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ASEAN and China should join hands in facing trade storms
As a regional mechanism only established in recent years, the RCEP is arguably underperforming compared with its potential.
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Myanmar's Permanent Secretary of Foreign Affairs Aung Kyaw Moe (from left), Philippine President Ferdinand Marcos Jr, Singaporean Prime Minister Lawrence Wong, Thailand's Prime Minister Paetongtarn Shinawatra, Vietnam's Prime Minister Pham Minh Chinh, China's Premier Li Qiang, Laos' Prime Minister Sonexay Siphandone, Malaysia's Prime Minister Anwar Ibrahim, Brunei's Sultan Hassanal Bolkiah, Cambodia's Prime Minister Hun Manet, Vice President Ma'ruf Amin and Timor-Leste's Prime Minister Xanana Gusmao pose for a group photo at the 27th ASEAN-China Summit during the 44th and 45th ASEAN Summits in Vientiane on Oct. 10, 2024. (AFP/Nhac Nguyen)
Asia, in general, enjoys a large trade surplus with the United States, and this makes the region a main target of President Donald Trump’s global trade war. Data from the US Census Bureau shows that in 2024, five of the top-10 trading partners with the largest trade deficits with the US were Asian economies: China, Vietnam, Taiwan, South Korea and India.
The economies of ASEAN are particularly vulnerable. Among ASEAN’s 10 member states, five have a trade surplus worth more than US$10 billion with the US: Vietnam, Thailand, Malaysia, Indonesia and Cambodia. Exports to the US contribute 3 percent to Vietnam’s gross domestic product (GDP), 25 percent to Cambodia’s and around 2 percent to Indonesia’s.
In addition, Trump’s trade war comes at a time when ASEAN economies have been strengthening their competitive advantage in their exports to the US. Data from the Office of the US Trade Representative revealed that the US goods trade deficit with ASEAN was $227.7 billion in 2024, an 11.6 percent increase ($23.6 billion) over 2023.
ASEAN now runs the third-largest trade deficit with the US, only slightly after China and the European Union, and far ahead of traditional US trading partners like Japan ($68 billion) and South Korea ($66 billion).
Southeast Asian countries are among the hardest hit in the Trump trade war, with Cambodia, Laos, Vietnam and Indonesia facing 49, 48, 46 and 32 percent tariffs, respectively.
In every crisis, there always lies a great opportunity. In this trade chaos launched by the world’s most powerful country, ASEAN and China should remember that they are powerful, too, and that together they can tap into bilateral, regional and multilateral partnerships to weather the storm.
