ASEAN is emerging as a major beneficiary of shifting U.S. investment away from China. Rising trade tensions and tariffs have prompted many American companies to seek alternative production bases. ASEAN countries, with lower labor costs and improving infrastructure, are attractive new hubs. India and Mexico are also gaining attention, but ASEAN offers geographical proximity to China’s supply chains. The diversification trend strengthens ASEAN’s role in global manufacturing networks.
According to the U.S.-China Business Council, nearly 70% of U.S. firms face tariff impacts. About 88% report business challenges linked to political tensions between Washington and Beijing. As a result, only 48% of firms plan new investments in China in 2025, down from 80% last year. Some U.S. companies are also losing Chinese customers who prefer non-U.S. brands.
While China remains vital for its market size, ASEAN is increasingly viewed as a safer growth option.
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September 17, 2025
