Malaysia’s foreign minister has called on Southeast Asian nations to deepen regional economic integration and present a united front in their attempts to address the current global trade uncertainties resulting from sweeping U.S. tariffs.
Speaking in Kuala Lumpur yesterday following a meeting of Association of Southeast Asian Nations (ASEAN) foreign ministers, Mohamad Hasan said that the bloc’s member states were among the nations “most heavily affected” by the “reciprocal” tariffs announced by President Donald Trump last month.
“The U.S.-China trade war is dramatically disrupting production and trade patterns worldwide. A global economic slowdown is likely to happen,” Mohamad said, according to an Associated Press report. “We must seize this moment to deepen regional economic integration, so that we can better shield our region from external shocks.”
In President Donald Trump’s “liberation day” tariff announcement on April 2, Southeast Asian nations were slapped with rates ranging from 17 percent (the Philippines) to 49 percent (Cambodia), the latter being among the highest of any nation. Recognizing the potentially existential threat that this poses to their model of export-led industrialization, several nations, including Vietnam and Thailand, have already begun negotiations with the Trump administration over a possible reduction of the tariffs.
As I noted last week, virtually every high-level bilateral meeting involving Southeast Asian nations over the past two months has included discussions of the U.S. tariffs and the resulting economic uncertainties, as well as pledges to deepen bilateral economic integration and bolster trade.
Alongside the conflict in Myanmar, the tariffs are likely to be high on the agenda during today’s 46th ASEAN Summit in Kuala Lumpur. Late last week, Nikkei Asia reported that ASEAN leaders are set to express “deep concern” over the Trump administration’s tariff policy at today’s 46th ASEAN Summit. The news outlet quoted a draft chairman’s statement asserting that rising uncertainties, including U.S. tariffs, “pose complex and multidimensional challenges to ASEAN’s economic growth, stability, and integration.” In response, ASEAN will reaffirm its “collective commitment to a rules-based, open, inclusive, transparent, and non-discriminatory multilateral trading system,” with the World Trade Organization at its core.
Since “liberation day,” Malaysia, the current ASEAN chair, has vowed to shepherd the creation of a united regional response to the Trump tariffs. In a statement in early April, Prime Minister Anwar Ibrahim said that his government “will lead efforts to present a united regional front, maintain open and resilient supply chains, and ensure ASEAN’s collective voice is heard clearly and firmly on the international stage.”
On April 10, Malaysia chaired a meeting of ASEAN economic ministers that affirmed the bloc’s support for “maintaining a predictable, transparent, non-discriminatory, fair, inclusive, and open regional economic environment which has underpinned growth in regional trade and development.” In a related meeting, Anwar called on ASEAN to “rely more on itself.” He said, “This means strengthening intra-ASEAN trade. We must move beyond rhetoric to execution.”
Speaking yesterday in KL, Mohamad said that Malaysia has requested the convening of a special summit with the U.S. in order to discuss tariffs and said that it was hopeful that this could happen later this year. This effort would complement the efforts of individual nations to negotiate an improved tariff deal with the Trump administration, although its success, given the very different trade relations that each ASEAN nation has with the U.S., remains uncertain.
In light of the considerable challenges that ASEAN faces in increasing intra-regional trade – intra-bloc trade made up just 21 percent of the ASEAN total in 2024, according to ASEANstats data cited by Nikkei Asia last month, compared to around 60 percent for the European Union – the preferred option will likely be to pursue a more even spread of trade with external partners.
In 2024, China accounted for 20 percent of regional trade, with heavy ASEAN imports. The U.S. followed with 12 percent, made up mostly of exports from ASEAN member states. The European Union made up 8 percent, while trade with the six GCC members made up around 3.5 percent.
On this front, Malaysia’s Investment, Trade, and Industry Minister Tengku Zafrul Aziz announced yesterday that ASEAN has concluded negotiations on upgrading the ASEAN Trade in Goods Agreement, first signed in 2010, and the China-ASEAN Free Trade Area, which was agreed in 2002. According to a report by Channel News Asia (CNA), the enhanced deals are expected to be signed in October, Malaysia’s told reporters yesterday.
“We remain confident that these milestones will serve as a pivotal enabler for ASEAN’s sustained growth and competitiveness,” Tengku Zafrul said after chairing an ASEAN Economic Community Council Meeting, CNA reported. He also warned the bloc against inaction as it seeks “to navigate an increasingly volatile global economic landscape.”
“ASEAN would need to break away from a business-as-usual approach,” Tengku Zafrul added. “We need to adopt bolder, more agile and more forward-looking strategies. We need to safeguard and advance ASEAN socioeconomic interests.”
Tengku Zafrul said every ASEAN member is a “sovereign nation” and should be supported in pursuing bilateral tariff negotiations with Washington. “But it’s important that in all these meetings, we also reiterate the ASEAN position,” he added.
There is also a strong likelihood that ASEAN will continue to reach out to other economic partners, and reduce its overall reliance on the United States as an export market. Today’s ASEAN Summit will be followed by the second summit between ASEAN and the Gulf Cooperation Council (GCC), which comprises. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. This will then be followed by the first-ever meeting between ASEAN, China, and the GCC. It would be unsurprising if both of these meetings did not include a heavy emphasis on economic and trade cooperation.
