Asia Export Divide Winners and Losers in a Shifting Trade Landscape

Global goods producers have now seen export orders fall for five consecutive months, a decline that began when major tariff announcements first emerged in April. But the story across Asia is not uniform. While overall demand remains weak, a clear split has opened up. Four Asian economies are still seeing growth in foreign orders. The rest are not. This divergence offers a practical view of which countries are adapting to the new trade environment and which are struggling.

The numbers come from August Purchasing Managers’ Index data, a reliable measure of manufacturing activity based on surveys of senior executives at private companies. Of the twelve Asian economies tracked, only four recorded an expansion in new export orders. India led the group by a wide margin. Malaysia, the Philippines, and Indonesia also saw sustained growth. The Philippines recorded its fastest pace of export order growth since the start of 2025. Indonesian manufacturers reported the steepest rise in nearly two years .

What sets these four apart is their trade arrangements with the United States. The Philippines and Indonesia both negotiated lower tariffs ahead of the August 1 deadline. Malaysia benefited from its own trade agreement with the US. These deals appear to have given their exporters a real advantage . India, which does not have a trade agreement with the US, has still managed to outperform. That suggests other factors, possibly strong domestic demand and a diversified export base, are also at play.

On the other side, eight Asian economies saw export orders decline. China and Thailand recorded growth in total new orders but a sustained drop in exports, indicating that domestic demand rather than international sales is driving their recovery. The situation is more concerning for Taiwan, Japan, Vietnam, Turkey, and Pakistan. In these countries, the decline in foreign demand was sharper than the fall in overall orders. That points to weaker export conditions weighing down the entire manufacturing sector .

South Korea offers a cautionary tale. As a major manufacturing hub deeply integrated into global supply chains, its export performance is often seen as a bellwether for global trade. South Korea saw foreign sales fall for the fifth consecutive month, dropping at the fastest pace since the tariff announcements in April . This suggests that even economies with advanced industrial bases are vulnerable to the current trade turbulence.

Tariffs remain the dominant concern for manufacturers across the region. Survey comments mentioning tariffs were six times higher than during the initial round of tariffs in President Trump’s first term. That is almost double the level seen in May and only slightly below the record high in June. While some tariff relief has been granted, uncertainty persists. Japan and South Korea saw their reciprocal tariffs reduced from 25% to 15%. Indonesia, Malaysia, Vietnam, and the Philippines received a reduction to 19%, though Vietnam faces a condition: the lower rate applies only to goods not shipped via mainland China, where the tariff is 40% .

The outlook remains cautious. Asian manufacturers’ expectations for output over the coming year are subdued compared to historical averages. While optimism has improved from April’s low, it remains below the average seen since 2012. Tariffs continue to be mentioned as a key source of uncertainty .

For businesses, this divergence matters. Companies sourcing from or exporting to Asia need to pay attention to these shifts. Countries with trade agreements or diversified markets are better positioned. Those heavily dependent on US demand without preferential terms face headwinds. The data also suggests that domestic demand in China and Thailand is providing some buffer, but export-driven economies like Vietnam, Turkey, and Pakistan are feeling the pressure.

The broader trend points to a structural shift in Asian trade. Some economies are adapting through diversification and trade deals. Others are struggling to adjust. For now, the winners are clear. The rest face a more difficult road ahead.