2025 trade shifts: Malaysia, Vietnam and Thailand widen US surplus but deepen China deficit

In 2025—when US President Donald Trump imposed tariffs on trading partners to narrow America’s trade deficit—export-driven Southeast Asian economies ended up widening their trade surplus with the United States even as they ran deeper deficits with China.

Nikkei Asia cited official statistics showing that in 2025, Malaysia, Thailand and Vietnam—three manufacturing and export hubs in Southeast Asia—expanded their US trade surplus in dollar terms by 45%, 44% and 28%, respectively, supporting overall trade for all three countries.

Malaysia’s Ministry of Investment, Trade and Industry said exports to the US “remained resilient”, rising 17.2%, supported by strong demand for electronics and electrical products, machinery, equipment and parts, processed food, and iron and steel products. Data from CEIC Data (based on official figures) showed Malaysia’s US trade surplus climbed to US$23.2 billion in 2025—more than ten times higher than a decade earlier.

Vietnam posted the largest US trade surplus among Southeast Asian countries, hitting a record US$133.8 billion in 2025, up 28% from 2024. Thailand’s US trade surplus rose to US$51.3 billion, from US$35.6 billion in 2024, helped by growth in electronics exports.

In April, Trump announced “reciprocal tariffs” targeting US trading partners in an effort to reduce the trade deficit. Some Southeast Asian countries were initially hit with tariffs of more than 40%, before negotiations reduced rates, taking effect in August. Like many countries, Southeast Asia saw exports rise as businesses rushed shipments ahead of tariff implementation, while governments continued talks with Washington to limit trade damage.

In October, the US cut import tariffs on most goods from Malaysia from 25% to 19%. In addition, 1,711 items—mostly in semiconductors, aerospace, and pharmaceuticals—were exempted from import tariffs. In return, Malaysia pledged it would not impose export bans or quotas on rare earths and other critical minerals shipped to the US.

At the same time, all three countries saw their trade deficit with China widen significantly—suggesting that goods from Asia’s largest economy, seeking to cope with higher US tariffs, flowed more heavily into these markets. In 2025, Malaysia’s China deficit jumped 62% to US$38.4 billion; Thailand’s rose 50% to US$67.8 billion; and Vietnam’s increased 40% to US$115 billion.

With imports from China rising alongside exports to the US, some experts have pointed to potential transshipment risks—where Chinese firms route goods through neighbouring Southeast Asian countries such as Vietnam before exporting to the US to avoid higher tariffs.

Looking ahead, uncertainty around US tariff policy continued into 2026. This month, Trump said he was raising tariffs on South Korean cars from 15% to 25%, and also threatened an additional 10% tariff on European countries opposing his bid to take Greenland from Denmark—before later softening his stance after reaching an “outline framework” understanding with European countries.

For 2026, Southeast Asian governments and analysts have warned exports could slow as Trump’s tariffs weigh on trade throughout the year. Thailand’s Commerce Ministry said on January 23 that Thai exports in 2026 were expected to “slow”, reflecting clearer impacts from existing and newly introduced US tariffs, alongside ongoing adjustments in global trade amid intensifying geopolitical tensions. For Malaysia, DBS said exports “are likely to face negative impacts from external headwinds stemming from US import tariffs”.

Archanun Kohpaiboon, a visiting fellow at the ISEAS-Yusof Ishak Institute, said last year’s trend is unlikely to carry through to 2026.

“US trade agreements with many countries will take effect. These economies are likely to import more from the US, and their trade surplus will decline. Of course, this will be a risk to the ASEAN economy this year,” he said.