ASEAN Trade Deals with the US: A Comparative Overview

Here’s a breakdown of the trade deals reached between the US and key ASEAN economies (excluding Singapore), based on the provided article:

Overall Trend: All discussed nations (Indonesia, Malaysia, Thailand) secured a 19% tariff rate rather of the proposed 25% from the US, but at varying costs.

1. Indonesia:

Concessions Made:
Purchased 50 Boeing aircraft.
Agreed to $19.5 billion in purchases of US agricultural and energy goods.
Implemented wide-ranging regulatory reforms.
Offered tariff-free access for most US products.
Significantly, agreed to rewrite local content requirements – a long-standing policy to protect Indonesian industries.
Bargaining Power: Relatively low, due to the nature of its exports being less critical to the US supply chain.
Potential Drawback: The concession on local content requirements sets a precedent that could hinder future industrial policy.
Possible Future Benefit: Washington is reportedly open to exempting imports of cocoa, rubber and palm oil from Indonesia.

Concessions Made:
Purchased 30 Boeing jets.
Eased some non-tariff barriers (simplified halal & facility registration for US imports).
Lifted some import bans.
Secured tariff-free access for pharmaceuticals and semiconductors exported to the US.
Stood Firm on:
Denied blanket exemption requests.
Refused to remove duties on cars,tobacco,and alcohol.
maintained existing caps on foreign equity ownership in strategic sectors.
Bargaining Power: High, due to its crucial role in the semiconductor supply chain (handles ~10% of global microchip packaging/testing and ~20% of US semiconductor imports).
Key Quote: Trade Minister Tengku Zafrul Aziz emphasized protecting local industries and maintaining competitiveness.
Possible Future Benefit: Washington is reportedly open to exempting imports of cocoa, rubber and palm oil from Malaysia.

Concessions Made:
Eliminated import duties on over 10,000 US items (out of ~11,000 total). Committed to purchasing US energy and agricultural products.
Agreed to slash its $35 billion bilateral trade surplus with the US in half within five years. Stood Firm On:
Resisted pressure to eliminate tariffs on sensitive products or those harming domestic farmers. Bargaining Power: Moderate. The article doesn’t detail specific leverage points like Malaysia’s semiconductor position.Key Takeaway: The article highlights how each country’s economic strengths and priorities shaped its negotiation strategy. Malaysia, with its critical position in the semiconductor supply chain, was able to secure more favorable terms by refusing to compromise on key areas. Indonesia, with less critical exports, made more meaningful concessions, including a potentially damaging change to its local content requirements. Thailand found a middle ground, making substantial concessions while protecting key domestic interests.

How do differing levels of economic dependence on the US and China influence ASEAN member states’ responses to US trade policy?

ASEAN’s Divided Response to US Trade Policy

The Shifting Sands of US-ASEAN Economic relations

The Association of Southeast Asian Nations (ASEAN) presents a complex landscape when it comes to navigating US trade policy. While a unified front is frequently enough projected, significant divergences exist among member states regarding their approach to Washington’s evolving trade strategies.This isn’t simply about differing economic priorities; it’s a reflection of varying geopolitical alignments and levels of economic dependence on both the US and China. Understanding these nuances is crucial for businesses and policymakers alike. Key terms related to this topic include US-ASEAN trade, regional trade agreements, economic interdependence, and geopolitical strategy.

Divergent National Interests Within ASEAN

Several factors contribute to the fractured response. Here’s a breakdown of how key ASEAN nations are positioned:

Singapore: Historically a strong advocate for free trade and a close US ally, Singapore generally welcomes US engagement and seeks to deepen economic ties. They actively support initiatives like the Indo-Pacific Economic Framework (IPEF).

Vietnam: Heavily reliant on exports to the US, Vietnam has benefited significantly from US trade.However, it also maintains strong economic links wiht China, creating a delicate balancing act. Concerns over potential US tariffs and trade restrictions are prominent.

Indonesia: As the largest economy in ASEAN, Indonesia aims for greater economic independence. While welcoming US investment, it prioritizes diversifying trade partners and strengthening regional supply chains. They are cautious about becoming overly reliant on any single nation.

Malaysia: Malaysia, as highlighted recently with Brunei backing ASEAN as a global peace model (Malay Mail, July 30, 2025), also seeks a balanced approach.They are keen on attracting US investment but also emphasize the importance of regional autonomy and avoiding geopolitical polarization.

Philippines: A long-standing US treaty ally, the Philippines generally aligns with US trade policies, though domestic economic considerations often temper their enthusiasm.

Thailand: Thailand’s response is often pragmatic, focusing on minimizing disruption to its export-oriented economy. They are cautiously optimistic about US engagement but prioritize maintaining existing trade relationships.

The Impact of US Trade Policies: Tariffs and Beyond

Recent US trade policies, particularly those under the previous administration, have had a tangible impact on ASEAN economies.

1. Tariffs on Steel and Aluminum: these tariffs, while not specifically targeted at ASEAN, affected supply chains and increased costs for manufacturers in several member states.
2. Trade War with china: The US-China trade war created both opportunities and challenges for ASEAN. Some countries benefited from trade diversion as companies sought option manufacturing locations, but others were negatively impacted by disruptions to regional supply chains.
3. Indo-Pacific Economic Framework (IPEF): The IPEF, launched in 2022, aims to establish a more resilient and secure supply chain in the Indo-Pacific region. Though, its effectiveness remains to be seen, and some ASEAN members are hesitant to fully commit due to concerns about its scope and potential implications for their existing trade agreements. Supply chain resilience is a key phrase here.
4. Digital Trade Regulations: US pressure for stronger intellectual property protection and digital trade regulations within ASEAN is creating friction, as some members prioritize domestic development and access to technology.

Case Study: Vietnam’s Balancing Act

Vietnam provides a compelling case study. The country’s rapid economic growth has been fueled by exports to the US, particularly in sectors like textiles, footwear, and electronics. Though, Vietnam also relies heavily on imports of intermediate goods from China, making it vulnerable to disruptions in the US-China trade relationship.

In 2023, Vietnam experienced a surge in foreign direct investment (FDI) from companies looking to diversify their supply chains away from China.While this presented an opportunity for economic growth, it also raised concerns about over-reliance on a single market and the potential for future trade disputes. Vietnam’s strategy has been to actively pursue free trade agreements with multiple partners, including the EU and Japan, to mitigate these risks.

Navigating the Future: Opportunities and Challenges

for ASEAN, the future of US trade policy presents both opportunities and challenges.

Opportunities: Increased US investment in infrastructure and digital economy, potential for deeper economic integration through IPEF, and access to new markets.

Challenges: Potential for renewed trade disputes, pressure to align with US geopolitical objectives, and the need to balance economic interests with national sovereignty.

Practical Tips for Businesses:

Diversify Supply Chains: Reduce reliance on single suppliers and explore alternative sourcing options within ASEAN and beyond.

Monitor Policy Changes: Stay informed about evolving US trade policies and their potential impact on your buisness.

Engage with Regional Stakeholders: Build relationships with government officials, industry associations, and other key stakeholders in ASEAN.

Invest in Risk Management: Develop strategies to mitigate potential trade risks, such as currency fluctuations and tariff increases.

The Role of Regional Trade Agreements

ASEAN’s own regional trade agreements, such as the Regional Complete Economic Partnership (RCEP), play a crucial role in mitigating the risks associated with US trade policy. RCEP,