United States

How Trump's tariffs could eventually help Asean

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  • Asean has grown into a unified economic bloc with global influence, overtaking Japan’s size by 2030 and outpacing the EU in growth.
  • Trump’s strategy of reciprocal tariffs risks backfiring, as Asean nations thrive on multilateralism and are resilient to bilateral pressure.
  • Further US trade aggression could accelerate regional decoupling and diminish American influence in the Indo-Pacific.

[WORLD] Donald Trump’s renewed threat to impose steep “reciprocal tariffs” on nations without bilateral trade deals—starting July 8—signals a return to his high-conflict, deal-by-force trade philosophy. But this time, the global landscape has shifted. Nowhere is that clearer than in Southeast Asia. The ten-member Association of Southeast Asian Nations (Asean) has quietly evolved into a high-growth economic bloc, increasingly immune to unilateral pressure. Trump’s trade nationalism may still rile China or the EU, but when it comes to Asean, Washington risks underestimating a region that’s playing a far more strategic—and cooperative—game. The lesson isn’t just about tariffs. It’s about the danger of treating rising economic coalitions as fragmented or weak when they’ve proven the opposite.

Context: Asean’s Growth Was Built on Openness, Not Deference

Asean’s transformation into a global economic engine is not an accident. Over the last two decades, it has methodically integrated itself into global supply chains. In 2000, Japan’s economy was over eight times the size of Asean’s. Today, that gap has nearly closed, with Asean set to overtake Japan by 2030. During the 2010s, Asean contributed more to global GDP growth than the European Union—a testament to its resilience and relevance.

Much of this growth has been fueled by trade liberalization, regional integration, and economic pragmatism. Asean’s trade with the world surged between 2003 and 2023, supported by free trade agreements with China, South Korea, Australia, and most recently the Regional Comprehensive Economic Partnership (RCEP). Unlike the inward-looking instincts gaining traction in the US, Asean has leaned into globalization—and it has paid off.

Leadership has played a defining role. Singapore’s Lee Kuan Yew and Indonesia’s Suharto—though ideologically and culturally distinct—found common cause in securing Asean’s unity. Their early collaboration set a precedent for pragmatic, sovereignty-respecting regionalism. That ethos continues to shape Asean’s cooperative model, insulating it from the volatility of Western political cycles.

Strategic Comparison: Trump’s Transactionalism Meets Asean’s Quiet Leverage

Trump’s economic strategy is rooted in bilateralism and zero-sum logic: countries either play by his terms or face economic punishment. This worked to some degree against individual nations during his first term, but Asean’s strength lies in its collective approach. Its “centrality” principle—enshrined in its diplomatic and economic posture—makes it difficult to isolate one member without triggering bloc-wide countermeasures.

Where Washington sees leverage in tariffs, Asean sees opportunity in multilateral hedging. Its members have not only diversified export markets, but also attracted supply chain relocations amid the US-China rivalry. Vietnam, Malaysia, and Thailand have become key beneficiaries of firms seeking “China+1” manufacturing strategies. In other words, the more the US pressures China, the more Southeast Asia gains.

While the US has struggled to secure new trade deals, Asean countries are doubling down on regional integration. The RCEP—signed in 2020—covers nearly a third of the world’s population and GDP. Meanwhile, Trump-era trade friction pushed even US allies in Asia closer to Chinese-led economic initiatives. “Asean doesn’t need to pick sides,” said Kishore Mahbubani, a former Singaporean diplomat, “because its strategy is to be indispensable to all.”

Trump’s miscalculation may be assuming that Asean states fear exclusion from US markets more than they value regional alignment. In reality, the bloc has learned to wield its cohesion as a counterweight to economic coercion.

Implication: Washington Risks Strategic Isolation in Asia

If Trump follows through on July 8 with aggressive reciprocal tariffs targeting Asean countries without bilateral deals, the likely effect won’t be submission—but further decoupling. US firms operating in Southeast Asia could face retaliation, consumers may see higher import costs, and strategic partners may accelerate trade talks elsewhere.

Moreover, such tactics undermine longer-term US credibility in the Indo-Pacific. After pulling out of the Trans-Pacific Partnership (TPP), Washington lost critical ground to China’s economic diplomacy. A second round of tariffs would deepen the perception that the US is an unreliable economic partner—big on threats, short on vision.

The smarter play would be re-engagement on multilateral terms. Yet Trump’s platform remains firmly bilateral and punitive. If the US continues to act as a disruptor rather than a partner, it shouldn’t be surprised when Asia’s next chapter is written without it.

Our Viewpoint

Trump’s return to tariff brinkmanship reflects a misreading of today’s trade realities. Asean is not a group of small, desperate economies—but a strategically aligned bloc with growing leverage. Attempts to strong-arm its members will only accelerate America’s marginalization in Asia. In a world of shifting power, coercive tactics don’t buy influence—they reveal who has already lost it. Washington must decide: does it want to lead, or just punish those who don’t follow?


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