US tariffs are reshaping APAC’s business landscape and accelerating self-reliance. Faced with a new trade reality, APAC countries are forging new regional partnerships and supply chains, and also keeping an eye on key frontier markets in the Global South and Middle East.
ASEAN remained China's largest trading partner in Q1 2025, with total trade reaching 1.71tn yuan ($234.17bn)
As Beijing seeks to tighten regional trade ties the substantial economic links between China and the 10member Association of Southeast Asian Nations (ASEAN) will play a signi cant role in the regional and global economy (Global Times)
People in ASEAN nations who say China is the region’s most in uential economic power
Purchasing Managers’ Indexes (PMIs) for South Korea and Taiwan, April 2025
Value of India’s exports for the 20242025 nancial year $824.9bn
The survey of 2,023 people in ASEAN nations also found that 379% say China is the regions most in uential political and strategic powerhouse
Both metrics show that China’s perceived in uence in Southeast Asia outpaces the US by signi cant margins (ISEAS)
PMIs are economic indicators that measure monthly supply and demand trends In April 2025, Taiwan’s PMI was the lowest in 16 months, while South Korea’s PMI was the weakest since September 2022 (S&P Global/The Straits Times)
With a strategic advantage in the form of lower tariff rates, India’s exports are at an all-time high. It is also in the middle of negotiating a bilateral trade agreement with the US (Press Information Bureau Govt. of India)
“The EU and India have the potential to be one of the de ning partnerships of this century”
Ursula von der Leyen European Commission President
com
WGSN com Negotiations for a long-stalled free trade agreement (FTA) between the EU and India have been relaunched with both sides expressing a commitment to conclude the agreement by the end of 2025 (Economic Times and World Economic Forum)
“The corridor between the Middle East and Asia is becoming very important. It is really strategic and already very dynamic. It is going beyond oil and gas”
Expect new trade coalitions and ows to emerge between Asia and the Middle East. Gulf-China trade is also set to overtake Gulf-West trade in 2027 (HSBC)
Cultural context: responses by APAC nations to the US trade war are shaped by a high value on long-term relationships and diplomatic solutions. Rather than immediate, aggressive retaliation, there’s often a preference for seeking dialogue and negotiation. This re ects cultural norms that prioritise harmony and pragmatic approaches to collaboration.
Getty Images
Assaf Chairman of the Board, HSBC
Keep calm and carry on
APAC brands must continue on their path to strategically broaden their horizons. They must strengthen intra-regional resilience by deepening roots within Southeast Asian markets while exploring new frontier markets in Africa, India and the Middle East.
Indonesian coffee chain Kopi Kenangan is growing by adopting a exible entry strategy based on local regulations - entering Australia via partnership, Taiwan through a joint venture and operating self-owned stores in India following its recent debut there @kopikenangan.id
In action
Indian wearables brand Noise is expanding internationally, beginning with the Gulf Cooperation Council (GCC) region The company cites the GCC’s young and tech-savvy demographic as a key factor in this strategy
Line Man, a spin-off from Japanese messaging platform Line and Thai restaurant review platform Wongnai have merged to form Line Man Wongnai, a food delivery app that has since expanded beyond food into nancial services, ride-hailing services and more
Hyundai Motor’s new assembly plant in Singapore has started rolling out the IONIQ 6 EV, while its Innovation Centre and Corporate Lab are driving R&D in the region with local agencies and talents
Vietnam/Facebook
South Korean alcohol brand HiteJinro’s factory in Vietnam’s Lien
Ha Thai Industrial Park is its rst overseas investment in 100 years The facility is set to produce 30m bottles of Soju each year by mid-2026 and will become a new base to export and expand into Southeast Asia (The Business Times)
Chinese automaker Chery is set to introduce 19 New Energy Vehicles (NEVs) in South Africa (AutoTrader) This follows in the footsteps of BYD, which also recently announced three new cars in the South African market (BYD)
In December 2024, American fashion brand Abercrombie &
announced that it was set to enter India through a new multiyear franchise partnership with Myntra
Hyundai Motor Group
Chery /Weibo
Line Man
Jinro
Fitch
Abercrombie & Fitch Co
“Countries are going to pursue more omnidirectional foreign policies … Different coalitions of countries are going to form around particular issues or situations and re-form in different combinations around other issues”
Spanish fast fashion retailer Zara has invested long-term in local brand and artist collaborations in China. Following its Lunar New Year capsule with AO YES, the retailer tapped Chinese artist and 2021 Loewe Craft Prize winner Lin Fanglu for a capsule and showcase at Beijing’s Temple Dongjingyuan in April 2025
In April 2025, Chinese jeweller CHJ Jewellery teamed up with The Palace Museum in Beijing to host a branded exhibition and seminar around the ICH of gold ligree, inviting cultural scholars and experts to explore the past, present and future of the craft
In Seoul, Hyundai is emerging as a regionally inspired cultural tastemaker by curating brands from the wider APAC region It housed a pop-up for Thai cult brand Gongdid Design in April 2025 @gongdid design
Chinese consumer tech brand JISULIFE has appointed Thai actor Billkin of How to Make Millions Before Grandma Dies as its rst presenter, as it doubles down on the Southeast Asian market
Take inspiration from YouTuber iShowSpeed’s travel livestream across China, which helped bridge cultural gaps and transformed global perceptions of China via episodes that saw the streamer riding experimental EVs and meeting Chinese celebrities such as singer Wowkie Zhang
Zara/Xiaohongshu
CHJ Jewelry /Xiaohongshu
JISULIFE
irl stream in Beijing, China + Gre…
Capitalise on government support
Embark on proactive engagement with domestic government support initiatives, especially within East Asia’s system of state-led capitalism. These initiatives can provide a critical buffer and build long-term resilience as uncertainty around US tariffs continues to brew.
