Publishe: 29 Aug 2025

Author: Jayant Menon

Facing Trump’s latest round of tariffs, Southeast Asian exports face a dilemma. But the incentive to “eat” or absorb the tariffs might diminish over time.

US President Donald Trump’s ‘Liberation Day’ tariffs have hit Southeast Asia particularly hard. Although these tariffs have come down somewhat, they are still significant. The question facing exporters is whether to “eat” the tariffs by reducing profit margins, or to “pass through” the tariffs to importers in higher prices and risk loss of market share. It is likely that Southeast Asian exporters will eventually opt for the latter, like their competitors, thus resulting in more negative effects on the US than any other economy.

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https://fulcrum.sg/will-southeast-asian-exporters-eat-the-trump-tariffs/

The article was published by ISEAS.

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The opinions expressed in this article are the author’s own and do not necessarily reflect the official policy, position or view of IRSEA