‘It’s going to affect us very badly’: New Trump tariffs cast gloom over businesses in Asia

Chinese toy exporter fears that US orders would ‘shrivel up’ this year

SHENZHEN – Boxes of colourful toy tool sets which should have been bound for toddlers in the United States sit unclaimed in Ms Cece Wong’s Guangdong warehouse.

The rapidly spiralling tariff war, which has given some American importers pause about purchases from China, has left exporters like her in limbo.

When the US hiked duties on Chinese imports by 10 per cent in February and then doubled these in March, her American buyer held off on shipping the toys in the hope that “maybe tariffs would come down” later on, she said.

But instead, that price tag is set to balloon with levies to spike by another 34 per cent from April 9. “Importers definitely have no way of accepting this,” the 35-year-old sales director at Qinfeng Toys told The Straits Times.

The tariff-induced limbo puts pressure on her company’s storage space and finances, she said. It will not get paid until after the goods are shipped out – and when that will happen is still an open question.

Qinfeng’s factory churns out a swathe of playthings, from teddy bear baby mats to googly-eyed bath toys, in China’s toy-making capital of Chenghai, Guangdong. The toys are priced from 10 to 40 yuan (S$1.85 to S$7.39) each at the factory.

It is one of more than 50,000 toy companies located in the district in Shantou city. The industry employs about a third of the population there, local media reported in December.

As tariff costs rise, one question that traders have to grapple with is who that bill should land on.

One of Ms Wong’s American buyers had in February asked that the tax be split evenly between them – a proposition she had accepted. When levies further increased in March, she said her customer was too embarrassed to propose any further cost-sharing and quickly proceeded with the shipment.

“We know that it is also not easy for customers,” she said. “(But) our factory’s profit margins are also not much … (we) also have to feed our workers”.

She added that some other toymakers had buyers who sought to slash prices or even cancel orders when shipments were already on the way.

Looking ahead, Ms Wong said she was worried that with the latest tariff hikes, orders from the US market might “shrivel up” this year. She estimated that American buyers account for between 10 per cent to 15 per cent of her company’s sales.

Already, she said, her factory’s total orders this year were down about 10 per cent from the same period in 2024, as buyers looked to suppliers in South-east Asia and India amid tariff worries and geopolitical tensions.

She was also concerned for her factory’s 100-odd employees, as fewer orders meant shorter shifts and lower salaries for the workers who are paid by the hour.

Asked about her next steps, Ms Wong said she would look to sell more in other markets, including in South-east Asia and to Chinese domestic buyers.

“Right now, there is nothing that anyone can do,” she said. “On one hand we wait and see, and on the other, we open up (other) markets.”

Malaysian cereal snack exporter had just cracked the US market

KUALA LUMPUR – Malaysian food company NIMS Adeliciousz was founded only in 2019 but managed to make inroads into the US market in 2023.

It was a huge breakthrough for the young firm as the US is “a market with high growth potential” for its cereal-based snack Chocotub, said its chief executive Tengku Norhanim Tengku Othman, as evidenced by its monthly 20-foot container shipment to the US. 

However, it now has to wrestle with the question that all exporters to the US are facing – whether to absorb the added cost, or pass it on to the consumer, in the wake of the latest US tariffs.

The Trump administration has slapped a 24 per cent tariff across all Malaysian imports – except certain semiconductors – effective from April 9. 

“If we absorb the added cost, our profit margins will shrink, limiting our ability to invest in marketing and expansion,” Ms Norhanim, 34, who is known as Kak Nim in the local industry, told The Straits Times.

“In the short term, we anticipate a slight decline in US sales volume if we adjust our pricing in response to the tariff increase. However, we remain confident in the long-term growth potential of the US market, as we continue to build strong branding and optimise costs,” she added.

Her company, which employs 50 workers, has a factory in Klang, Selangor, as well as two distribution centres, in Petaling Jaya, Selangor, and Kota Kinabalu, Sabah.

