The Trump administration’s tariff announcements last week sent shockwaves through the global economy, initially sparking fears of a trade war–induced recession.

While the administration has set a sudden 90-day pause on the tariffs as of Wednesday and has begun entertaining bilateral negotiations with individual countries, it is clear that in the near-term uncertainty is the only certainty.

This article examines how Trump’s “reciprocal” tariffs strategy, calculated via a controversial trade-imbalance formula, are roiling markets and why Southeast Asia’s startup ecosystem could be especially vulnerable. We discuss immediate fallout on supply chains, manufacturing hubs, e-commerce, and fintech in the region, and explore how founders and investors might adapt strategically to these turbulent times.

The Quirky Maths of Liberation Day: Tariffs, Imbalances, and Controversy

Trump’s initially announced tariffs marked a seismic shift in U.S. trade policy. Effective immediately, a baseline 10% tariff applied to imports from most countries, with steep surcharges on 57 major trading partners starting next week (reuters). The White House unveiled a formula tying tariff rates to bilateral trade imbalances: essentially half of the U.S. goods trade deficit as a percentage of that country’s exports, with a minimum rate of 10% (Reuters). This quirky math has produced tariff levels ranging from 20% on the EU up to near 50% on some nations.

The approach is highly controversial. Critics pointed out that by basing duties on trade deficits, the policy penalizes countries that import relatively little from the U.S. – often poorer economies. For example, Cambodia faced 49% tariffs on its exports to the U.S., despite being one of Asia’s least developed nations. Even U.S. allies with whom the U.S. runs trade surpluses (like Britain and Brazil) were hit by the baseline 10%, under the claim that their deficits would be larger “if their policies were fairer”.

Economists have ridiculed the formula as “nonsense numbers” and “deeply misleading”, noting it ignores actual foreign tariff rates or market conditions. The EU slammed the 20% tariff on its goods – four times the EU’s average tariff on U.S. products – as a “colossal inaccuracy”. In short, Trump’s tariff gambit breaks with decades of multilateral trade norms, replacing them with an arbitrary, imbalance-driven levy.

Fearmongering of Tariffs: Global Market Turmoil and Recession Fears

The immediate market reaction has been violent. Within two days of Trump’s announcement, U.S. equities shed an astonishing $5 trillion in value, with the S&P 500 suffering a record decline. Investors fled risk assets en masse: oil and commodity prices plunged and money rushed into safe-haven government bonds. Global stock markets from Tokyo to London tumbled as hopes for a soft economic landing evaporated.

Economists now warn that a worldwide recession or even stagflation could be on the horizon. JPMorgan raised its odds of a global recession by year-end to 60% (up from 40% before). With tariffs driving up import costs, consumers face price spikes on everything from sneakers to smartphones – one analysis says a high-end iPhone could cost nearly $2,300 after these tariffs. Such cost inflation, paired with slumping trade volumes and business confidence, creates a toxic mix reminiscent of 1970s stagflation. Indeed, Trump’s measures amount to the highest U.S. trade barriers in over a century.

The head of the IMF has warned of a “significant risk to the global outlook”, and world leaders are scrambling. Major U.S. trading partners like China and the EU have vowed counter-tariffs, though most other nations – lacking leverage – are seeking negotiations over retaliation.

Southeast Asia: Risks and Resilience

For Southeast Asia’s emerging economies – many of which rode globalization to growth – Trump’s tariff offensive is a gut punch. In fact, Southeast Asian countries were among the hardest hit by the Liberation Day announcement. Vietnam faced a punitive 46% U.S. tariff on its exports, Thailand 36%, Indonesia 32%, and even Myanmar 44%, eclipsing the rate on Chinese goods (theguardian.com).

This is bitter irony: these nations benefited from the U.S.–China trade war in Trump’s first term as manufacturers adopted a “China+1” strategy, shifting production from China into Vietnam, Cambodia, and others. Now they find themselves in the crosshairs.

Vietnam, where exports to the U.S. equal nearly 30% of its GDP, saw its stock index dive almost 7% and its currency hit an all-time low on the news (reuters.com). With every ASEAN economy now facing U.S. tariffs (from 10% on Singapore up to 49% on Cambodia), Southeast Asia’s export-driven growth model is under threat.

What can the higher tariff regimes mean for the region’s vibrant tech startup ecosystem? In the near term, plenty of challenges:

(1) Supply Chain & Logistics Startups: Venture-backed logistics platforms could see business disrupted as global trade flows re-route. Higher U.S. import costs may dampen shipment volumes, and complex customs rules might strain cross-border delivery networks.

