How China's pragmatic balancing puts it in Asean pole position
His latest round of tariffs, which is set to take effect
on August 1 , bodes ill for East Asia.
Japan and South Korea – two of Washington's closest allies in Asia – will see their exports hit with a 25 per cent tariff, while Southeast Asian countries such as Malaysia, Thailand, Cambodia and Myanmar will see increases of between 25 and 40 per cent.
All of these countries' economies rely on exports to the United States. The importance of the US market helps explain why the Association of Southeast Asian Nations (Asean) has not responded with reciprocal measures, with some members advocating for diversifying trade partners and increasing trade within Asean as a hedge against the US.
Malaysian Prime Minister Anwar Ibrahim made this point while addressing Asean foreign ministers in Kuala Lumpur earlier this month, saying 'we need to fortify our internal foundations. Trade more among ourselves, invest more in one another'.
Asean countries need contingency planning given the importance of US trade to the bloc's economy. Asean's goods trade with the US was worth US$476.8 billion in 2024, with more than 6,000 American companies operating in member nations. As such, it is understandable why Thailand pushed Trump administration officials to review their proposed tariff rate while Vietnam raced to
secure an agreement with Washington. Meanwhile, Japan verbally lashed out at Trump's tariffs while South Korea tried to strike a more measured tone.
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