The Trump administration’s S-E Asia policy: a new era of pressure and diversification
Governments across the region find themselves caught in a difficult balancing act
US PRESIDENT Donald Trump’s return to the White House in January 2025 has marked a dramatic shift in US relations with South-east Asia.
Central to the Trump administration’s South-east Asia policy has been its all-encompassing tariff regime, implemented as part of the president’s “reciprocal tariffs”. On “Liberation Day” (Apr 2), President Trump announced sweeping tariffs targeting every Asean member state, creating significant economic chaos across the region.
The tariff structure reflected the administration’s mixed approach to different South-east Asian countries. Cambodia faced the highest penalties at 49 per cent, followed by Laos at 48 per cent and Vietnam at 46 per cent. Thailand confronted a 36 per cent tariff, while Indonesia faced 32 per cent duties. Malaysia and Brunei each face 24 per cent tariffs, the Philippines 17 per cent, and Singapore 10 per cent.
In August, Cambodia, Thailand, Indonesia, and Malaysia saw their tariff rate reduced to 19 per cent, while Laos’ rate was adjusted to 40 per cent. The Philippines saw its rate go from 17 to 20 per cent in July, before being revised to 19 per cent.
These measures have impacted key sectors across the region, including Vietnam’s electronics and semiconductors, Cambodia’s textiles and footwear, and Thailand and Indonesia’s agricultural products and forced governments in the region to reassess their trade policies.
The tariffs represented a fundamental challenge to decades of economic integration between the US and South-east Asia.
Trade shocks notwithstanding, the Trump administration appears keen to maintain and even strengthen its military and security relationships in South-east Asia. The approach reflects the administration’s broader Indo-Pacific strategy, which views the region as a critical arena for competition with China.
Stressing the need to reassert American strength in the region, and reflecting the transactional nature of President Trump’s diplomacy, the US administration has promoted military modernisation and more direct negotiations on defence cooperation and burden-sharing arrangements.
This focus on bilateral relationships over multilateral engagement represents a departure from previous approaches to regional security building. Rather than working primarily through Asean or other regional forums, the Trump administration has advanced direct bilateral relationships that can deliver more immediate strategic benefits.
While the US administration has shown some tactical flexibility – announcing a 90-day pause on high tariffs in April and negotiating rate reductions with various countries – these moves have arguably done little to allay underlying strategic concerns. For many South-east Asian states, such abrupt policy shifts underscore American unpredictability, feeding anxiety about the reliability of Washington’s long-term economic and security commitments.
In response to this combination of economic pressure and strategic uncertainty from Washington, South-east Asian nations are actively diversifying their partnerships. This strategic realignment has pushed some closer to alternative economic blocs. Indonesia, for instance, formally joined Brics in early 2025, while Malaysia, Thailand, and Vietnam have become Brics “partner” countries.
As a result, governments across the region find themselves caught in a difficult balancing act. Their economic relationships with China and their security partnerships with the United States could force difficult choices.
This strategic diversification is most evident in a wave of new bilateral agreements that extend beyond traditional regional frameworks. The strengthening relationship between Vietnam and South Korea exemplifies this trend.
Elevating their “Comprehensive Strategic Partnership”, the two nations have agreed to double their bilateral trade to US$150 billion by 2030. This partnership has also created strategic supply chain diversification for critical materials like urea solution, reducing dependency on single sources. Meanwhile, Indonesia and the European Union appear to be making progress in ongoing negotiations on the Indonesia-EU Comprehensive Economic Partnership Agreement. Aimed to be finalised by September, the deal is projected to raise bilateral trade by around 8 billion euros (S$12 billion), and open access to new market opportunities.
This wave of bilateral negotiations demonstrates how Asean’s attractiveness as an economic partner continues to grow. The EU has been particularly active, concluding free trade agreements with Singapore and Vietnam and advancing negotiations with Indonesia, Thailand, the Philippines, and Malaysia.
Asean’s economic dynamism, robust growth and demographic advantages make its member nations attractive partners for global powers seeking to diversify their economic relationships.
The Trump administration’s South-east Asia policy presents both significant challenges and potential opportunities for the US. The economic disruption caused by tariffs has forced countries to diversify their trade relationships and reduce dependence on the American market.
While the administration’s transactional approach has produced quick results in bilateral negotiations, it could undermine confidence in the consistency and reliability of American commitments.
For the Trump administration, the challenge will be balancing its economic nationalism with the strategic imperative of maintaining influence in a region increasingly important to the Great Power Competition.
The success of this approach will likely depend on the administration’s ability to demonstrate that its economic pressure produces tangible benefits for American interests while maintaining the security partnerships essential to its Indo-Pacific strategy.
From a broader perspective, the Trump administration’s policies toward South-east Asia reflect the tensions in American foreign policy between unilateral economic measures and multilateral strategic cooperation.
How these tensions are resolved will significantly impact not only US-South-east Asia relations but the broader balance of power in the Indo-Pacific region.
The effectiveness of the Trump administration’s approach will be measured by its ability to achieve its stated goals of reducing trade deficits and strengthening strategic partnerships without undermining American influence in one of the world’s most economically dynamic and strategically important regions.
