What does Trump’s victory mean for the tech industry in Asia?

The Southeast Asia region is one of the biggest trade partners with the US, but also relies heavily on China.

Donald Trump is back as the US President. For most businesses around the world, Trump’s victory will bring similar experiences to how the situation was during his first term. There will no doubt be some concerns as well among some industries, given the challenges that may come ahead.

In Asia, Trump’s victory in the elections will come with mixed reactions. This is mainly because of the nature of businesses in Asia, whereby most companies do business both with the US and China. China, which continues to face sanctions on some technology by the US, will most likely look to rebuild its relationship with the new administration.

For the tech industry in Asia, the biggest concern will be the impact of the ongoing trade war between the US and China. The tariffs will most likely continue to be there and many US organizations that have been operating in China have since relocated their production to Southeast Asia or India.

The Southeast Asia region is one of the biggest trade partners with the US. Leaders in Southeast Asia nations, including Malaysia and Singapore have congratulated the President elect and are looking forward to working with the new administration.

“So obviously, American companies play a key role in driving economic growth and creating jobs for all the countries in Southeast Asia. America is still also a very key trading partner, not the largest. China is the largest trading partner, but America is an important trading partner,” commented Lawrence Wong, Singapore’s Prime Minister.

Most distributors in Southeast Asia also do business with both Chinese and American vendors. Should more tariffs and sanctions be imposed, these distributors would need to relook at their approach, especially on the products they are offering.

Chinese technology companies like Huawei and Bytedance’s TikTok continue to face heavy challenges imposed by the US and will most likely only continue to experience it. However, both these companies continue to play a big role in the tech ecosystem in Asia, with Huawei having a prominent presence in the region.

During his first term as President, The Trump administration restricted Huawei and ZTE from accessing US technology and components, citing security concerns. This was a major setback for these companies, as they relied on US semiconductor technology. However, Huawei shocked the world when it was able to build mobile devices and develop its own chips to remain a strong player in the industry.

In the semiconductor industry, TSMC and even NVIDIA may be caught in the crossfire. Restrictions on selling chips to Huawei led to a dip in demand from Chinese customers. NVIDIA’s Jensen Huang has already stated that the company will continue to do business with China, designing specific chips for the country. China has also responded by urging local companies to avoid using Nvidia chips and to rely on domestic vendors.

In a report by SCMP, AI chip start-up Biren Technology, which is on the US trade blacklist, has significantly increased the performance of its hardware when training large language models (LLMs) by working with Tencent. Many Chinese AI start-ups face challenges in accessing enough compute resources for developing AI models. Difficulties include obtaining pricey Nvidia GPUs and lacking the technological skills needed to best optimize hardware for specific software.

Another company that could be impacted should Trump imposed more sanctions on China would be Tesla. Elon Musk, who has been a strong supporter of Trump, could find himself having to move some of his manufacturing out of the country. Interestingly, Musk may be prepared to do this, as he has already looked into building new factories outside of China.

While it's still early days, the impact of Trump’s first term in office will seemingly most likely continue to be a concern for businesses in Asia. Most organizations will want to continue to invest and work with both China and the US. The only question will be whether they can do that without having to worry about potential sanctions in the long run.

For the tech partner ecosystem, it will go down to how customers respond to any new tariffs or sanctions announced by the new administration. They will want to be well prepared to advise customers on what can be done to ensure productivity and efficiency is not compromised.