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The Diplomat
7 days ago
- Business
- The Diplomat
Trump Is Reshaping Southeast Asia's Future. Does He Realize That?
Trump and his team appear to pay little attention to the region, but whether by accident or design his policies are fundamentally altering Southeast Asia's trajectory. U.S. Secretary of State Marco Rubio meets with the press in Kuala Lumpur, Malaysia, July 10, 2025, on the sidelines of the 58th ASEAN Foreign Ministers Meeting. U.S. Secretary of State Marco Rubio was handed an unenviable task on his visit to Malaysia for ASEAN meetings last week. He needed to signal U.S. commitment to the region at the same time President Donald Trump was releasing tariff decisions on social media. Despite claiming that many ASEAN countries would receive better tariffs than other parts of the world, Rubio was handed a diplomatic rebuke by ASEAN foreign ministers, who declared that unilateral tariffs are counterproductive and 'pose complex challenges to ASEAN's economic stability and growth.' The awkward timing around Rubio's visit perhaps reflects a deeper problem: Trump and his team appear to pay little attention to the region. When it comes to global affairs, the Middle East, Ukraine, and trade with China have occupied much of their focus. Likewise, Trump's Cabinet has had only limited engagement with the region to date. In addition to Rubio's visit, Defence Secretary Pete Hegseth has visited Singapore and the Philippines. When U.S. officials do visit Southeast Asia, they've rolled out talking points about U.S. commitment to the Indo-Pacific that have done little to reassure regional countries struggling to deal with U.S. unpredictability. Despite the apparent disinterest in the region, whether by design or accident the Trump administration is making decisions that are fundamentally altering Southeast Asia's future. The question for ASEAN member states is whether they will take steps individually and collectively to avert the worst possible future. Trump is exacerbating divisions within ASEAN. Unity in the bloc has always been paper thin. It has struggled to deal with difficult issues like the South China Sea or the conflict in Myanmar. As current ASEAN chair, Malaysian Prime Minister Anwar Ibrahim has called on member states to take a coordinated approach to negotiating U.S. tariffs. The opposite has happened as each country has tried to strike its own deal with the United States. Vietnam was first out of the blocks, with others continuing bilateral talks. The United States has also widened existing differences within the bloc on how to engage China by doubling down support for its close partners and alienating others. The delicate dance that ASEAN member states do as they hedge between the U.S. and China is becoming trickier. Hegseth was vocal in his support for the Philippines, talking about an 'ironclad' alliance in the face of China's aggression in the South China Sea. Meanwhile, higher U.S. tariffs appear to be targeted at countries that are seen as leaning toward China: Laos (40 percent), Cambodia (36 percent), and Thailand (36 percent) have been hardest hit. If the main game for the U.S. is to compete with China, it's unclear why it is imposing hefty tariffs that will push regional countries closer to it. The Trump administration isn't just exacerbating regional divisions, it is altering the economic outlook. Tariff decisions will amplify and accelerate long-term economic trends, creating winners and losers. Take Indonesia. President Prabowo Subianto's 8 percent growth target is as distant as ever and even 5 percent growth seems challenging. The rupiah has weakened, the stock market has backed away from the highs of last year and the middle class is under pressure. Trump's 32 percent tariff will further weaken Indonesia's outlook. Growth will take a hit and foreign investors may look at other markets that received better tariff rates. If these trends hold long-term, Indonesia will struggle to achieve its goal of becoming a middle income country by 2045. In contrast, the strong economic outlook for Vietnam and the Philippines will be bolstered by their tariffs of 20 percent, the lowest rates in ASEAN. The tariff on Vietnam (which rises to 40 percent for transshipped goods) is likely to put a dint in its 6 percent-plus forecast growth in 2025. However, foreign investment should hold up as the tariff rate maintains Vietnam's attractiveness relative to other ASEAN economies. Likewise, forecasted growth of over 6 percent in the Philippines is likely to take a hit. As with Vietnam, the impact will be temporary and the 20 percent tariff rate will likewise strengthen its attractiveness to foreign investors relative to ASEAN peers. If these trends hold, Trump may help Vietnam and the Philippines escape the middle income trap while Indonesia becomes increasingly stuck. Nothing is ever set in stone with Trump. He's flagged yet another deadline of August 1 before the tariffs come into effect, so countries still have a chance to negotiate better deals. Of course, Southeast Asian countries have agency and are not completely beholden to Trump's whims. Individually they can choose to undertake structural reforms, adjust their growth model, and diversify trading partners. Collectively, there's room to rethink ASEAN's norms and procedures. But all these changes take time and political will. There will also be plenty of twists and turns to come, as we are not even a year into Trump's presidency. But if existing trends continue, the long-term impact will be a region that is more divided politically and economically.
