What does Trump's transshipment crackdown mean for Asian industrial property?

South China Morning Post

3 days ago

US President Donald Trump's administration has Asia's economies
in its sights . The region has become more trade-dependent since the 2018-19 US-China trade war. Asia ex-China's trade surplus with the US doubled from September 2019 to US$400 billion at the end of last year.
However, it is not just the widening trade imbalance that has incurred the Trump administration's wrath. The surge in Asian, particularly Southeast Asian, exports to the US was accompanied by a
sharp increase in Chinese imports in many countries in the region. In Vietnam, Indonesia and Thailand, the share of imports from China has risen to 28-39 per cent, up from 20-30 per cent in 2015, according to Nomura data.
The correlation between Asia's exports to the US and its imports from China underpins a key plank of Trump's new trade strategy:
cracking down on 'transshipments' in an attempt to stop China using other Asian markets as a back door for repackaged exports to the US, avoiding the higher tariffs placed on goods exported directly from China.
Trump's efforts to reduce China's role in Asian supply chains pose a bigger challenge to the region's economies than the ones they faced during the 2018 trade conflict, some of which turned into opportunities as several economies capitalised on the effects of
trade diversion
In the property industry, the manufacturing-driven industrial and logistics sector is the most vulnerable to the disruption and reshaping of world trade. Asia's
industrial real estate , which includes properties used for manufacturing, distribution and storage of goods, is ground zero for the impact of tariffs on commercial property.