US President Donald Trump’s return to office is generating a major reshuffle in the Unites States’ foreign relations, including the imposition of tariffs on nearly every trading partner.

The stated aim of this realignment is to reshore US manufacturing while reorienting trade away from China. While ASEAN countries were among those hit hardest by the tariffs, disunity has undermined the region’s capacity to respond.

ASEAN has become the epicentre of great power competition. With economic growth of 5.5% in 2024, it is also the world’s fastest-growing region.

During the first Trump administration, tariffs were imposed on Chinese products including solar panels and other high-tech goods. Chinese firms responded by relocating manufacturing to Southeast Asia, particularly Vietnam, Thailand and Malaysia, making ASEAN the largest destination for Chinese exports.

But on 2 April 2025, Trump announced his “Liberation Day” tariffs. Cambodia, Laos, Vietnam, Thailand and Malaysia faced some of the highest tariff rates.

Soon after the announcement, Trump declared a 90-day pause, instituting a universal 10% tariff while negotiations proceeded. It became clear that a key target for high tariffs was transit goods — goods that had low value added with large import value from China — to negate the trade diversion seen under Trump’s first term.

Trump’s approach is to eschew multilateralism and pursue bilateral negotiations to skew power relations heavily in Washington’s favour with nearly all trade partners. Presently, only Russia, India and China have the economic clout and security sovereignty to stand up to US market power and not cave to pressure from Washington

Trump’s tactics were simple and effective – drop a massive bomb, draw back and make your opponent come to you with offers. The tactic leveraged a collective action problem – ASEAN could form a major grouping if unified, but by dealing with individual states, Trump induced them to bid against one another. Once one country broke ranks, all trust was lost and it was every state for themselves.

ASEAN is conditioned by the “ASEAN Way” — consensus-based decision-making centred on principles of sovereignty and non-interference. This approach slows decision-making and pushes national interests to the fore while sacrificing regional interests. ASEAN is not a supranational, singular unit or bloc like the European Union.

On 13 April, the ASEAN chair, Malaysian Prime Minister Anwar Ibrahim, announced that ASEAN would act as a bloc on US tariffs and aim to find a common position.

But Anwar’s brave pronouncement of “ASEAN unity” had already been undercut. Even before Trump unveiled his tariffs, Vietnam pre-emptively announced on 26 March that it would cut tariff rates on US liquefied natural gas and automobiles and allow US-owned telecommunications provider Starlink full access to Vietnam and ownership without a joint venture. When Vietnam was hit with 46% tariffs, it quickly announced unilateral tariff cuts to zero on 5 April.

Cambodia followed suit the same day by announcing a tariff reduction to 5% on nearly all US goods. Its vulnerability is evident in the garment industry, which accounts for 60% of Cambodian exports, generates billions in revenue and employs 750,000 workers.

On 8 April, Indonesia announced tariff cuts for most US goods to nearly zero, while agreeing to import US agricultural goods that had been cut by China. Thailand followed suit on 8 April but maintained higher rates on some products and received a US tariff reduction from 36% to 19%. Malaysia secured a temporary exemption for its semiconductor industry and a five-point reduction to its tariff rate.

Trump’s bilateral negotiating strategy first bore fruit with Vietnam,  cutting a deal on 3 July, followed by Indonesia on 16 July and the Philippines on 24 July. Beginning with Vietnam’s deal, pressure continued to build on other ASEAN governments to cut their own deals, especially after Trump’s tariff letters.

While many analysts point to China displacing the US as nearly every country’s main trade partner, this obscures a major point – China exports to the world while the United States imports. Nearly all ASEAN states have export-oriented economies, meaning their economic prosperity comes from importing, value-adding and exporting. China may be the biggest trade partner, but the US is still a primary source of wealth. Trump leverages ASEAN’s reliance on the US as a core import market in his bilateral divide and rule strategy.

This strategy has borne fruit, with ASEAN fracturing before negotiations even began. ASEAN states’ beggar-thy-neighbour responses under pressure undercut ASEAN and put them all at the mercy of Trump’s will. This was not surprising, as ASEAN has always had difficulty with quick collective action.

ASEAN unity has been found wanting, bound to consensus between 10 states, each with their own national interests. Trump has made no friends with his heavy-handed tariff approach, with former Singaporean defence minister Ng Eng Hen characterising Washington as a "landlord seeking rent".

If Trump is dissatisfied with the outcome of his tariffs in a year or two, there is no guarantee he won’t tear these deals up. It is unlikely that citizens will know the full extent of ASEAN states’ concessions as they are subject to non-disclosure agreements. But we do know that the deals’ concessions were not symmetrical or uniform.

While there are no quick fixes, a couple of reasonable pathways would be to deepen intra-ASEAN trade and investment and expand ASEAN-GCC co-operation. The latter provides unique complementarity. ASEAN states can find fertile markets for agricultural exports and imports and investment for oil and gas. The latter is ideal in that ASEAN corporates can control both upstream and downstream supply chains and value add with their developed petrochemical industries. ASEAN leaders need to get their collective acts together quickly or face being taken advantage of individually again.

Republished from East Asia Forum, 27 August 2025

The views expressed in this article may or may not reflect those of Pearls and Irritations.