Focus Malaysia
11-07-2025
- Business
- Focus Malaysia
Doubters to PMX: 'Stop appealing to US; Malaysia's BRICS involvement is the stumbling block' -
AS Madani backers praised Prime Minister Datuk Seri Anwar Ibrahim for his statesmanship by sternly conveying concern over the 25% import tariff imposed on Malaysia by the Trump's administration, detractors are casting doubt on his incessant push 'of keeping dialogue channels open'. Such was the ground sentiment after PMX yesterday (July 10) received a courtesy call from US Secretary of State Marco Rubio who was in town to attend the 58th ASEAN Foreign Ministers Meeting (AMM) in Kuala Lumpur by virtue of Malaysia being the 2025 ASEAN chairman. 'Better not to negotiate further lest the rate can shoot up to 30%,' warned a detractor on PMX's Facebook page, alluding to Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz's failure to get the reciprocal tariff rate 'reduced to 10% floor rate' despite having made two trips to Washington . Recall that the former technocrat finance minister ended up getting mocked for 'jogging around the White House' for his unfruitful trade mission between April 24 and June 19 which culminated in some three to four rounds of trade negotiations. Other doubters sarcastically nominated 'the ever smiling' Agriculture and Food Security Minister Datuk Seri Mohamad Sabu or 'the good at cracking jokes' Deputy Works Minister Datuk Seri Ahmad Maslan to spearhead the negotiation. This was when some trade-savvy commenters insinuated that Putrajaya can negotiate 'till the cows come home' for Malaysia's leaning towards the BRICS trading bloc – even only as a partner country – poses a major stumbling block. 'Going to be a mountain to climb to get reduction for the US has warned on the need to exit BRICS to be its friendly partner,' one pointed out. This came about as US President Donald Trump has personally threatened countries aligning themselves with the Anti-American policies of BRICS that they will be slapped with an additional 10% tariff. Such seems to be the general feel of many main-on-the-street Malaysians as well gauged from their reaction to a news piece by The Star that the 25% tariff rate on Malaysia is not final and there is still one month to negotiate for lower rates with the US 'First, we raised the tariff issue. He (Rubio) said the letter (by Trump) is general and we still have one more month to negotiate,' PMX had told the media after the courtesy call by Rubio. 'He (Rubio) knows that Malaysia is one of US' key trading partners in the Southeast Asia region and he will take that into consideration and raise our views.' But amid the current state of trust deficit on PMX and his Madani government , who can blame Malaysians for being pessimistic? – July 11, 2025 Main image credit: Anwar Ibrahim/Facebook
Borneo Post
08-07-2025
- Business
- Borneo Post
Trump sends letter to M'sia, US imposes 25 pct tariff on all M'sian products to US
File photo shows President Trump, accompanied by White House staff secretary Will Scharf, signing executive orders imposing the tariffs at the White House in Washington, DC, on April 2. — AFP photo KUALA LUMPUR (July 8): The United States has imposed a higher tariff of 25 percent on any and all Malaysian products sent into the country, separate from all sectoral tariffs, effective Aug 1, this year. This is one percentage point higher compared to what had been announced in April. In a letter to Prime Minister Datuk Seri Anwar Ibrahim posted on Truth Social account on Monday, US President Donald Trump said 'the 25 per cent number is far less than what is needed to eliminate the trade deficit disparity we have with your country'. However, the letter also said that there would be no tariff if Malaysia, or Malaysian companies, decide to build or manufacture products within the United States and that Washington 'will do everything possible to get approvals quickly, professionally, and routinely – in other words, in a matter