As the world’s two largest economies drift further apart, Malaysia’s top trade official has reached a sobering conclusion about what that means for Southeast Asia: businesses must build not one, but “two kitchens” to survive.
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“Our factories, our companies have to start preparing for having two kitchens,” Tengku Zafrul Aziz told This Week in Asia – an allusion to the reality that firms must now simultaneously cater to both American and Chinese demands and their increasingly divergent rules.
The aftershocks of US President Donald Trump’s “Liberation Day” tariffs are now being felt across Southeast Asia, where levies ranging from 19 to 49 per cent have been eating into exports and growth forecasts.
For many manufacturers, the most urgent questions are suddenly existential: where to build, what to make and, crucially, who to sell to.
Trump has defended the tariffs he imposed indiscriminately on friends and rivals alike as essential for reducing America’s multibillion-dollar trade deficits, accusing trading partners of having taken the world’s largest consumer market “for a ride”.
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