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Hamzah Rifaat
Hamzah Rifaat

Opinion | How China’s pragmatic balancing puts it in Asean pole position

Prioritising Asean’s needs over ensuring reciprocity has given China a level of credibility the US lacks amid Trump’s trade tirades

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Illustration: Craig Stephens
Hamzah Rifaat

There is no sign that US President Donald Trump is going to budge on his tariff policy. The 90-day pause on his “Liberation Day” tariffs does not preclude his penchant for protectionism or punishing countries for adopting what he sees as unfair trade practices.

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.

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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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For China, the ripple effects of Trump’s tariffs on Southeast Asia hit home. The region is an important part of its sphere of influence, regional connectivity prospects and trade liberalisation drives such as the Asean-China Free Trade Area, encompassing cooperation on digitalisation, green economics and supply chain management with Asean member states.
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