U.S. global trade policies seem to have taken a protectionist turn, creating ripple effects for businesses worldwide, including Southeast Asia. In early April 2025, the United States imposed sweeping new tariffs – a blanket 10% levy on all imports, a massive 54% rate on Chinese goods, and hefty duties on exports from many Southeast Asian nations, including 46% on Vietnam and 32% on Indonesia.
Other countries in the region were not spared as tariff rates on ASEAN countries now range from 10% for Singapore and Timor-Leste up to nearly 50% for Cambodia. This trade shock is sparking broad economic uncertainty. A key question is how these tariffs are affecting marketing budgets, especially for companies operating in or targeting Southeast Asia. Are firms slashing ad spend, boosting marketing to compensate, or reallocating resources in new ways?
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To find out more, we spoke to Terng Shing Chen, CEO and Founder of SYNC PR. He runs a regional agency that covers the impacted markets and has experienced the previous economic shifts, such as COVID and even the SARS epidemic many years back.
There was growing optimism earlier in the year with Asia-Pacific ad spending forecast to grow by nearly 6% in 2025, with 86% of CMOs in APAC expecting budget increases. However, this seems unlikely given the current state of the market. Looking ahead, we will expand on this issue to understand where companies are moving to and how it impacts the overall region.
Have you seen a downturn in marketing budgets since the tariffs?
Yes, there has been a noted reduction in overall marketing budgets recently, but that seems to be part of a larger trend over the last few years. In Singapore, we have continued to see lower overall spend – marketing, advertising and PR – each year, and it is the same for most of the region. The tariffs seem to have exacerbated the issue rather than caused it.
But, I think the issue is a bit more complicated than just tariffs, as more marketing leaders are now faced with budget constraints and demands for greater accountability. We are starting to see companies fundamentally reshaping their marketing strategies in the region. Unfortunately, a clear pattern is emerging: brand-building and long-term campaigns are taking a backseat, while performance marketing and immediate ROI are front and centre.
To clarify, I am not against justification and a strong focus on ROI, but we are fundamentally ignoring what makes a great brand, and that is, ultimately, brand building.
How do you see these changes impacting the overall marketing industry in Southeast Asia?
Currently, most marketing teams are doubling down on channels and tactics that drive quick, measurable outcomes, such as targeted digital ads, search marketing, e-commerce promotions, and other performance-driven initiatives. We will likely see more brands pulling back on big-budget awareness or image campaigns that are harder to tie to sales.
While not universal, there is a trend of reallocating budgets toward digital channels. In most cases, digital advertising allows for real-time metrics and quick optimisation. Some brands are fast-tracking their e-commerce, social media, and influencer marketing plans since these can directly drive online sales and offer clear analytics. Traditional mass media spend (TV, billboards and such) is more likely to be reduced unless it can be tied to short-term results or is crucial for maintaining baseline awareness.
We will likely see the real impact a year or two from now. Acquisition costs will continue to rise across the region, and companies will be faced with a less loyal customer base who are driven by bargains or perceived value and not by the actual brand.
Are agencies going to struggle during this period?
Probably. I would think quite a few of them would feel the pinch, but it will likely hit in 2026 or later this year, as new budgets will be drawn up. I believe some agencies are bracing for leaner times, so we are likely to see hiring freezes, more project-based work (instead of big retainer contracts), and even more competition among media sellers to offer discounts or added value to advertisers. We might see some impact for media outlets too, as we may see slower ad spend growth, as even companies that depend less on advertising could still see small revenue drops due to the broader economic effects of the tariff.
Are certain industries going to be more impacted than others?
So, I think a lot of different industries will be severely impacted due to supply chain issues, and this will indirectly impact marketing spend. Global trade has been critical to most of the market’s economic growth, so this uncertainty means that we, as an entire region, have to find new markets to sell to.
A likely industry to feel the pinch would be the overall consumer electronics sector, including smartphones and appliances. Higher component costs and potential price increases mean slimmer margins, which can translate to smaller marketing budgets. Tariffs will likely make international brands less price-competitive against local or tariff-exempt rivals, which will impact global marketing spend that trickles down to Southeast Asia.
We might see B2B industries like semiconductors and automotive parts – major export industries for countries such as Malaysia, Vietnam, and Thailand – be among the hardest hit. Marketing and sales budgets in these sectors are probably coming under heavy scrutiny. Since the ongoing tariffs will directly raise the cost of their products in the U.S. market, this will dampen growth for the industry. I don’t think it is reckless to imagine that if the demand from the U.S. drops, these B2B companies will respond by cutting discretionary spending, which for most is the marketing budget.
What’s next for the region?
Most likely, companies are going to be more agile with their budgets, ready to cut, increase, or redirect spending at a moment’s notice depending on economic signals. In the near term, the dominant response to U.S. tariffs has been belt-tightening and refocusing, with most marketers concentrating on core markets and proven tactics. Agencies will continue to feel the pinch and need to be agile.
If the tariffs persist or even escalate, we can expect continued pressure on marketing budgets through 2025. However, it’s not all gloom. Hopefully, this will be an opportunity for innovation and strategic reinvention. Smaller brands will thrive as they will have the ability to shift focus and budgets quickly, most likely grabbing market share from slower brands.
We will also see local players or multinationals that are less affected by tariffs might seize market share by maintaining their marketing spend, while others pull back. History shows that brands which keep investing during downturns often rebound stronger when conditions improve. Thus, we may see a divergence: the generally cautious trend, but also a few bold companies strategically investing in marketing through the headwinds to position themselves for the long run.