Jaideep Singh was quoted in South China Morning Post, 25 October 2025
Trump’s tariffs are squeezing margins, re-routing supply chains and forcing companies to wean themselves off the US market
When US tariffs slammed shut the doors to one of Malaysia’s most important export markets, menswear designer Bon Zainal Harun didn’t flinch.
His answer to Washington’s volley of levies was as sharp as the suits he makes: “Hustle.”
Until recently, Zainal exported his bespoke suits and formalwear to the United States, but the 19 per cent tariff imposed by US President Donald Trump this summer has now largely walled off that market.
“The price increase may disrupt business,” he told This Week in Asia. “We just have to hustle and stay relevant.”
The White House’s tariffs continue to ricochet through global markets, unsettling supply chains and shredding growth forecasts across Asia. Yet as the initial shock fades, Southeast Asia’s small and medium-sized enterprises are regrouping and reluctantly preparing for a long-term future with less dependence on America.
For many, that means turning inward: finding new markets closer to home, tightening margins and limiting exposure to tariffs.
“Tariff or no tariff, clothes will still sell,” a sanguine Zainal said. “My advice is to focus on local and regional markets. In fashion, no matter how expensive it gets, people will buy – we just need to be more creative in design and marketing.”
Washington’s decision to impose a 19 per cent tariff on nearly all Malaysian exports has hit the nation’s small but lucrative garment sector particularly hard.
According to the Malaysian Textile Manufacturers Association, exports to the US rose from about 1.39 billion ringgit (US$330 million) in 2023 to 1.6 billion ringgit in 2024, but came in this year at only around 998 million ringgit in the eight months to August.
But policymakers in Kuala Lumpur are more concerned about the impact of tariffs on electronics and semiconductors, which last year accounted for roughly 40 per cent of Malaysia’s total exports. US trade officials have also got “transshipment”, or the re-routing of Chinese goods through Malaysia and its Southeast Asian neighbours, firmly in their crosshairs.
Malaysia’s government expects US tariffs to shave roughly 1 percentage point off growth, pulling projections down to 4-4.5 per cent in 2026.
That outlook will be on the minds of Southeast Asian leaders when Trump arrives in Kuala Lumpur for the Asean leaders’ summit this Sunday. The region’s small businesses are hoping he leaves without inflicting fresh damage through additional restrictions or forcing open markets to US goods.
New normal
Few expect Washington’s trade direction to reverse any time soon. “Analysts and policymakers the world over are normalising Trump’s trade policy as part of a general shift in American trade behaviour,” said Jaideep Singh, an analyst at the Institute of Strategic and International Studies Malaysia.
He added that while “the sweeping imposition of tariffs alone will not tackle the complex issues surrounding economic inequalities widened by trade”, they were also “unlikely to be undone in an immediate, subsequent post-Trump administration”.
Tariffs are taking a toll both at home and abroad, with US companies forced to shoulder the same rising costs and logistical knots they once outsourced away.
VF Corporation – the US parent company of Vans, The North Face and Timberland – estimates it will spend an additional US$250 million to US$260 million next year importing apparel and footwear from Southeast Asia, which supplies nearly 40 per cent of its products.
“This is a very unusual circumstance where the whole industry is affected kind of equally,” CEO Bracken Darrell said in an earnings call in late July.
“We’re just going to be flexible and react to whatever we need to from a pricing, cost and factory-relocation standpoint with a lot more agility than we could before.”
De-risking trade
Throughout the Association of Southeast Asian Nations, small enterprises are learning to adapt to what many are now seeing as a post-America trade era.
In Vietnam, exporters are turning to “de-risking” strategies and trimming their exposure to volatile markets like the US where tariffs and currency swings can make profits vanish overnight.
“For a small business like ours, maintaining a steady cash flow is absolutely crucial,” said Hoang Tung, chairman of F&B Investment & FoodEdu Academy, who also sells Lego-style building blocks to the US.
But with Washington imposing tariffs, only to rescind some later and then add more, predictability and stability are nowhere to be found in the American market, requiring a change of focus.
“In Vietnam, we have over 100 million people. That’s a huge market. That’s the direction our company is taking,” Tung added.
As manufacturers diversify from China, demand for Vietnamese manufacturing has surged. The Southeast Asian nation’s leadership is projecting 10 per cent economic growth next year, banking on new partners and diversified exports to keep its production lines humming despite all the uncertainty.
No ‘total eclipse’?
“The best-case scenario, Malaysia pulls off a smooth, balanced summit that projects Asean unity and delivers tangible progress on trade and regional cooperation,” said Shawn Balakrishnan, Asia-Pacific partner at consultancy Penta Group.
“The worst-case outcome, however, would be public clashes or off-script remarks that overshadow the agenda, triggering market jitters or diplomatic friction with China.”
For the region’s manufacturers, any reprieve – whether tariff cuts or limited carve-outs – would be embraced. But few hold illusions that the old order will return.
Still, Malaysia’s textile exporters do not expect US orders to dry up completely.
Ivan Sham Abdullah, vice-president of the Malaysia Textile Manufacturer Association, said there was unlikely to ever be “a total eclipse” of American buyers.
“No doubt the volume has dropped significantly, but there are still players in the industry with a unique supply product meeting the American market,” he said.
This article first appeared in South China Morning Post on 25 October 2025
