Analysis: Export fizzle from reciprocal tariffs ‘overstated’
by Rachel Lau · Borneo Post OnlineKUCHING (September 9): The anticipated export contraction following the reciprocal tariff which took effect on August 7 is ‘overstated’, says the research arm of Maybank Investment Bank Bhd (Maybank Research).
In a strategy report on Sept 5, the research house said that a current popular narrative is that the recent export surge across Asean is temporary and largely due to frontloading activities ahead of the hike in reciprocal tariff in August.
As such, there is an expectation that exports will begin to collapse in the second half of the year (2H25) as frontloading activities dissipate and higher tariffs impact US import demand.
Maybank Research reckons that this risk of a sharp pullback in exports is overstated at best as they note that the build-up in US inventories has not been visibly material.
“If frontloading was significant, US inventories would be rising at above-normal rates and warehouses should be full, as was the case during the pandemic,” said the research arm.
However, both retail and wholesale build-up of US inventories has been modest and far below the levels seen during the pandemic which had dampened export recovery after the re-opening of global borders.
Instead industrial warehouse vacancy rates in the US have risen to the highest level since 2014 during the second quarter of 2025 (2Q25) which indicates that US firms have decided against restocking in the second quarter as US President Donald Trump negotiated trade deals and exempted large categories such as electronics, pharmaceutical and minerals.
And beyond this, the research arm also reckons that the risk of slowing demand may also be overplayed as the Asean region has a ‘relative’ tariff advantage over other regions due to lower tariffs as well as exemptions for electronics which account for a large share of Asean exports.
“China, India, Brazil, Switzerland and Canada are the main countries facing the largest negative impact and relative tariff disadvantage, because of high reciprocal tariff rates and other penalties such as China’s 20 per cent fentanyl tariff, Brazil’s 40 per cent national emergency tariff, and India’s 25 per cent Russian oil import penalty,” reported the research arm.
Because of this, Asean may instead benefit from diversion of US import demand from these higher tariff countries.
Within Asean, Maybank Research reckons that Vietnam benefits more from a relative tariff advantage followed by Singapore, Thailand, Indonesia and Malaysia.
As for the exemption of electronics from US tariffs, Maybank Research points out that this is an important point as electronic exports account for more than 30 per cent of total exports from Vietnam, Malaysia, Singapore and the Philippines.
The exemption coupled with a bright spot in global electronic demand from AI computing power and infrastructure boom is expected to keep demand robust in 2H25.
Additionally, electronic export giant, China, has also been observed to be losing US market share since April due to their 20 per cent fentanyl tariff.
As for the potential 100 per cent tariff on semiconductors, Maybank Research guides that this is likely not a pressing issue as they expect companies that are investing in US will be exempt.
“Most major semiconductor players with a large presence in Asean, including Intel, Micron, Global Foundries and Samsung, are all expanding capacity in the US,” they guide.