Under the plan, the government will expand its low-cost nancing programme for auto rms by ₩2tn (approximately $1.43bn), as well as tax deferrals of up to nine months. The government is also actively supporting local automakers’ efforts to expand into less developed markets in Africa, Latin America and the rest of Asia
South Korea unveiled a $2bn emergency fund to support automakers following the Trump tariffs.
(Kia)/Facebook
Singapore Economic Resilience Ta…
Singapore has formed a national task force to support businesses and workers through the new US tariffs, while making calls on businesses and citizens to rely on existing cost-of-living support measures announced in Budget 2025 to manage short-term strain
Malaysia has delayed the planned expansion of its sales and service tax (SST), initially due on May 1, to provide reprieve for manufacturers amid Trump’s impending tariffs
The Japanese government is rolling out support measures to make it easier for small businesses to receive state-backed loans.
Its Financial Services Agency has also made calls on banks to smooth nancing in the short term for businesses impacted by the US tariffs 40% of Japan’s prefectures have started to, or plan to, offer nancial aid to businesses impacted by the tariffs (Kyodo News)
Getty Images
The House of Representatives, Japan
Focus on strengthening production and innovation in India
With its relatively lower tariff rates, India’s economy is at a pivotal moment. It must leverage this opportunity to boost manufacturing, double down on innovation, optimise production cycles and create high-quality products at scale across domestic and intra-regional, high-potential markets.
Standard). A JP Morgan analyst estimates that shifting the nal step of Apple's iPhone production to India could result in a 2% price rise – much lower than the potential 30% rise if the phones were assembled in the US
Apple CEO Tim Cook has con rmed a move to assemble iPhones in India to reduce the impact of US tariffs – India’s 26% tariff
lower than tariffs as high as 145% on China (Business
Apple India
In action
B2B start-up Fabrito (India), which earned INR 6 crore (approximately $708,134) in its rst scal year alone, simpli es fabric sourcing, reducing the need for large MOQs (minimum order quantities) and lead times for 60+ garment manufacturers and apparel brands, with a huge ready-to-use fabric section (Inc42)
Marasim is an Indian-owned brand that created 29 ‘artisan clusters’ in India, empowering local artisans to collaborate and use diverse traditional craft techniques to innovate and supply designs to major global luxury fashion houses, reviving interest and pride in Indian culture through fashion
Funskool - India's leading toy manu…
Indian toy brand Funskool partners with major global toy brands for exports, contributing close to 20% of India’s toy exports, of which the US accounts for 40%. It announced its target revenue of $40-45m for the current scal year and is ramping up production amid US tariffs (Business Standard, 2025)
in
Gen Z fashion brand Beyoung (India) has announced plans to expand to the GCC (Gulf Cooperation Council) and MEA (Middle East and Africa) markets in partnership with e-commerce platform Noon.com in a strategic move to diversify its target market beyond India
Indian couturier Manish Malhotra showcased his World Collection at the nale of Dubai Fashion Week 2025, featuring both Indian and local ensembles to tap into the huge luxury and designerwear market in the region
The deepening of economic ties between Asia and Europe, driven in part by concerns about US policy, is likely to lead to signi cant shifts in global trade ows.
Chinese e-commerce giant JD.com is launching a push into Europe with the UK soft launch of its online grocery platform Joybuy, which includes Chinese groceries alongside everyday essentials and major brands like supermarket retailer Morrisons' own-brand products. Aiming for a signi cant share of the UK market with its diverse offerings and fast delivery, JD’s initial testing in select London postcodes indicates a strategic expansion. This move represents a notable step in China’s broader retail ambitions within the European market
Joy Buy
In action
The European Union and China have agreed to explore setting minimum prices for Chinesemade electric vehicles, potentially offering a path to de-escalate trade tensions that arose after the EU imposed tariffs last year The discussions signal a potential shift towards managed trade rather than outright tariffs in this key sector
Spanish hotel group Palladium is expanding into Asia, primarily focusing on Southeast Asian markets like Singapore, Vietnam, Bali and Thailand. Its approach emphasises building strong alliances with local partners and owners through joint ventures or management agreements to navigate the region’s complexities.
Alamy
Getty Images
Pal adium Hotel Group
Thai retailer YOKKAO a frontrunner in premium Muay Thai equipment, is enhancing its European presence with a new warehouse in the Czech Republic. This strategic move promises European
YOKKAO
Further research
Business Strategy: Dealing With Uncertainty
Business Strategy: Navigating Tariffs STEPIC Strategies 2027: Politics – Sharing the Stage STEPIC Strategies 2027: Industry – Protective & Open
