Tariff heat sees Europe heighten focus on Vietnam and Indonesia
Trade and geopolitical tensions are prompting European companies to plough more investment and trade into South-east Asia; business expansion and landmark FTAs are being inked
[HO CHI MINH CITY / JAKARTA] Europe’s engagement with South-east Asia is ramping up, from the recent 150 million euro (S$224.5 million) investment in a new Vietnam engineering hub by German software giant SAP to the UK’s removal of barriers for pharmaceutical exports to Vietnam and the European Union’s landmark trade deal with Indonesia.
The push is being fuelled by geopolitical tensions and US President Donald Trump’s Aug 7 tariff package – a flat rate of 15 per cent on most EU imports, in addition to existing steep duties on EU steel and vehicles – which has made selling to the US market costlier and less predictable for European exporters.
Ian Betts, chair of the British Chamber of Commerce in Indonesia, said that South-east Asian markets such as Indonesia and Vietnam are now viewed as a “strategic hedge” against over-reliance on traditional Western markets as they offer dynamic consumer bases, expanding middle classes and improving regulatory frameworks.
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