On the other hand, as companies recalibrate supply chains to circumvent tariffs, these startups can seize opportunities. Firms diversifying sourcing away from China will lean on regional logistics partners.

Agile 4PL providers can add value by finding cost-efficient routes (for instance, routing through tariff-exempt countries or leveraging free-trade zones) – though outright transshipment to dodge tariffs will face scrutiny. In short, logistics startups must be ready to help clients derisk and regionalize supply chains, even as overall volumes wobble.

(2) Manufacturing & Sourcing Startups: Southeast Asia’s reputation as a manufacturing alternative gets a double-edged boost. Startups facilitating manufacturing in Vietnam, Indonesia, or Malaysia might have expected windfalls from “China decoupling,” but Trump’s blunt tariffs change the calculus.

With Vietnamese exports slapped with 46% duties, production could have shifted again – perhaps to tariff-exempt Mexico or to Indonesia/Malaysia if their rates (32% and 24% respectively) are lower (foreignpolicy.com).

Platforms that connect global buyers to factories in Southeast Asia may need to emphasize countries with more favorable trade status or help local manufacturers move up the value chain. Advanced manufacturing startups focusing on automation or cost-efficiency could become critical as producers seek to absorb tariff costs rather than pass them on.

At the same time, regional governments will likely court U.S. officials for tariff relief – if deals emerge (as Vietnam is attempting), manufacturing-focused ventures should be ready to ramp back up. In essence, startups in this space must stay nimble and possibly pivot target markets (e.g. intra-Asia or EU demand) until U.S. trade terms stabilize.

(3) E-Commerce & Consumer Platforms: Many Southeast Asian e-commerce companies depend on affordable imported goods – whether it’s Chinese-made electronics sold on Shopee or fashion items shipped from abroad. Tariffs, by raising upstream costs, threaten consumer affordability. While Trump’s tariffs don’t directly tax goods moving into Southeast Asia, the indirect effects are real.

A global downturn would squeeze spending power across the region. Currencies may weaken if investors pull back, making imports pricier in local terms. Startups in online retail may need to adjust by localizing inventory and sourcing more products domestically or within Southeast Asia.

For instance, a regional furniture e-tailer might pivot to work with Vietnamese or Indonesian suppliers (who now have excess capacity if U.S. orders drop) to sell within ASEAN markets. Additionally, consumer fintech services – like Buy Now Pay Later or lending – could see higher demand if prices rise, but also greater risk if households come under stress. E-commerce leaders will have to balance passing on higher costs to customers against maintaining growth, likely by innovating on supply and financing.

(4) Fintech & Cross-Border Finance: Payments and fintech startups with cross-border exposure will need to navigate heightened currency and compliance risks.

Tariff turbulence often leads to forex volatility; Startups offering treasury management or hedging solutions (such as Insignia-backed Finmo, a global treasury platform) might actually find greater demand, as companies urgently seek to manage currency and interest rate exposures in this uncertain climate.

Another consideration: if U.S. protectionism persists, Southeast Asia might accelerate adoption of alternatives to the U.S.-dominated financial rails – potentially boosting fintech innovation around local currency settlements, digital trade finance, and even cryptocurrency for cross-border commerce. Fintech founders should brace for short-term headwinds but be ready to support clients through the choppy waters of trade-related financial volatility.

Despite these challenges, Southeast Asia’s startups have resilience on their side. The region’s large domestic markets and growing middle class can provide a buffer if global trade stumbles. Moreover, adversity often breeds innovation: tough times in the late 1990s Asian Financial Crisis, for example, spurred structural reforms and new business models. Today’s founders can similarly adapt – whether by tweaking business models, exploring new markets, or doubling down on efficiency.

Adapting Strategies for a Protectionist Era

In this climate of “America First” economics, startups, founders, and investors in Southeast Asia should consider strategic shifts to weather the storm:

(1) Derisk Supply Chains: Startups reliant on international supply chains must avoid single-country dependence. This could mean multi-sourcing critical components (China+Vietnam+Indonesia rather than just China), building inventory buffers, or using flexible manufacturing partners.

Software platforms that provide visibility and agility in supply chain management will be at a premium. Founders should highlight to investors how their supply chain strategy hedges against geopolitical shocks.

(2) Regionalize Operations: In an era of tariff walls, focusing on regional (ASEAN) markets and South-South trade could yield more stable growth.

For example, a SaaS provider for exporters might pivot to serve intra-Asia logistics firms, not just Asia-to-U.S. trade. ASEAN’s intra-regional trade agreements and the RCEP trade pact offer startups a relatively free trade zone to capitalize on. By tailoring products to Southeast Asian consumers and businesses, startups can reduce exposure to any one superpower’s policy whims.

