ASEAN at a crossroads amid the trade war between Washington and Beijing
Speaking at the regional summit, Chinese Premier Li Qiang called on Asian countries to “close ranks” in the face of global challenges, primarily that of trade with the United States. Southeast Asia must maintain open markets while avoiding becoming embroiled in a trade duel between superpowers. The summit saw the ASEAN-China Free Trade Agreement upgraded. The Philippines will take over the association’s rotating presidency next year.
Kuala Lumpur (AsiaNews) – Chinese Premier Li Qiang urged ASEAN countries to "close ranks" and defend the region's economic independence in the face of what he called "bullying" and “unreasonable” trade pressure from foreign powers.
These words conceal a not-so-subtle reference to the new tariffs imposed by Washington as part of the trade war launched by US President Donald Trump.
Speaking at the 28th ASEAN-China Summit, held along with the 47th ASEAN Summit of 11 Southeast Asian nations, Li warned that the region could be "divided and ruled" if it does not act with unity of purpose.
The common goal, the Chinese premier warned, must be to present a united front in the face of intensifying global economic rivalries.
“Unilateralism and protectionism have seriously impacted the global economic and trade order, while external forces are increasing their interference in the region – many countries have been unreasonably subjected to high tariffs,” he said.
“If we do not unite and, instead, form factions in the face of power politics and economic bullying, not only will we not gain any benefits, but we will also be divided and ruled by external forces.”
At the end of his address, Li reaffirmed Beijing's commitment to working closely with ASEAN to strengthen supply chains, safeguard regional stability, and eliminate "external interference" – a clear nod to the escalating trade tensions between the United States and China, which have swept up smaller economies across Asia.
Trump: Tariff Shock 2.0
Li's remarks come in the wake of US President Donald Trump's renewed tariff regime, which took effect on 5 April, marking a sharp turn toward economic nationalism during his second term.
Under the new policy, Washington imposed a 10 per cent base tariff on nearly all imported goods, as well as punitive “reciprocal tariffs” on countries deemed to have unfair trading advantages or maintain large surpluses with the United States – a direct revival of Trump’s previous “America First” trade doctrine.
The move triggered a wave of retaliatory measures from Beijing, which slapped high tariffs on US agricultural and technology exports, tightened export controls on rare earths, and expanded trade restrictions on US firms.
Caught in between are ASEAN economies – major manufacturing and export hubs deeply integrated into both US and Chinese supply chains.
Indeed, its members have been among the most severely affected globally by US tariffs, particularly developing economies that rely heavily on export manufacturing.
Early tariff rates placed Cambodia at 49 per cent, Vietnam at 48 per cent , and Laos at 46 per cent, among the world’s highest. Malaysia initially faced a 25 per cent tariff rate, later reduced to 19 per cent after rounds of negotiations led by Investment, Trade and Industry Minister Tengku Zafrul Aziz.
Diplomatic sources said Malaysia’s reduction was made possible by “targeted concessions” and a “pro-trade commitment” under the ASEAN-US framework.
Vietnam and Cambodia have since seen tariff rates drop slightly — to 20 per cent and 19 per cent respectively — while Laos continues to face a steep 40 per cent tariff, reflecting slower progress in trade reforms and negotiations.
The renewed trade war has rattled supply chains and cast uncertainty over ASEAN’s collective economic outlook, which has grown to 11 members following the full membership of Timor-Leste.
Many regional leaders, analysts say, are increasingly looking towards deeper intra-ASEAN trade and stronger ties with China to weather the headwinds.
ASEAN at a Crossroads
Analysts note that Li's call for unity reflects both Beijing's strategy of outreach and ASEAN's struggle for balance amid the renewed US-China rivalry.
Dr Oh Ei Sun of the Singapore Institute of International Affairs said the message was “as much a warning as an invitation.”
“Li Qiang is telling ASEAN that fragmentation benefits external powers — particularly the U.S. — while unity strengthens the region’s leverage. But ASEAN must tread carefully not to appear aligned with either bloc,” Oh told The Edge.
The tone of this year’s summit, observers say, underscores how trade disputes are again redefining Asia’s political landscape — with Southeast Asia caught in the middle.
For ASEAN, the choice may not be about taking sides, but about charting a survival strategy in a world where both Washington and Beijing are redefining globalisation on their own terms.
“Only through solidarity can we safeguard the region’s long-term interests and ensure that Asia’s future remains in Asian hands,” Li said in concluding his address.
When Donald Trump returned to the White House in January 2025, he wasted no time reviving one of his signature policies — the hardline “America First” trade agenda that once shook global markets.
Within his first 100 days, Trump signed an executive order imposing a baseline 10 per cent tariff on nearly all imports, arguing that decades of free trade had “hollowed out” American industries. The move marked the most sweeping protectionist measure in modern U.S. history.
The US administration then unveiled a “reciprocal tariff framework,” targeting specific countries and sectors with higher duties — especially those with large trade surpluses or whose goods were deemed subsidised or unfairly priced.
China topped the list. Tariffs on Chinese electronics, steel, and solar panels soared above 50 per cent, triggering Beijing’s retaliation. But the collateral damage quickly spread across Asia, where supply chains are deeply intertwined with both economies.
ASEAN nations found themselves caught in the crossfire. Countries like Vietnam, Malaysia, and Thailand — key manufacturing bases for US tech and consumer goods — suddenly faced steep levies on exports, pushing regional leaders to renegotiate trade privileges or deepen ties with China.
Economists warn that Trump’s “tariff shock 2.0” risks fragmenting global trade, reversing gains made under multilateral frameworks like the Regional Comprehensive Economic Partnership (RCEP).
For Southeast Asia, the challenge now lies in keeping markets open while avoiding entanglement in a superpower trade duel that could shape the next decade of the region’s growth.
Meanwhile, the signing of the upgraded ASEAN-China Free Trade Area (ACFTA 3.0), the closing ceremony of the 47th ASEAN Summit and Related Summits, and the official “Handing Over of the ASEAN Chairmanship to the Philippines”, headlined the final day of the summit today.
.png)
05/03/2025 14:51
25/07/2025 14:01
10/10/2024 17:13
