Malaysia has emerged as the biggest beneficiary of the US tariff exemptions, surpassing regional peers such as Thailand and Vietnam, according to CGS International Research.
The research firm explained that over 60% of Malaysia’s exports to the US now enjoy zero tariffs, making the country the leader in the ASEAN region.
Following the tariff exemptions on 26 October, CGS estimates that Malaysia now has over 60% of its products exempt from import duties, compared to around 40% for Thailand and Vietnam.
However, exposure to US tariffs appears uneven across the region. Vietnam remains the most exposed, with about 16.1% of its Gross Domestic Product (GDP) dependent on exports to the US, reflecting its high reliance on the market.
For Malaysia and Thailand, direct exposure to US tariffs is in the single digits, while Indonesia and Singapore, which did not receive the exemption on 26 October, also have low risk of tariff impacts.
However, CGS International stressed that the tariff risk in ASEAN is not as severe as the market fears, as the implementation of the measures is expected to be gradual with a more flexible policy towards countries in the region.
Washington is also expected to adopt a gradual approach in raising its tariffs, giving ASEAN economies room to adjust strategies and minimize supply chain disruptions.
The firm concluded that ASEAN is now actively diversifying trade to reduce the impact of reciprocal tariffs, including by working on a bilateral free trade agreement with the European Union (EU).