To mitigate risks, she said her company will pursue a two-pronged strategy by focusing on expanding its Asean footprint over the next two years “before aggressively pursuing further growth in the US and European markets”.

Ms Norhanim, who founded the company with her husband Faiz Husamuddin, said the firm will also seek to “optimise shipping costs by considering alternative distribution strategies” such as cargo consolidation and expanding direct-to-consumer sales through platforms such as TikTok Shop and Amazon.

Small businesses like NIMS are hoping they would be exempted from the 24 per cent import duties if they export only a modest amount of goods to the US. 

While small Malaysian businesses may fret, a giant like Top Glove, the world’s largest glove maker with an annual capacity of 50 billion pairs, believes it can grow its share of the US market, which already accounts for a quarter of its global exports.

It faces a lower tariff rate than its glove-producing competitors in countries such as Vietnam (46 per cent), Thailand (36 per cent), China (54 per cent, including earlier tariffs in 2025), and Indonesia (32 per cent).

“We believe this will generally augur well for the company. However, as developments are still in the early stages, we will continue to monitor the situation and assess the full impact of the tariffs in the coming months. We also anticipate increased competition in non-US markets, particularly Europe, as global trade dynamics shift,” it said in an April 4 response to the tariffs.

Nonetheless, Top Glove also noted concerns by the Malaysian Rubber Glove Manufacturers Association regarding the wider industry’s ability to weather the tariff impact and the call for emergency support measures from the government.

Malaysian glovemakers are also keeping fingers crossed for exemptions. Just as with how Indian pharmaceutical companies heaved a sigh of relief after escaping the tariffs, Malaysian glovemakers are hoping that their key role in healthcare will be considered.

Shrimp to shrink: Exports from India hit by US tariffs

NEW DELHI – Confusion and worry – these were two primary emotions Mr G. Pawan Kumar was going through on April 3.

A tariff-laden tempest had hit the 52-year-old all the way from the White House in the US, threatening to upend his shrimp export business based over 13,000km away in Visakhapatnam in the coastal Indian state of Andhra Pradesh.

Hours earlier, President Donald Trump had imposed a 26 per cent “reciprocal tariff” on all Indian imports into the US effective from April 9, sending aftershocks across sectors from jewellery to electronics in India.

Piled on with pre-existing anti-dumping and countervailing duties of around 9 per cent on Indian shrimps, Mr Kumar’s exports to the US were suddenly looking at total steep tariffs of around 35 per cent, the kind he had “never seen anything like” in his 25-odd-year career in the seafood industry.

“No business runs on a 35 per cent margin,” Mr Kumar, managing director of Sprint Exports Private Limited, told The Straits Times. “It’s too early to talk about it (the impact from the US tariffs), but all I can say is that it’s going to affect us very badly.”

More than half of Sprint’s global shrimp exports go to the US, with retail prices that can range from US$3 to US$9 (S$4 to S$12) for a pound (0.45kg). The firm ships around 6.4 million kg each year worldwide.

The tariffs have hit not just Sprint but also the wider Indian shrimp industry. Around 40 per cent of Indian frozen shrimp exports are destined for the US, its biggest buyer. In financial year 2024, US$2.34 billion worth of these crustaceans were shipped to the US, accounting for over 90 per cent of Indian seafood exports of 297,571 metric tons to the country.

Besides worry about the long-term prospects of his business, there is also confusion about how to find a way out of this tariff tangle in the immediate future. For instance, Mr Kumar is not sure if his shipments already in transit to the US will be subject to these new tariffs and if they are, whether he or the importer will have to foot the bill.

And what does one do about the cargo that is ready to be shipped at pre-“Liberation Day” tariff rates or future contracts that were agreed to two to three months in advance?

“Now I don’t know whether I should buy raw material or not for my existing orders,” he said. “We are in a mixed-bag kind of thing. Not only me, all the exporters are in the same stage.”

Mr Kumar, who is also the president of the Seafood Exporters Association of India, spent much of April 3 tracking his shipments to the US, which take around 45 days to arrive from India, and speaking with Indian government representatives and other exporters to see how best to deal with the challenge.

