Southeast Asian leaders agreed that any bilateral trade deals with the US should not harm other ASEAN member economies, said Malaysian Prime Minister Anwar Ibrahim after the Kuala Lumpur summit.

The leaders discussed US tariffs that could impose 32% to 49% levies on six ASEAN countries by July 2025, urging that talks protect the region’s shared interests of over 650 million people and a combined GDP exceeding US$3.8 trillion.

Anwar revealed he has asked US President Donald Trump for a meeting to discuss how these tariffs affect ASEAN nations.

The summit also focused on Myanmar’s crisis, calling for a nationwide ceasefire to ease violence after the 2021 coup displaced more than 3.5 million people.

The summit, which included leaders from Gulf nations and China, concluded with a call for continued efforts to stabilize the region amid its economic and political challenges.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ ASEAN’s delicate balancing act amid growing trade tensions

The current tariff situation reflects a long-standing pattern where Southeast Asian nations must carefully navigate relationships with competing global powers.

ASEAN has consistently sought to maintain economic autonomy while facing pressure to align with either the U.S. or China, with regional leaders explicitly expressing concerns about being forced to choose sides 1.

The stakes are particularly high given that ASEAN collectively represents a $3.9 trillion economy with 678 million people, making it the third-largest economy in Asia and seventh-largest globally 2, 3.

The U.S. remains ASEAN’s fourth-largest trading partner with bilateral trade valued at approximately $476.8 billion in 2024, while simultaneously ASEAN maintains a significant trade surplus of over $250 billion with the U.S. 2, 4.

This economic interdependence explains why Malaysia’s Prime Minister Anwar Ibrahim is actively seeking direct engagement with U.S. leaders, as disruptions to this trading relationship would have outsized impacts on the region’s export-driven economies.

2️⃣ Trade diversion benefits unevenly distributed across Southeast Asia

Previous U.S.-China trade tensions have shown that tariff impacts vary dramatically across ASEAN members, creating potential internal tensions within the bloc.

Vietnam emerged as a clear beneficiary during earlier trade disputes, with exports to the U.S. surging by 36% in early 2019 compared to the previous year, suggesting some countries may privately welcome certain aspects of U.S. tariff policies 5.