Asean is expected to benefit from the trade dispute between the US and China. The impact will be felt strongly in sectors like: information and communication technology (ICT), automotives and readymade garments. These sectors also constitute major segments in US-China bilateral trade.

Bangladesh, India and Vietnam will gain from the trade tension in readymade garments. India has the potential to attract the apparel market. Mild benefits may go to Pakistan and Sri Lanka.

The US has imposed tariffs on ICT, being its largest import from China. Malaysia and Vietnam will benefit the most, especially in the manufacturing of consumer goods such as mobile phones and laptops. Major ICT companies such as Dell, Sony, Panasonic, Samsung and Intel have their presence in these countries. The presence of a strong trade infrastructure, corporate laws, and an SEZ environment makes Malaysia and Vietnam potential locations for the ICT industry. Benefits may accrue to India, Indonesia and Thailand, given their ICT exports-oriented market.

Thailand and Malaysia will benefit most from the trade dislocation in automotives. In Thailand, trade links in the automotive sector are well diversified with exports to the US, Japan and other Asean counterparts. The medium term benefits will be reaped by India, Indonesia, the Philippines and Vietnam.