There are concerns American consumers may move away from Indian shrimp to cheaper options, such as those imported from Ecuador, a key competitor that has emerged luckier with a lower tariff of 10 per cent.

Diversifying to other global markets is not going to be easy for Sprint or the wider Indian shrimp export industry because of their heavy reliance on the US market. “Finding a market for 40 per cent is not all that easy… overnight, you can’t replace that kind of market,” said Mr Kumar.

The options, for now, seem to be limited. Indian exporters such as Mr Kumar will have to pass on the costs to American consumers. “Because as an exporter I can’t take that kind of hit,” he added.

Indonesian coffee exporter eyes EU and Japan markets instead

JAKARTA – Veteran coffee exporter Irfan Anwar, whose company counts the US as its biggest market, doesn’t need caffeine to keep him awake, as he has spent sleepless nights pondering the ramifications of the recent tariffs on Indonesia’s imports into America. 

The 44-year-old managing partner of FnB Tech, which exports robusta, arabica, and specialty coffees sourced from Sumatra to 125 countries worldwide, said his company has a shipment arriving in the US after the latest tariffs kick in from April 9.

”We are currently negotiating with our partners to determine who will bear the additional cost – the buyer or the exporter. I predict it will take around three months to resolve the tariff-related issues for Indonesian coffee exporters,” he told The Straits Times.

Indonesian coffee exports to the US will be hurt by the steep 32 per cent levy on imports, which will result in much uncertainty over coffee prices, denting demand even as consumers drink less java.

Mr Irfan, who is also chairman of the Association of Indonesian Coffee Exporters and Industries, noted that Starbucks’ stock price has taken a hit, in the wake of the Trump administration’s reciprocal tariffs. Shares of the Seattle-based company, which has the largest coffeehouse chain in the world, ended down 7 per cent on April 4, and 11 per cent lower for the year to date.

“Starbucks shares have declined, most likely because it sources all its coffee beans from overseas, including Indonesia,” he said. The US chain, which has about 35,000 stores globally, sources its coffee beans from Sumatra and Sulawesi Toraja, among other places, according to its website.

Indonesian coffee exporters that rely solely on the US “will be the most severely affected by the tariffs”, said Mr Irfan, who has been in the coffee-export business for about 25 years. FnB Tech, whose coffee business employs 100 workers, has a 3,412ha coffee plantation in North Sumatra, which is about seven times the size of Singapore’s Sentosa Island.

A major coffee exporter in Indonesia, FnB Tech says the US is its biggest market – accounting for just under 10 per cent of its total exports – followed by the European Union (EU) nations and Japan. Indonesia exported coffee valued at US$1.62 billion in 2024, with US$307.4 million – or about 19 per cent – entering the US, according to Indonesia’s statistics agency.

Going forward, FnB Tech will focus its efforts on exporting more to existing main markets in the EU and Japan, while exploring new markets in other countries, he said.

Mr Irfan said his company has contacted the US Embassy in Jakarta to register its concerns, and has urged the Indonesian government to engage in diplomatic talks to address the impact of the new tariffs on Indonesia’s export-reliant businesses.

“We’ve asked the government to take proactive measures on this issue,” he added.

The coffee exporters’ association is also coordinating with other commodity groups, such as palm oil, to support the Indonesian government’s efforts to mitigate the tariff impact, he added.

He is hopeful about a positive outcome, as South-east Asia’s largest economy seeks to negotiate with the US on the tariff plans, saying: “We hope the rate can be reduced to zero.”

• Joyce ZK Lim is The Straits Times’ China correspondent, based in Shenzhen.

• Shannon Teoh is The Straits Times’ bureau chief for Malaysia, where he has reported on various beats since 1998.

• Debarshi Dasgupta is The Straits Times’ India correspondent covering the country and other parts of South Asia.

• Stania Puspawardhani is Indonesia correspondent for The Straits Times based in Jakarta.

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