Law Studies in Indonesia, despite the temporary agreement between the US and China’s announcement, which will benefit Indonesia’s factories, which are rushing to export goods to China.
” There will be numerous opportunities coming from China that may return to China.” South Asian companies will be relocating to China once more, he told CNA.
” Funding from the US and Europe will be coming to China. Therefore, I believe that each Asian member country’s push for further negotiations with the US even indicates bad things.
Bhima believes that China, the largest market in Southeast Asia, has been “left behind” in their trade negotiations, and that the latter has managed to secure a momentary but significant discount on their own price rates.
He cited difficulties that come with the agreements Jakarta has proposed, saying,” I think China made actually great progress compared to Indonesia, of which the negotiation process is still in improvement.”
” If Indonesia purchases more Electric or exports more oil from the US, there will be a significant burden on the state budget, as well as the fiscal room,” he said.