The paradox of economic interdependence and strategic anxiety underscores ASEAN’s urgent need for unity and legal clarity.
nited States President Donald Trump’s return to sweeping tariffs—including a 25 percent levy on auto imports, a 10 percent tariff across the board and a steep 32 percent reciprocal rate on Indonesian exports—marks a defining moment in the reshaping of global trade and power dynamics.
For Southeast Asia, and especially for Indonesia, this is not just another chapter in the US-China rivalry; it is a direct economic hit. Key Indonesian sectors such as textiles and shrimp exports have already been feeling the pinch, while the rupiah has tumbled to its lowest point since the 1997-1998 Asian financial crisis.
But more than a predicament, this is a call to action. The era of multilateral globalization is fading. What comes next must be defined by regional resilience, energy independence and strategic vision.
Currently, Indonesia is undergoing a foreign policy shift. President Prabowo Subianto’s appointments of Prof. John Mearsheimer, a leading voice in offensive realism, and Prof. Jeffrey Sachs, a Nobel laureate in economics and global advocate for sustainable development, suggest a dual doctrine, security strength guided by social justice. This blend may prove crucial in navigating a world of economic coercion and hardening alliances.
While Trump’s tariffs are aimed at domestic politics, their impact on Southeast Asia will be significant. ASEAN economies, deeply integrated into global supply chains centered around Chinese manufacturing, face serious disruptions, especially in intermediate goods and autoparts. This protectionist shift undermines trust in the US as a stable economic partner, even as its role as a security counterweight to China continues to grow.
China’s regional role is equally complex. Despite deep economic ties with Southeast Asia, trust deficits persist. According to the ISEAS–Yusof Ishak Institute’s State of Southeast Asia: 2024 Survey Report, many in the region remain wary of China’s strategic ambitions.
While over 50 percent of respondents expect relations with China to improve, significant concerns remain, particularly regarding China's assertive actions in the South China Sea and Mekong region. Just recently, for example, skirmishes between Beijing and Manila in the natural resource-rich maritime territory have been intensifying.
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