(3) Focus on Value and Efficiency: If tariffs make raw costs higher, efficiency is key. This is a time for startups to streamline operations and bolster unit economics. Those in manufacturing or e-commerce can explore more automation, AI-driven demand planning, and cost-saving innovations. Startups that can offer cost reductions or productivity gains to customers will have an edge when everyone is looking to tighten margins.

(4) Financial Hedging and Resilience: Currency swings and inflation pressures mean startups should practice prudent financial planning. Founders may consider hedging key expenses, pricing in local currencies when possible, and conserving cash to extend runway.

Investors, meanwhile, might shift funding toward sectors that inherently hedge against trade risk (e.g. platforms that enable diversification, or fintech tools that profit from volatility). It’s also prudent for VCs to reserve dry powder for portfolio companies that might need bridge financing if revenue dips due to macro conditions.

(5) Leverage Policy and Partnerships: Startups should stay alert to government measures that could mitigate the impact. Some Southeast Asian governments are already in talks with the U.S. for tariff exemptions or adjustments (reuters.com). Others might roll out stimulus or support for affected industries.

Engaging in dialogue through industry groups or forging partnerships can position startups to benefit from any relief. Additionally, if global companies look to SEA as part of their solution (to sidestep tariffs on China), local startups should seize partnership opportunities – for instance, a U.S. retailer seeking new suppliers might connect with a Southeast Asian B2B marketplace startup.

Innovation Opportunities Amid Tariff Regimes: Southeast Asia’s Path Forward

In the face of unprecedented tariff barriers, Southeast Asia stands at a critical juncture—one that presents not just challenges but significant opportunities for innovation. While the immediate impact of Trump’s tariff regime has been disruptive, forward-thinking companies are already developing strategies to navigate this new landscape and even thrive within it. This section explores how businesses can transform tariff challenges into innovation catalysts, with examples from Insignia Ventures Partners’ portfolio companies that demonstrate resilience and adaptability in this changing environment.

The Innovation Imperative in a Tariff-Heavy World

The current tariff landscape has fundamentally altered the calculus for businesses operating across borders. With Southeast Asian countries facing some of the steepest tariffs—Cambodia at 49%, Vietnam at 46%, Myanmar at 44%, Thailand at 36%, and Indonesia at 32%—the region’s export-driven growth model faces an existential challenge. Yet history shows that trade barriers often accelerate innovation, forcing companies to reimagine their operations, products, and business models.

As noted in Insignia Business Review, “The U.S.-China trade war is reshaping global tech, and Asia is at the center of this transformation. The startups and corporates that adapt, diversify, and partner wisely will turn uncertainty into opportunity” (review.insignia.vc, 2025). This perspective frames tariffs not as insurmountable obstacles but as catalysts for necessary evolution.

The T.A.R.I.F. Framework: A Strategic Response

To navigate this complex environment, businesses can employ the T.A.R.I.F. Framework developed by Insignia Ventures Partners, which provides a structured approach to innovation amid tariff regimes:

1. Trade & Supply Chain Resilience

Supply chain reconfiguration represents perhaps the most immediate response to tariff pressures. Companies are rapidly diversifying manufacturing beyond traditional hubs, creating opportunities for startups that facilitate this transition.

AwanTunai, an Indonesian fintech startup in Insignia’s portfolio, exemplifies how innovation in supply chain financing can build resilience. By combining supply chain financing with enterprise resource planning (ERP) technology, AwanTunai has revolutionized Indonesia’s FMCG supply chain, providing inventory purchase financing to MSMEs that form the backbone of the economy.

During the COVID-19 pandemic—another major supply chain disruption—AwanTunai maintained a remarkable 3% NPL rate while the industry average soared to 20-30% (review.insignia.vc, 2025). This resilience demonstrates how digitizing supply chains and providing working capital solutions can help businesses weather external shocks, whether from pandemics or tariffs.

Eezee, another Insignia portfolio company, addresses supply chain resilience from a different angle. As Singapore’s top B2B procurement marketplace, Eezee streamlines the procurement process for industrial hardware and supplies, reducing ordering time from up to two weeks to just five minutes. With over 130,000 items across 600+ categories from nearly 2,000 suppliers, Eezee helps businesses like ExxonMobil, Shell, and Zuellig Pharma maintain operational continuity even when primary supply chains are disrupted by tariffs (review.insignia.vc, 2022).

By integrating with existing Enterprise Resource Planning (ERP) systems, Eezee creates a seamless procurement experience that accelerates the process by approximately 90%. This efficiency becomes particularly valuable when businesses need to quickly pivot to alternative suppliers in response to tariff-induced price increases or supply chain disruptions.

