Coal traders may find themselves among the few beneficiaries of U.S. President Donald Trump’s recent tariff policies, which have added at least 10% to the cost of a wide array of imported goods. This situation places significant pressure on energy providers across Asia, particularly in countries facing steep new tariffs.
These energy providers need to find ways to reduce power costs for their consumers, many of whom are major global manufacturers. In an effort to maintain competitiveness despite these tariffs, Asian utilities will likely increase their reliance on coal, the cheapest source of energy available.
This strategy allows factories to manage their operating costs and continue supplying products to the U.S., even as tariffs take a toll on their expenses. However, this shift towards coal is concerning for regional emissions, as increased burning of coal will exacerbate pollution problems.
Manufacturers in Asia, particularly in China and Vietnam, are the hardest hit by the tariffs—experiencing rates of 34% and 46%, respectively. These nations are significant contributors to global electronics, clothing, and furniture production.
Other affected countries like Indonesia and Cambodia also face high tariffs, which could lead manufacturers to absorb some of these costs rather than risking a drop in sales. Local governments are likely to support these companies in seeking out cost-reduction solutions to safeguard jobs.
As coal emerges as a more favorable option for power generation, coal traders are poised to benefit significantly. With coal accounting for approximately 56% of Asia’s electricity generation in 2024, its demand is expected to rise as utilities prioritize cost efficiency.
Data indicate that major manufacturing hubs are increasingly consuming coal, leading to record-high imports in 2024. Consequently, the demand for coal from Asia’s primary markets is forecasted to increase further in 2025, providing coal traders with enhanced sales opportunities.