ASEAN businesses diversify supply chains amid trade uncertainty

ASEAN businesses are actively diversifying their operations and strengthening regional supply chains to mitigate risks associated with US trade policy and tariffs. According to a report by the Economic Research Institute for ASEAN and East Asia (ERIA), companies are pursuing regional clustering to achieve economies of scale. For example, moving packaging and testing operations to hubs like Vietnam and Malaysia could reduce logistics costs by 30% to 40% and significantly shorten transit times compared to traditional models.

However, this rapid shift toward new trade corridors has outpaced existing financial infrastructure. A whitepaper from Payoneer estimates that approximately USD 2.5 billion in transaction value is lost annually across Vietnam, Thailand, Malaysia, Indonesia, and the Philippines. This leakage is driven by high foreign exchange conversion costs and settlement delays. As businesses expand from single corridors to managing multiple currencies across various markets, the lack of efficient payment systems is creating significant financial friction.