Southeast Asia Is on the Front Lines of the U.S.-China Trade War

The U.S.-China trade war has recently shown some signs of a truce that could sustain talks. But this has brought little refuge for global markets, given that a snap decision by the White House could swing U.S.-China tensions back into high gear. Because of their proximity to and deep integration with regional supply chains (and with China in particular), Southeast Asian countries are among the best-positioned to benefit from the manufacturers leaving China to escape U.S. tariffs. Indeed, Vietnam has emerged so far as the clear winner on this front, though even it isn't immune to the world's fraught economic outlook. The strengthening U.S. dollar, for one, has roiled Southeast Asian currencies, while declines in global demand have sapped Southeast Asia's vital export revenue. The global headwinds also pose a challenge to the region's political orders built on delivering rising prosperity -- forcing each country to balance benefits with risks to maintain its...