By Cadys Wang    Photo：CANVA

Many economists predict that the growth rates of the US and China will slow down. In contrast, the Southeast Asian nations, including India, are expected to grow between 5.1% and 6.5%. Specifically, the top five countries projected for growth are India at 6.5%, followed by Vietnam and the Philippines, both at 6.1%, and Indonesia at 5.1%. Meanwhile, China is anticipated to experience slower growth at 4.5%, and South America is expected to grow between 2.4% and 1.3%. As a result, India and Vietnam are poised to become the leading economic powers in Asia in 2025.

Export market shifting:

According to a report by China Customs, China's total export ratio to the United States has significantly decreased by approximately 3% from 2020 to 2024. In response, the U.S. has reduced its imports from China and redirected its demand to other Asian countries, including ASEAN nations, Taiwan, South Korea, and Japan. As a result, ASEAN countries are expected to become China's primary export market in 2025. This shift has led to a new trade flow pattern.

China exports components to ASEAN nations, Taiwan, Korea, and Japan, which then complete the manufacturing process and export the finished products to the USA.

ASEAN Strengthens Supply Chain Transparency:

Returning to ASEAN nations: While Vietnam ranks second in predicted growth, political factors warrant consideration. During Trump’s first presidency, he highlighted that Vietnam—a communist country—emerged as the primary beneficiary after the U.S. imposed heavy tariffs on mainland China. Vietnam's substantial and growing trade surplus with the U.S. has raised concerns about potential Chinese capital involvement in dirty tactics to evade US tariffs. The "Section 301" investigation confirmed that Vietnam had violated fair trade practices. Though Biden chose not to impose severe tariffs on Vietnam, treating it as a first offense, a potential "Trump 2.0" administration may adopt a stricter approach.

Taiwanese Businesses Must Adhere to Compliance

As the United States places increasing emphasis on foreign investment structures, particularly guarding against Chinese capital involvement, Taiwanese businesses in Southeast Asia need to enhance corporate transparency. Many U.S. clients have already implemented stringent shareholder structure audits for Southeast Asian investment enterprises to ensure a "clean" supply chain.

This scrutiny of investment structures began during the Biden administration. Many Taiwanese businesses report that when establishing operations in Southeast Asia, they are required by investors to avoid any Chinese funding. This is not merely a precaution against policy risks but also a preparation for stricter enforcement anticipated under a potential "Trump 2.0" administration, which is likely to intensify crackdowns on dirty tactics. This poses a new challenge for Taiwanese companies, forcing them to take sides amid U.S.-China policy conflicts.

Outlook for 2025:

As we approach 2025, it is clear that the global economic and trade landscape is experiencing significant changes. For instance, while India and Vietnam are expected to be major markets in 2025, Taiwanese companies have invested more heavily in countries like Thailand and Malaysia rather than in Vietnam. This trend is largely due to the uncertainty stemming from the U.S. government's previous Section 301 investigation into Vietnam, which has increased the risks associated with trade development in that country. Furthermore, the saturation of investments in traditional industries across Southeast Asia adds to the unpredictability of investment outcomes.

Under the potential leadership of a "Trump 2.0" administration, Taiwanese businesses are anticipated to ramp up their investment strategies in the U.S. and India. In 2025, maintaining both competitiveness and compliance within the supply chain will be a crucial challenge for all industries.

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