The Mirage of Leverage: How US Tariffs Are Threatening Asian Trade Partnerships

Strategic Insights -

In a significant move that has left many of its trade partners in a state of confusion and frustration, the US has imposed tariffs on several countries, including those in the Association of Southeast Asian Nations (ASEAN). The move, led by President Trump, has thrown into question the long-term strength and stability of the US market. ASEAN, which has been a key trade partner for the US, has expressed discontent with the process and is now seeking alternatives to trade with other nations.

Key Takeaways:

  • The US remains one of the top trading partners for ASEAN, with total trade valued at $476.8 billion in 2024, with US exports to ASEAN at $124.6 billion, up 16.6 percent from 2023.
  • ASEAN's trade with China has grown significantly in the last 15 years, with China becoming ASEAN's largest trading partner in 2023.
  • The US is also a major source of foreign direct investment (FDI) for the region, with over 6,000 US companies in ASEAN, supporting 625,000 jobs in the US.
  • The region is dominated by inter-Asian trade, and countries are now exploring new and existing avenues to increase trade with countries in Latin America and the CPTPP.
  • ASEAN has options to pursue trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).
  • The region is expected to grow, despite short-term economic pain, as countries increase inter-ASEAN trade and engagement with Northeast Asia, India, and Latin America.
  • Multinational and US companies that implemented the "China Plus One" strategy are now facing double-digit tariffs and Section 232 investigations, making it difficult for them to maintain their supply chains.
  • The US is isolated, and its continued inconsistency and lack of clarity around economic policy will drive Asian partners to look within or elsewhere.

Statistics:

  • US trade with ASEAN totaled $476.8 billion in 2024, with US exports to ASEAN at $124.6 billion, up 16.6 percent from 2023.
  • US imports from ASEAN totaled $352.3 billion, up 13.3 percent from 2023.
  • Trade between China and ASEAN reached 15 percent of China's total trade in 2023, up from 10 percent in 2010.
  • Japan is ASEAN's fourth-largest trade partner, with two-way trade valued at $241.1 billion, or 6.8 percent of ASEAN's total merchandise trade.
  • The Republic of Korea (ROK) is ASEAN's fifth-largest trading partner, with two-way trade valued at $208.11 billion in 2024, an increase of 5.7 percent from 2023.
  • ASEAN has joined the CPTPP, which has shown maturity and fairness in trade disputes and enforces labor laws and standards.

Sources:

  • "Economic Security Goes Hand in Hand with National Security and Diplomatic Security," Center for Strategic and International Studies (press release).
  • "US Trade with ASEAN Totaled $476.8 Billion in 2024," ASEAN (statistics).
  • "China Plus One Strategy Now Risky: A Look at the Asian Trade Agreements," Asian Trade Agreements (article).