Asian countries are rushing their exports to US as Trump’s tariff July 9 reciprocal tariff deadline looms and US importers are stocking up fast to ahead of the imposition of hefty tariffs. And, as a result, the United States’ trade deficit with Asia is widening, as American importers rush to stock up ahead of the deadline.
Vietnam, Taiwan and Thailand all recorded record-high exports to the US. South Korean shipments were near all-time highs last month and appear to have risen again in early June, according to figures published on Monday.
This surge reverses the usual seasonal trend, where exports from Asia typically peak later in the year in the run-up to the Christmas holiday season. With fresh US tariffs expected from early July, companies are expediting shipments to ensure goods arrive before the new levies take effect.
Shipments from Vietnam and Thailand to the US surged 35 percent in May from a year earlier, while exports from Taiwan jumped nearly 90 percent. These dramatic increases are expected to show up in US trade data due later this week and may further complicate negotiations between Washington and its Asian trading partners over tariff levels.
The US trade deficit has ballooned this year as businesses scramble to adapt to abrupt changes in Washington’s trade and tariff policies. Although rising pharmaceutical imports from Europe have added to the imbalance, Asian economies remain the largest contributors.
May’s trade shortfall is forecast at $91 billion, pushing the deficit for the year to nearly $643 billion – significantly higher than the previous record for this point in the year, set during the pandemic.
Should Trump follow through with imposing historically high tariffs on Asian countries in early July, the recent export boom could swiftly reverse, jeopardising economic growth across the region.
Last month, the Asia-Pacific Economic Cooperation (APEC) group cut its GDP growth forecast for the region to 2.6 percent for 2025, down from 3.3 percent in March, citing mounting trade tensions.
Policy uncertainty is already weighing on trade with China. Despite a tariff truce reached in Geneva in mid-May, Chinese exports to the US fell last month. However, the deal did not remove all tariffs, and some exporters are reportedly rerouting shipments through third countries – a practice known as “origin washing”.
Chinese firms are also shifting focus to alternative markets and boosting domestic sales. Any prolonged decline in exports could threaten China’s broader economic recovery, which remains heavily reliant on external demand amid a housing crisis and subdued domestic consumption.
Other Asian economies could soon face similar challenges if they fail to reach agreements with Washington and avoid punitive tariff hikes.