Eezee CEO Logan Tan shared his thoughts on LinkedIn:

“In conversations with manufacturers across the region, there’s a consistent view emerging, where short-term caution is warranted, but long-term plans remain unchanged.

Indonesia, Vietnam, and Thailand continue to attract investment. The shift toward decentralized manufacturing is accelerating—not reversing.

“We’re likely to see (1) export-heavy segments pause or rebalance procurement, (2) global brands reinforce their China+1 strategies, and (3) regional sourcing and procurement agility move from back-office to boardroom priorities.

If history is a guide, we learn from recent events like COVID, the Suez blockage and Red Sea disruptions. One thing that is for sure is that businesses that invested in visibility and flexibility came out stronger.”

Similarly, Janio, a full-stack 4PL platform in Insignia’s portfolio, addresses fragmentation in Southeast Asia’s complex cross-border supply chain network. Founded in 2018, Janio operates as an asset-light business that integrates across the entire logistics value chain, giving clients across the region and mainland China greater control over their supply chains going in and out of Southeast Asia.

In a high-tariff environment, Janio’s ability to streamline documentation and paperwork becomes particularly valuable, as regulatory complexity increases with changing trade regimes. By leveraging data and machine learning to create differentiated service corridors, Janio helps businesses optimize their cross-border logistics, potentially finding cost-efficient paths amid tariff barriers.

2. Adversarial Retaliation & Regulatory Navigation

As trade tensions escalate, regulatory complexity increases exponentially. Companies operating across borders must navigate not just tariffs but potential retaliatory measures and shifting compliance requirements.

This regulatory maze creates opportunities for regtech solutions that help businesses maintain compliance while operating in multiple jurisdictions. Startups developing tools for regulatory intelligence, automated compliance, and cross-border data governance are positioned to thrive in this environment.

3. Regional Trade & Economic Realignment

The tariff regime is accelerating regional economic integration within Southeast Asia, as businesses look to nearby markets to offset U.S. market challenges. The RCEP and CPTPP trade agreements provide frameworks for this intra-regional trade growth.

This shift creates opportunities for startups that facilitate cross-border commerce within ASEAN, from logistics platforms to localization services. Companies that can help businesses navigate the complexities of regional trade will find growing demand for their services.

Shipper, an Indonesian logistics startup in Insignia’s portfolio, exemplifies this trend by providing end-to-end digital supply chain solutions for businesses of all sizes in a highly fragmented market. Founded in 2017, Shipper connects via proprietary software the country’s largest tech-enabled logistics network of 3PL providers, first-mile delivery agents, micro-fulfillment hubs, and warehouses across Indonesia. As businesses seek to optimize their domestic logistics networks in response to international trade disruptions, Shipper’s platform enables them to quickly adapt their supply chain strategies. This visibility and control across the supply chain helps businesses manage costs and maintain competitiveness despite tariff pressures, while facilitating the regional economic realignment necessary in a high-tariff environment.

Similarly, First Circle, a merchant trade platform for small business commerce, supports smaller enterprises in navigating trade complexities and provides trade financing solutions that can help buffer tariff impacts.

4. Investment & Capital Strategies

The tariff environment has profound implications for how businesses finance their operations and manage currency risks. Investors increasingly favor companies with diversified supply chains and regional growth strategies, while businesses need sophisticated tools to manage financial volatility.

Finmo, another Insignia portfolio company, has built a global Treasury Operating System (TOS) that addresses these exact challenges. As described by Insignia Business Review, Finmo represents “a new phase in innovation: consolidation” by bringing together digital payment infrastructure, payment rails for specific use cases, and digital workflows around payments (review.insignia.vc, 2025).

With licenses and registrations across Australia, New Zealand, Singapore, and the U.S., Finmo helps businesses manage cross-border payments and FX in volatile environments—precisely the capabilities needed when tariffs introduce new financial uncertainties. The company’s cashflow management solutions become critical when tariffs impact costs and margins, enabling businesses to diversify cashflow management during economic uncertainty.

As Finmo CEO David Hanna explains, “That’s our moat, having the ability to connect directly into the banking infrastructure. To do that, you need licensing. You can control the end-to-end experience with our merchant base, and you should be robustly regulated” (review.insignia.vc, 2025).

Complementing Finmo’s approach, Fluid empowers B2B businesses with seamless payments and flexible terms—a critical capability in tariff-disrupted markets. By providing flexible payment terms, Fluid helps businesses manage cash flow challenges during trade disruptions and absorb tariff-related cost increases without sacrificing operational continuity. This financial flexibility becomes a competitive advantage when navigating the unpredictable impacts of changing tariff regimes.

