The United States has become the second-largest trade partner of the Association of Southeast Asian Nations (ASEAN) after China.
In 2021, trade in goods and services between the US and ASEAN reached $441.7 billion, with the US also being the largest source of foreign direct investment (FDI) in the region. The top goods exported from ASEAN to the US include electrical machinery, nuclear reactors, apparel, and furniture.
Key Takeaways
- The United States is the second-largest trade partner of ASEAN after China, with trade in goods and services reaching $441.7 billion in 2021.
- The US is the largest source of foreign direct investment in ASEAN, contributing to approximately 22.5 percent of total FDI into the bloc.
- ASEAN is attracting US businesses in sectors such as electronics, semiconductors, digital infrastructure, and the electric vehicle value chain.
Meanwhile, the US exports electrical machinery, nuclear reactors, mineral fuels, and medical equipment to ASEAN. Major US investments in ASEAN are seen in industries such as electronics, semiconductors, digital infrastructure, and the electric vehicle value chain. The region’s increasing demand for digital infrastructure has attracted major cloud and data center multinationals.
US firms are also prominent in biomedical and pharmaceutical investments. ASEAN countries are seeking increased access to the US market to counter their trade dependency on China. The US is currently involved in negotiations for the Indo-Pacific Economic Framework with several ASEAN member countries.
ASEAN enjoys trade surplus in the trade of goods
ASEAN enjoys a trade surplus of more than US$250 billion – the majority of which are due to exports of electrical machinery. The bloc exported some US$73 billion of electrical machinery and equipment in 2021, which makes up 28 percent of all ASEAN exports to the US.
Nuclear reactors, boilers, and their parts contributed to US$38 billion in exports, or 14 percent, while apparel and clothing accessories and furniture contributed to approximately US$15 billion each in exports, or six percent of total ASEAN exports.
Global supply chain disruptions are driving many US companies to expand their operations into ASEAN, particularly in electronics and semiconductors. Further, the region is seeing increasing investments in the digital economy, such as for the development of data centers, e-commerce, and information and communication infrastructure.
An Overview of US Trade and Investment in ASEAN (aseanbriefing.com)
ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City, and Da Nang in Vietnam, in addition to Jakarta, in Indonesia.
About the author
ASEAN Briefing features business news, regulatory updates and extensive data on ASEAN free trade, double tax agreements and foreign direct investment laws in the region. Covering all ASEAN members (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)
