Southeast Asia

Divided We Fall: ASEAN’s Response to Trump’s Illiberal Trade Agenda

When President Trump’s "Liberation Day" trade policy hit Southeast Asia with tariffs reaching between 32 and 49%, the region’s economic foundation didn't just crack; it splintered. While ASEAN initially projected a rare image of defiance and solidarity, that unity lasted only weeks before the bloc’s two most export-dependent members, Vietnam and Cambodia, were first to break ranks to chase bilateral side deals with Washington.

In a new analysis of the region’s response, Dr. Stewart Nixon argues that this turn toward unilateral action was a strategic mistake. By failing to maintain a collective front, ASEAN countries not only weakened their bargaining power but also exposed the bloc to deliberate fragmentation by Washington.

The risks of such an approach extend beyond immediate trade outcomes. Entering bilateral negotiations without adequate preparation risks pulling ASEAN countries into Washington’s broader geopolitical and strategic rivalry with China, particularly the weaponization of trade. The resulting agreements, he argues, heavily favor the United States and undermine the rules-based international trading system.

“Negotiating individual deals played right into Trump’s hands,” Dr. Nixon wrote. “Most ASEAN countries have ended up on the higher tariff tier regardless of what they offered in return.” He argued that a regional, collective negotiation, similar to the European Union’s approach, would have given ASEAN far greater leverage. The EU, after all, has remained on a lower tariff rung while offering few concrete concessions.

Beyond engagement with Washington, ASEAN governments have also accelerated efforts to diversify trade and investment partnerships. Negotiations for free trade agreements with the European Union have been revived in Malaysia, Indonesia, Singapore and the Philippines. Vietnam has begun exploring the possibility of a free trade agreement with the Mercosur bloc in South America. Over time, such initiatives could help reduce ASEAN’s dependence on U.S. consumers.

Still, the shift carries risks. Dr. Nixon cautions that rising tariffs could encourage informal trade, regulatory arbitrage and the erosion of international trade governance as firms seek to bypass U.S. restrictions through ASEAN economies.

While he remains skeptical about the effectiveness of domestic compensation measures and structural reforms undertaken by individual governments, Dr. Nixon sees this period as a crucial moment of preparation. If managed well, it could strengthen ASEAN’s long-term resilience and reduce vulnerability to future geopolitical shocks.

He urges ASEAN’s Geoeconomics Task Force, created after the announcement of Trump’s “Liberation Day” trade policy, and national policymakers to take a more proactive and coordinated approach. Preemptive monitoring, regional contingency planning and collective negotiation mechanisms are essential for two reasons: first, because Trump has repeatedly shown a willingness to breach agreements; and second, because ASEAN’s ability to pursue mutually beneficial development partnerships depends on preserving unity in an increasingly fragmented global economy.

Without that unity, ASEAN risks learning the oldest lesson in geopolitics the hard way: divided, it falls.

*Hnin Wint Naing is the regional communication officer at the Asia Office of the Friedrich Naumann Foundation for Freedom.