While no country, friend or foe, is spared from Trump’s barrage of steepest tariffs announced on 2 April, export-reliant Southeast Asian countries are among those hit the hardest. Economic naivety dominated the Trump administration’s calculations. He arbitrarily halved the US trade deficit with other countries to determine the tariff ratio.

▲Vietnamese garment factory workers stitch apparel at a factory in Ho Chi Minh City, Vietnam, on 3 April 2025, after US President Donald Trump unveiled sweeping new tariffs on trading partners. (Huu Kha/AFP). 

On Association of Southeast Asian Nations (ASEAN) member states and Timor-Leste, the US imposed tariffs of 49% on Cambodia, 48% on Laos, 46% on Vietnam, 45% on Myanmar, 47% on Thailand, 32% on Indonesia, 24% on Brunei, 24% on Malaysia, 17% on the Philippines, 10% on Singapore, and 10% on Timor-Leste. Although Singapore and Timor-Leste are a few exceptions to having a trade surplus with the US, they also received flat 10% tariffs applied to all US trade partners. 

Just business

While imposing these tariffs, Trump disregarded the nature of US ties with these countries, their economic conditions and their willingness to address US concerns. For instance, Thailand is a treaty ally, the Philippines has strategic significance in the context of confrontation with China in the South China Sea, and Vietnam signed a Comprehensive Strategic Partnership with the US in 2023.

Trump also disregarded the consequences of these tariffs on their economies. For instance, in 2024, Cambodia exported 37% percent of its total exports and Vietnam 29% of its total exports to the US. Given their heavy dependence on exports to the US, these tariffs could lead to mass layoffs and unemployment.

Likewise, countries’ efforts to address US concerns bore no fruit. Prior to tariffs, Vietnamese officials engaged with the US to address concerns about its lopsided trade imbalance. Hanoi removed tariffs on a range of US products, increased the import of US liquified gas, and provided Elon Musk Starlink permission to begin operations in Vietnam. Thailand also made various attempts to appease the Trump administration, but to no avail. 

These tariffs indicate that the Trump administration views geopolitics and bilateral relationships as separate from trade, which emerges as its top priority. 

The devastating implications can be assessed by the fact that the tariffs announcement caused stock prices to plummet in the US and many other parts of the world, devalued currencies, and led rating agencies to revise GDP growth projections for most countries by reducing some of the percentages from earlier predictions.

On the other hand, starting from 5 April, US seaports, airports and customs warehouses began collecting 10% tariffs on all products entering US territory. The higher levies on goods from larger trading partners will begin on 9 April. Singapore’s Prime Minister Lawrence Wong termed US measures an end to the era of rules-based globalisation and free trade and a potential start of a global trade war.

How ASEAN can weather the storm

These measures can risk upending the entire global trade order, sending shock waves and leading to global recessions. This is particularly challenging for export-oriented Southeast Asian economies. However, ASEAN has a history of resilience, weathering various storms like the 1997 Asian financial crisis, the 2007-2008 global financial turmoil and the Covid-19 pandemic to name a few. With its proven resilience, ASEAN countries can take measures both individually and organisationally to mitigate the repercussions of tariffs, as elaborated here. 

ASEAN countries should avoid retaliating with tariffs in the way that China and some other countries have done. Instead, member countries should engage with the US. Vietnam, Thailand, and Malaysia have already stated that they would negotiate with the Trump administration to find a common ground. Vietnam officials held a “very productive” call with Trump and immediately sent a delegation to the US to negotiate a deal. Other member countries should also engage with the US. 

The US has also released a list of more than 1,000 product categories exempted from the tariffs. ASEAN countries should explore how they could benefit from this exemption. At the same time, governments should offer tax breaks and subsidies to exporters and most affected industries.

ASEAN should also engage with existing mechanisms established with the US, such as the ASEAN-US Summit, the ASEAN Regional Forum, and the Post-Ministerial Conference.  

A unified strategy

In addition to bilateral engagement, member countries should utilise the ASEAN platform to develop a unified strategy. Efforts in this regard have already begun. Prime Minister Lawrence Wong spoke with Malaysian Prime Minister Anwar Ibrahim, the rotating chair of ASEAN. Anwar also made telephone conversations with other member countries. The ASEAN finance ministers’ meeting on 10 April provides a timely and appropriate venue to explore collaborative efforts. Following this, the ASEAN Summit, along with ASEAN-GCC (Gulf Cooperation Council) plus China, is set for the end of May. 

Clearly, the US has adopted protectionist policies, raising barriers to its market. Therefore, besides immediate measures, ASEAN countries should devise mid-to long-term strategies. They should expand partnerships with other big countries such as China and India and regional blocks such as the GCC and EU. President Xi Jinping reportedly is visiting Vietnam, Malaysia and Cambodia in mid-April. This will provide an opportunity to discuss economic and trade cooperation in the context of tariffs.  

ASEAN should diversify its partnerships and explore alternatives. GCC, with its predominant export being energy, provides complementary opportunities to ASEAN. ASEAN should leverage its upcoming summit-level engagement with the GCC, which will take place in late May 2025. GCC countries that have started rapid modernisation and reforms provide a large market and investment for ASEAN. 

The EU, which is equally hit by US tariffs, is also thinking outside the box to find reliable partners, and ASEAN could be one of them. 

ASEAN, both as a bloc and as individual members, should also expand engagement with other groups that promote trade liberalisation and economic integration, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP), and the Asia-Pacific Economic Cooperation (APEC), among others. 

These policy measures might help ASEAN cope with the unprecedented challenges triggered by Trump’s tariff bombshell.

The article was first published at Think China, Singapore, April. 9, 2025, https://www.thinkchina.sg/economy/asean-should-choose-engagement-over-retaliation-us-trade-war.