Asean urged to weigh risks of siding with US over China in tariff war

The Star

29-04-2025

South-East Asian countries risk isolation by China and stalled growth prospects if they align too closely with the US in the trade war, a well-known Chinese political scientist has warned.
Zheng Yongnian, dean of the school of public policy at Chinese University of Hong Kong, Shenzhen, said that supporting the re-industrialisation efforts of the Association of Southeast Asian Nations was not the ultimate goal of the United States.
Rather, it aimed to bring manufacturing back to the country, whereas China was better placed to help the 10-nation regional bloc in realising its goals, he said.
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'Asean member states could be entrenched in greater challenges if their economic and trade relations with China are not managed well,' Zheng told the South China Morning Post on Sunday.
He was speaking on the sidelines of the 3rd China-Asean Economic Relations Seminar, hosted by the university's Institute for International Affairs.
'Some Asean countries would face stalled industrialisation and isolation by China if they choose to align more closely with Washington in the trade war, while the US would not assist them in achieving industrialisation,' Zheng cautioned.
Asean countries like Vietnam, Malaysia, and Thailand face a precarious balancing act as they negotiate trade terms with the Trump administration – either scale back lucrative economic ties with China, the bloc's largest trading partner, or prepare for punishing US tariffs on critical exports.
Several Asean economies including Vietnam have long served as key transit routes for Chinese exports to the United States.
Members of the bloc face between 10 and 49 per cent 'reciprocal tariffs' imposed by Trump but paused until July, compared to at least 145 per cent on China's shipments to the US in effect since April 10.
Senior US officials have urged some Asean members to address Chinese transshipment to the US, alleging tariff evasion. Vietnam, which faces up to 46 per cent tariffs, has in response cracked down on origin fraud for exports to the US.
Last week, Beijing warned regional countries against striking deals with the US at China's expense.
'China firmly opposes any party reaching a deal at the expense of China's interests. If this happens, China will never accept it and will resolutely take countermeasures,' the Ministry of Commerce said.
Dismissing concerns that China might be left isolated if the US leveraged the threatened tariffs to strike deals with Asean members, Zheng said: 'How can one even isolate a nation that conducts business with the entire world?'
America's primary interest lay in the Asean market, rather than supporting the bloc's industrialisation, and it was trying to force the Asean to choose between the US and China, Zheng said.
Asean leaders would 'be wise enough' to recognise the risks involved, he added.
China plays a key role in Asean's industrialisation efforts, through foreign direct investment (FDI) in manufacturing, supply chain integration, industrial park development and technology transfer.
According to Rhodium Group, a major portion of US import diversification through Asean export hubs has been bolstered by Chinese companies. China's FDI in the region last year was primarily focused on manufacturing sectors and accounted for 70 per cent of total Chinese FDI in Asean, it said in a note last week.
Worries are also mounting in the region that US tariff barriers would cause surplus Chinese goods to flood Southeast Asia.
Earlier this month, the Trump administration imposed 145 per cent import taxes on China, bringing the effective tariff rate to about 156 per cent. Beijing has raised its levies on US goods to 125 per cent, also on top of earlier-imposed tariffs.
As Trump's trade war sets the world's two largest economies on a collision course, neither side appears ready to initiate outreach without first securing some form of concession.
Zheng said that import duty rates were negotiable, but it was 'wrong' for the US to initiate dealings by imposing excessively high tariffs on China as a means of intimidation, and that 'such a strategy will undoubtedly prove ineffective against China'.
He added that Beijing, which had significantly more room to manoeuvre than the US, was not in a hurry to engage in talks and would take adaptive measures.
'The US-waged trade war is expected to cause a hiccup to employment and business operations within China. However, external pressure would serve as a catalyst for internal reforms, particularly enhancing domestic circulation and consumer demand,' Zheng said, pointing to significant developmental potential in China's central and western regions.
'Let's first see what the agreement between the US and Japan looks like before we make any moves. There is no need for Beijing to rush,' he said, referring to the first round of Tokyo-Washington tariff talks earlier this month.
Not all countries will be pivoting towards Washington as Trump's tariffs cause worldwide economic uncertainty, according to Zheng.
'More nations will instead choose to distance themselves from the US,' he said.
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