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ASEAN summit in danger: Trump's tariffs are putting a huge strain on Southeast Asia!
Trump's tariffs weigh on ASEAN countries and dominate the summit in Malaysia. Uncertainty remains about future US trade policy.
ASEAN summit in danger: Trump's tariffs are putting a huge strain on Southeast Asia!
A turbulent meeting of ASEAN leaders in Kuala Lumpur recently highlighted the challenges posed by erratic US tariff policy. The summit, which took place on May 26 and 27, has been heavily overshadowed by Donald Trump's punitive tariffs, which have a significant impact on the rapidly growing Southeast Pacific region. Loud Tichy's insight Countries such as Cambodia, Vietnam and Malaysia have been particularly affected, with 49% being levied on Cambodia, 46% on Vietnam and 24% on Malaysia before the tariffs were suspended.
In April 2025, Trump announced a 90-day suspension of tariffs for most of the world. The move came shortly before a similar deal with China that appeared to ease trade war tensions slightly. Nevertheless, uncertainty about future US tariff policy remains noticeable in the market. Vietnam in particular, which has a well-developed export industry, could face major challenges due to the constant volatility of tariffs.
The position of the ASEAN states
Leaders of ASEAN nations, which include Indonesia, Thailand and the Philippines, are concerned that the region could be flooded with cheaper Chinese goods if tariffs on U.S. products continue. They pursue a pragmatic “bamboo diplomacy” that emphasizes flexibility and resilience. This allows ASEAN countries to develop equal relations with both China and the US without having to choose between the two major powers.
An important goal of the summit was to create bilateral agreements with the USA that take into account the interests of the entire region. Malaysia stressed that decisions should not be made at the expense of other countries and is seeking a summit with Trump to discuss tariffs. However, ASEAN states are skeptical as a US court on May 29 blocked Trump's tariffs as not approved by Parliament, only to reinstate them a short time later. This unstable jurisdiction contributes to uncertainty in the market.
The impact on the economy
The trade war between the USA and China has now reached critical proportions: mutual tariffs are over 100 percent, making trade almost unaffordable. The economy faces increased risk of recession, not only in the US but also worldwide. Trump himself estimates that the short-term negative impact of tariffs will be small compared to the long-term benefits he expects from his actions. Loud Coface The price increases for industrial products could increase dramatically and thus make some products unprofitable.
The US economy is heavily dependent on global markets, which is also reflected in the current economic indicators: the value of the US dollar has fallen and rising inflation rates and a possible increase in unemployment are forecast. Trump sees tariffs as a way to reduce the trade deficit and bring foreign capital into the country. However, this attitude could lead to a loss of trust in the US government and ultimately capital flight.
The volatile situation is making it increasingly difficult for the ASEAN states to consolidate their trade strategies and minimize dependencies. An increased expansion of relations with China is likely in order to counteract the uncertainties.