SE Asia's US Trade Surplus Soars Despite Trump Tariffs

Southeast Asia's export-driven economies saw their trade surpluses with the United States climb sharply in 2025, a surprising outcome that defied the Trump administration's efforts to rebalance trade through new tariffs.

Official data shows that Malaysia, Thailand, and Vietnam—three of the region's primary manufacturing and export centers—posted significant gains. Their trade surpluses with the U.S. expanded by 45%, 44%, and 28%, respectively, providing a major boost to their overall trade performance.

A Surge in Exports to the U.S.

According to Malaysia's Ministry of Investment, Trade and Industry, exports to the U.S. "remained resilient," with value expanding by 17.2%. The ministry credited this growth to "robust demand for [electronics and electric] products, machinery, equipment and parts, processed food as well as manufactures of metal."

The numbers reveal a clear trend across the region:

• Malaysia: The trade surplus with the U.S. jumped to $23.2 billion in 2025 from $15.9 billion the previous year, according to CEIC Data. This figure is more than ten times larger than it was a decade ago.

• Vietnam: The country recorded the largest surplus with the U.S. among Southeast Asian nations, reaching a record $133.8 billion in 2025, a 28% year-on-year increase.

• Thailand: The trade surplus climbed to $51.3 billion in 2025, up from $35.6 billion a year earlier, driven largely by electronics exports.

Figure 1: Trade surpluses with the U.S. for Malaysia, Thailand, and Vietnam showed a steep upward trajectory through 2025, with Vietnam leading the expansion.

Navigating Trump's Tariff Strategy

The export boom occurred despite President Trump's announcement of "reciprocal" tariffs in April, which were designed to shrink America's trade deficit. Some Southeast Asian countries were initially hit with duties exceeding 40% before the tariffs took effect in August after bilateral negotiations led to reductions.

Businesses responded by front-loading shipments, accelerating exports to get ahead of the deadlines. Meanwhile, governments continued to negotiate with Washington to soften the blow.

In October, the U.S. lowered its tariff on most Malaysian goods from 25% to 19%. A list of 1,711 items, mainly in semiconductors, aerospace, and pharmaceuticals, now face zero tariffs. In exchange, Malaysia promised not to impose export bans or quotas on rare earth elements and critical minerals destined for the U.S.

"ASEAN will seek to secure preferential rates to limit the downside impact," noted DBS Bank senior economist Chua Han Teng in a report. "Notably, Malaysia is actively negotiating with the U.S. to maintain exemptions for its semiconductor exports from fresh tariffs."

The China Connection: Widening Deficits

While trade surpluses with the U.S. grew, the three nations' trade deficits with China widened considerably. This suggests an influx of goods from Asia's largest economy, which is also contending with high U.S. tariffs.

In 2025, Malaysia's trade deficit with China widened by 62% to $38.4 billion. Thailand's deficit grew 50% to $67.8 billion, and Vietnam's expanded by 40% to $115 billion.

"China exports cheap goods, and now with EV imports, [Malaysia's] trade deficit with China in future could be wider," commented Vaseehar Hassan Abdul Razack, executive vice chairman at KSI Strategic Institute for Asia Pacific.

Figure 2: While exports to the U.S. boomed, trade deficits with China deepened significantly for all three nations, particularly Vietnam.

Some analysts believe Chinese companies may be routing goods through neighboring countries like Vietnam before shipping them to the U.S. to bypass American tariffs. Jaideep Singh, an analyst at the Institute of Strategic & International Studies Malaysia, noted that Malaysia's share of domestic exports fell to 77%, its lowest level in at least seven years.

"This means that while most of Malaysia's exports are still manufactured and processed domestically, re-exports of goods produced elsewhere are rising," he said.

An Uncertain Outlook for 2026

Uncertainty over U.S. trade policy is set to continue into 2026. This month, President Trump announced an increase in tariffs on South Korean automobiles from 15% to 25%. He also threatened, but later retracted, a 10% tariff on European nations that opposed his efforts to acquire Greenland.

Analysts and governments in Southeast Asia warn that export growth could slow this year as the full-year impact of the tariffs takes hold.

Thailand's Commerce Ministry stated on January 23 that its 2026 export outlook is "expected to moderate, reflecting the clearer impact of U.S. tariff measures."

The DBS report echoed this sentiment, noting that Malaysia's goods exports are "likely to be negatively impacted by external headwinds from US tariffs." Chua also pointed out that the tariffs "will pose a major challenge to Vietnam's export-oriented manufacturing sector and its economy in 2026."

Archanun Kohpaiboon, a visiting senior fellow at the ISEAS-Yusof Ishak Institute, believes last year's trend is unlikely to continue. "The [U.S.] trade deal with many countries would be in effect," he said. "Hence, these economies tend to import more from the U.S. and the trade surplus would reduce. This would, of course, pose risk to the ASEAN economy in 2026."