As Southeast Asia welcomes Trump, it battles headwinds unleashed by him

"Southeast Asia and its China Plus One' supply chain are feeling the fallout from the US trade war. Southeast Asia was one of the biggest winners from United States President Donald Trump's trade war with China in 2018, luring manufacturers to the region to avoid new tariffs on Chinese goods. It benefitted from investment, tax revenues and technology transfers that came with the expanding China Plus One supply chain concept."

"Seven years later, Southeast Asia finds itself in a very different situation as Trump's second trade war drags on, and it gets squeezed by the world's top two economic powers. New tariffs from the US threaten its export-driven economy, while it's also facing a separate surge in Chinese goods looking for an alternative to the US market. It's now trying to find its way forward despite the economic pressure, said Jayant Menon, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore."

"Southeast Asia has been trying to walk the tightrope and do a balancing act of not picking sides between the US and China. Both are important economic partners, he told Al Jazeera. China is the largest trading partner of the Association of Southeast Asian Nations (ASEAN) a regional bloc of 10 countries plus new member, East Timor. The US is its fourth-largest trade partner, but it holds an outsized importance in other areas like regional security."

Southeast Asia benefited when manufacturers relocated to the region to avoid US tariffs, gaining investment, tax revenue and technology transfers through the China Plus One supply chain. Seven years later the region faces new US tariffs that threaten its export-driven economies while also absorbing a surge of Chinese goods seeking alternatives to the US market. The region must balance economic ties between the US and China because China is ASEAN's largest trading partner and the US remains a crucial security partner despite being the fourth-largest trade partner. In April US duties hit Cambodia, Laos and Vietnam particularly hard, with rates later falling to about 10–20 percent for most ASEAN countries.

Read at www.aljazeera.com