5. Final Consumer & Pricing Innovation

Ultimately, tariffs impact end consumers through higher prices. The challenge for businesses is developing pricing strategies and product adaptations that maintain competitiveness despite these pressures.

This creates opportunities for innovation in pricing models (subscriptions, dynamic pricing), product localization to reduce costs, and value-driven messaging that justifies price adjustments. Companies that can help businesses optimize pricing or develop market-specific product variants will find growing demand.

Emerging Innovation Opportunities

Beyond the T.A.R.I.F. framework, several specific innovation opportunities are emerging in response to the tariff regime:

1. Supply Chain Digitization & Optimization

Digital tools for supply chain visibility, AI-powered demand forecasting, and blockchain for supply chain transparency are becoming essential rather than optional. These technologies help businesses maintain agility in rapidly changing trade environments.

Eezee’s procurement platform exemplifies this trend, providing businesses with digital tools to streamline sourcing and supplier management. By digitizing traditionally manual procurement processes, Eezee helps businesses reduce operational costs and respond more quickly to supply chain disruptions, potentially offsetting some tariff impacts.

Janio’s approach to cross-border logistics further demonstrates this trend. By building a modular software layer that integrates across the entire logistics value chain, Janio creates visibility and control that helps businesses navigate the complexities of international shipping in a high-tariff environment. Their use of data and machine learning to optimize service corridors represents the kind of technological innovation that becomes essential when trade barriers rise.

2. Financial Solutions for Trade Uncertainty

Cross-border payment solutions, treasury management systems, and trade finance innovations support businesses affected by tariffs. Companies that reduce transaction costs or provide hedging against currency volatility deliver immediate value.

Fluid’s B2B payment platform with flexible terms represents a direct response to this need, helping businesses manage cash flow during periods of trade uncertainty. By providing flexible financing options, Fluid enables businesses to maintain operations even when facing unexpected tariff costs or payment delays due to customs complications.

3. Localization & Regionalization Technologies

Solutions supporting manufacturing relocation, regional market entry, and platforms connecting local suppliers with global buyers help businesses adapt to the new geography of trade. These technologies facilitate the “China+N” strategy that many companies are now pursuing.

Shipper’s end-to-end digital supply chain solutions exemplify how technology can help businesses optimize their domestic logistics networks when international trade becomes more challenging. By connecting 3PL providers, first-mile delivery agents, micro-fulfillment hubs, and warehouses across Indonesia, Shipper creates a robust domestic logistics infrastructure that can help businesses reduce their dependence on international supply chains affected by tariffs.

Similarly, First Circle’s merchant trade platform helps small businesses access regional trade opportunities that might otherwise be inaccessible due to financing constraints.

4. Cost Optimization Through Technology

Automation, AI, and energy efficiency solutions help offset the increased costs imposed by tariffs. As margins come under pressure, these technologies become strategic necessities rather than nice-to-have improvements.

5. Regulatory Technology & Compliance

Tools to navigate complex trade regulations, manage dual-market compliance requirements, and govern data across borders reduce the administrative burden of the new trade landscape.

The Path Forward: From Short-Term Adaptation to Long-Term Advantage

While the immediate response to tariffs is often defensive—focused on minimizing damage—the longer-term opportunity lies in using this disruption to catalyze fundamental business transformation. Companies that view tariffs as merely a cost problem will struggle, while those that see them as an innovation imperative can emerge stronger.

Southeast Asia’s startups and corporates have several inherent advantages in this environment. The region’s experience with economic volatility has built resilience into business DNA. Its diverse economies offer natural hedges against country-specific risks. And its growing digital infrastructure provides the foundation for rapid innovation.

As the World Economic Forum recently noted, “The new US tariff regime rewrites the global trade playbook. Asia now has the opportunity to lead the reinvention of globalization” (weforum.org, 2025). Southeast Asian companies that embrace this opportunity—leveraging innovative solutions like those provided by AwanTunai, Finmo, Eezee, Fluid, Janio, Shipper, and First Circle—can transform today’s tariff challenges into tomorrow’s competitive advantages.

In an age defined by finding alternatives, adapting to new tariff regimes is not just about survival—it’s about seizing the opportunity to build more resilient, innovative, and ultimately more successful businesses.

Conclusion

Trump’s tariff salvo has undeniably created headwinds for Southeast Asia’s tech ecosystem. The region’s startups face a challenging period ahead as they navigate this new trade landscape. However, with strategic adaptation and a focus on innovation, many will not just survive but thrive amid these disruptions, emerging stronger and more resilient than before.