Businesses in Southeast Asia are adapting their strategies following the recent tariffs announced by the United States on April 2, 2025. According to the UOB Business Outlook Study 2025, around 67% of businesses in ASEAN anticipate an increase in intra-ASEAN trade as a response to these tariffs. Additionally, 47% of businesses foresee a rise in overseas expansion.
In light of the US tariffs, about 60% of companies plan to accelerate digital adoption, aiming for benefits such as improved productivity and customer experience. Furthermore, approximately 56% expect to enhance sustainability efforts to improve their reputation and attract investors.
Business sentiment has declined in Southeast Asia and Greater China since the tariff announcement. Currently, only 48% of businesses express a "positive" or "very positive" outlook on the business environment, down from 77%. In Singapore specifically, optimism has decreased from 82% to 53%.
Eric Lian, Head of Group Commercial Banking at UOB, commented that businesses are planning their next steps post-tariff announcements. "Nearshoring looks set to be a longer-term trend as companies rebalance their supply chains within ASEAN," he said. He emphasized UOB's readiness to support businesses with solutions tailored to enhance operational efficiency and achieve sustainable growth.
The main research for the study was conducted in January 2025 with around 4,200 surveyed businesses across ASEAN and Greater China. A follow-up survey involving about 800 businesses took place shortly after the US tariff announcement.
Supply chain disruptions have been significant challenges highlighted by the study, especially in Indonesia and Hong Kong. Companies are adopting localization strategies to stabilize supply networks amid rising costs and procurement difficulties.
Workforce challenges persist with nearly six out of ten respondents facing issues related to high employee expectations and talent retention. In Singapore particularly, younger generation expectations add pressure on workforce management.
Women-led businesses have reported higher revenue growth compared to male counterparts and demonstrate strengths in sustainability and workforce management. Next-generation leaders prioritize digital adoption and strategic challenges over short-term concerns.
Sustainability practices are increasingly adopted across Hong Kong, Singapore, and Malaysia with large enterprises leading this trend. The pace is expected to increase following recent tariff announcements as companies seek credibility and investment opportunities.
For more detailed insights from the UOB Business Outlook Study 2025 (SMEs and Large Enterprises), visit: https://www.uobgroup.com/asean-insights/articles/uob-business-outlook-study-2025-regional.page