Southeast Asia’s exports saw strong growth in the first half of the year amid tariff frontrunning but renewed tariff hikes and higher trade policy uncertainty weigh on the outlook, according to a report released by the Asian Development Bank (ADB).
In its Asian Development Outlook (ADO) September 2025 report, the ADB said trade deals have lowered tensions but not removed global trade risks.
Several developing Asian economies concluded trade deals with the US before the 90-day deadline of Aug. 1 —notably the Philippines, Cambodia, the Republic of Korea, Malaysia, Thailand, and Vietnam.
“Following a 3-month extension, US–PRC (People’s Republic of China) trade negotiations are ongoing. Thus, while tensions have subsided somewhat since April, the risk of renewed tariff escalation persists. Additionally, trade policy uncertainty remains high,” it said.
The report said the possible US sector-specific tariffs on semiconductors and pharmaceuticals could be particularly high.
“If these risks were to materialize, they could constrain investment, disrupt supply chains, and dampen consumer confidence, with adverse implications for the regional outlook,” it added.
The ADB report cited other risks including geopolitical tensions, further deterioration in the PRC’s property market, and possible financial market volatility.
In the first half of 2025, developing Asia’s exports rose 8.1 percent. This was mainly driven by electronics, with rising global demand for artificial intelligence-related equipment boosting the region’s exports —notably semiconductor chips.
Southeast Asia’s growth forecasts are reduced for 2025 and 2026 due to weak global demand and heightened trade uncertainty, it said.
