ASEAN Now Ships Twice as Much to the U.S. as China Does

For the first four months of this year, U.S. imports from ASEAN ran roughly double those from China — the first time that has happened this century, according to John Goyer, executive director of Southeast Asia at the U.S. Chamber of Commerce.

The milestones do not stop there. During the same January-through-April period, the United States imported more from ASEAN than from Canada. It also imported more from ASEAN than from the European Union. Neither has ever happened before, Goyer writes. Taken together, ASEAN now ranks behind only Mexico as a source of U.S. merchandise imports, and even that gap has narrowed sharply.

The shift comes despite elevated U.S. tariffs on the region and a sharp drop in U.S. imports from China compared with the same periods in 2025 and 2024.

China's exports are flooding in from the other side

Southeast Asia accounted for more than 24% of China's total exports in the first four months of this year, up from 17% during the same period last year, according to Goyer. Beijing's industrial policy keeps generating excess capacity, and Southeast Asian markets are absorbing the overflow across the value chain: textiles, footwear, appliances, consumer goods, machinery, intermediate inputs and advanced manufacturing components.

These trends point to two related developments, Goyer argues. First, China is pushing excess production into Southeast Asia and other markets worldwide. Second, supply chains are migrating out of China — but not necessarily away from China.

"That distinction is critical," Goyer writes.

Finished goods squeeze local industry

Chinese exports of finished goods are displacing local industry across Southeast Asia, especially in labor-intensive and consumer-facing sectors. Local manufacturers face intense price pressure, factory closures and competition from Chinese firms that benefit from scale, subsidies, weak domestic demand and state-directed industrial policy. Southeast Asian governments are increasingly turning to trade remedy actions to defend local producers.

Intermediate goods tell a different story. Chinese exports of intermediate inputs are supporting Southeast Asia's own export growth, and Chinese investment in manufacturing hubs and industrial parks often brings Chinese inputs, machinery, engineers, technology and supplier ecosystems with it. Goyer notes this can boost short-term export competitiveness while risking locking Southeast Asia into a subordinate role inside China-centered supply chains.

A Rhodium report commissioned by the U.S. Chamber, "China's Next-Generation Industrial Policy," finds that Chinese outward investment is not necessarily designed to relocate supply chains out of China in any meaningful sense. In many cases, it reinforces China's upstream position, preserves China's industrial scale and deepens foreign dependence on Chinese inputs and technology. The result: a meaningful share of U.S.-bound exports from Southeast Asia may contain substantial Chinese content, even when final assembly takes place in the region.

Enforcement risk cuts both ways

Strict rules designed to minimize Chinese content in Southeast Asian exports to the United States could disrupt existing supply chains, raise compliance costs and expose some regional goods to higher U.S. tariffs, Goyer writes. Absent clear definitions, the United States may instead take targeted tariff action against products or sectors where Chinese investment, ownership or input dependence is especially visible.

Pressure also comes from Beijing. Goyer warns that China has already shown a willingness to use economic tools coercively, and countries that move too quickly or too visibly against Chinese supply-chain interests could face retaliation, licensing delays, market-access pressure or other forms of economic coercion.

The legal environment is shifting too. Following the Supreme Court's ruling invalidating the administration's IEEPA tariffs, the tariff differential between goods coming directly from China and goods coming from Southeast Asia narrowed considerably. As the administration recalibrates through Section 301 and other trade tools, that gap could narrow further or disappear for some product categories. For Southeast Asia, Goyer writes, that would be a nightmare scenario: the region could lose much of the tariff advantage that attracted investment in the first place, while still facing the costs of Chinese supply-chain dependence.

The so-what

Goyer frames the new Chinese challenge in Southeast Asia as the risk that the region becomes the release valve for China's excess capacity, the assembly platform for China-linked exports to the United States, and the frontline of U.S.-China tariff enforcement all at once. If U.S. imports from Southeast Asia keep rising while a substantial share of those goods contain Chinese content, the region could become a larger target for U.S. enforcement actions.

His prescription: Southeast Asian countries should work more closely with the United States on transshipment, customs enforcement, rules of origin and reducing excessive dependence on Chinese inputs, while Washington should recognize that Southeast Asia is not merely a transshipment problem but a strategically important region trying to build its own industrial future.

Southeast Asia does not want to choose between the United States and China, Goyer concludes. But if current trends continue, the region may find that China has already made the choice harder — by embedding itself so deeply in the region's manufacturing base that diversification becomes more difficult, more costly and more politically fraught.