of weeks'. Trump also said that if Malaysia decided to raise tariffs, the number that the country imposed will be added onto the 25 per cent that US is charging. Malaysia has been negotiating the US tariff with Washington since April, with the aim to lessen the 24 per cent tariff imposed earlier, with the latest talks held on June 18 this year. This announcement came ahead of the US Secretary of State Marco Rubio's first trip to Kuala Lumpur for the ASEAN-US post ministerial conference and other meetings of the 58th ASEAN Foreign Ministers Meeting and related meetings starting today. – Bernama anwar ibrahim donald trump tariff
Sinar Daily
08-07-2025
- Business
- Sinar Daily
US imposes 25 per cent tariff on all Malaysian products starting August
This is one percentage point higher compared to what had been announced in April. 08 Jul 2025 08:52am US President Donald Trump. Photo by Andrew Caballero-Reynolds/AFP KUALA LUMPUR - The United States has imposed a higher tariff of 25 percent on any and all Malaysian products sent into the country, separate from all sectoral tariffs, effective Aug 1, this year. This is one percentage point higher compared to what had been announced in April. In a letter to Prime Minister Datuk Seri Anwar Ibrahim posted on Truth Social account on Monday, US President Donald Trump said "the 25 per cent number is far less than what is needed to eliminate the trade deficit disparity we have with your country". In a letter to Prime Minister Datuk Seri Anwar Ibrahim posted on Truth Social account on Monday, US President Donald Trump said "the 25 per cent number is far less than what is needed to eliminate the trade deficit disparity we have with your country". Photo by Bernama However, the letter also said that there would be no tariff if Malaysia, or Malaysian companies, decide to build or manufacture products within the United States and that Washington "will do everything possible to get approvals quickly, professionally, and routinely - in other words, in a matter of weeks". Trump also said that if Malaysia decided to raise tariffs, the number that the country imposed will be added onto the 25 per cent that US is charging. Malaysia has been negotiating the US tariff with Washington since April, with the aim to lessen the 24 per cent tariff imposed earlier, with the latest talks held on June 18 this year. This announcement came ahead of the US Secretary of State Marco Rubio's first trip to Kuala Lumpur for the ASEAN-US post ministerial conference and other meetings of the 58th ASEAN Foreign Ministers Meeting and related meetings starting today. - BERNAMA More Like This
The Sun
08-07-2025
- Business
- The Sun
US hikes tariffs on Malaysian goods to 25% from August 1
KUALA LUMPUR: The United States has increased tariffs on all Malaysian products entering the country to 25%, up from the previously announced 24%. The new rate will take effect on August 1 this year. In a letter addressed to Prime Minister Datuk Seri Anwar Ibrahim and posted on his Truth Social account, US President Donald Trump stated, 'the 25 per cent number is far less than what is needed to eliminate the trade deficit disparity we have with your country.' However, the letter also mentioned an exemption for Malaysian companies that choose to manufacture within the US. Trump assured that Washington would expedite approvals for such investments, stating, 'we will do everything possible to get approvals quickly, professionally, and routinely - in other words, in a matter of weeks.' The letter further warned that if Malaysia retaliates with its own tariff hikes, the US would add those rates to the existing 25%. Malaysia has been in negotiations with the US since April to lower the initial 24% tariff, with the latest talks held on June 18. The announcement precedes US Secretary of State Marco Rubio's visit to Kuala Lumpur for the ASEAN-US post-ministerial conference and related meetings under the 58th ASEAN Foreign Ministers Meeting.
