Southeast Asia Navigates US Trade Policy Amidst Trump’s Potential Return

Southeast Asian nations are cautiously assessing the potential implications of a second Donald Trump presidency on existing trade agreements and economic partnerships with the United States. Despite calls for renegotiation or cancellation of certain deals, officials in countries like Indonesia and Malaysia are signaling a commitment to preserving these arrangements to maintain broader bilateral relations with Washington. This stance reflects a recognition of the US’s continued importance as a key security partner, a technology leader, and a significant source of foreign direct investment in the region.

Preserving US Relations: A Priority for Southeast Asia

Joanne Lin, Senior Fellow and Coordinator of the ASEAN Studies Programme at the ISEAS–Yusof Ishak Institute in Singapore, emphasizes that preserving broader bilateral relations with the US will remain a priority for Southeast Asian countries. This is particularly true for nations that have already established reciprocal arrangements with the US, as abandoning these deals could jeopardize their standing with a potential second Trump administration. Source: CNA

Trump’s Stance and Potential Sanctions

Donald Trump has previously threatened to impose more severe sanctions on countries that attempt to circumvent existing tariff agreements, signaling his intent to enforce compliance with US trade policies. This warning is directed towards governments that might be tempted to reconsider agreements already in place with Washington. Source: CNA

Impact of Supreme Court Ruling on Tariffs

A recent Supreme Court ruling has effectively leveled the playing field for many Southeast Asian economies. Prior to the ruling, the Trump administration imposed a 48% tariff on goods from Laos, the highest in the region at the time, due to concerns about transshipment – the practice of rerouting goods through intermediary countries to avoid US tariffs. China initially faced a 57% tariff, which was later negotiated down to 47%, ironically lower than the tariff imposed on Laos.

Beneficiaries of the Court Decision

Vietnam and Thailand are expected to be the primary beneficiaries of the Supreme Court’s decision. In 2024, Vietnam exported US$142 billion worth of goods to the US, previously subject to a 20% tariff. Thailand shipped US$66 billion, facing a 19% tariff. Laos, in comparison, exported US$849 million in the same year. Source: CNA

Singapore’s Perspective on a Second Trump Term

Singapore appears to be an outlier among Southeast Asian nations in its outlook on a potential second Trump administration. A survey conducted by the ISEAS – Yusof Ishak Institute’s State of Southeast Asia 2025 Survey (SSEA 2025) revealed a decline in trust and optimism among respondents in Singapore regarding Washington’s role in Southeast Asia under a second Trump term. Source: IRSEA The survey included perspectives from 242 respondents in Singapore. Source: IRSEA

Expert Insights on ASEAN-US Relations

A recent ASEANFocus article by Thomas Benjamin Daniel, Joanne Lin, Don McLain Gill, John Lee, Maria Monica Wihardja, and Brian Eyler highlighted that the re-election of Donald Trump is poised to reshape ASEAN-US relations across multiple domains, including geopolitics, trade, and technology. Source: ISEAS – Yusof Ishak Institute (LinkedIn)