US President Donald Trump’s tariffs — especially the ultra-high “reciprocal” tariffs that he said would be reintroduced on July 8 for any country that has not struck a trade deal with his administration — have sent countries around the world scrambling to respond, adapt and limit the fallout. ASEAN’s 10 members — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — have been among the most proactive.
Their leaders quickly recognized that, after decades of spectacular GDP growth, ASEAN is an economic force that the Trump administration would have to reckon with in a serious way. In 2000, Japan was the world’s second-largest economy, eight times larger than ASEAN; today, it is only 1.1 times larger, and by 2030, ASEAN’s economy would overtake it. In 2010-2020, ASEAN contributed more to global economic growth than the EU did.
ASEAN owes much of that progress to open trade. Between 2003 and 2023, its trade with the rest of the world exploded, from US$618 billion to US$2.8 trillion.
Illustration: Yusha
The real secret to ASEAN’s success is strong and competent leadership, exemplified, in the grouping’s early years, by then-Singaporean prime minister Lee Kuan Yew (李光耀), a University of Cambridge-educated lawyer, and then-Indonesian president Suharto, a Javanese military leader and mystic. It was their unlikely partnership that kept ASEAN together.
Today, such leadership is exemplified by another group of seeming political opposites: Malaysian Prime Minister Anwar Ibrahim, Indonesian President Prabowo Subianto, Vietnamese General Secretary To Lam and Singaporean Prime Minister Lawrence Wong (黃循財). Anwar and Prabowo both experienced prolonged periods in the political wilderness and became friends during this time.
ASEAN’s leaders have upheld relative peace and stability in their countries, while cultivating a culture of consultation and consensus (musyawarah and mufakat in Indonesian) in guiding regional relations. That stands in stark contrast to the experiences of many other developing countries and regions.
Just a few weeks ago, neighboring India and Pakistan narrowly avoided full-scale war. The Middle East remains gripped by instability and violence, with Israel winning wars and losing the peace. The leaders of Latin America’s two largest economies, Brazil and Argentina, are barely on speaking terms.
After 48 years of regular ASEAN meetings — with more than 1,000 ministerial and lower-level meetings taking place annually — constructive engagement is a deeply engrained habit in the region. To be sure, ASEAN is often accused of lowest-common-denominator cooperation.
However, without such a measured approach, one guided by pragmatism, consensus-building and compromise, ASEAN’s member countries would not have managed to remain united through multiple shocks, including the Asian financial crisis of 1997-1998 and the global financial crisis a decade later.
ASEAN is bringing such strengths to bear in its response to Trump’s tariffs. To be sure, the individualized nature of the tariffs — which vary widely within ASEAN, from 49 percent on Cambodia to 10 percent on Singapore — limits countries’ prospects for true collective bargaining.
However, ASEAN’s member states are well aware that they are stronger together. That is why, at the just-concluded ASEAN summit in Kuala Lumpur, hosted by Anwar Ibrahim, the group proposed a summit attended by Trump and ASEAN’s 10 national leaders.
That builds on ASEAN’s April declaration that it would develop “an enhanced, robust and forward-looking ASEAN-US economic cooperation framework,” which strengthens “constructive engagement” and drives “innovative initiatives” to deliver a “mutually beneficial economic relationship,” with “particular focus on high-value sectors.”
The statement reflects ASEAN’s awareness of its value to the US, which runs a significant trade surplus in services with the region. It is no coincidence that the US invests heavily there — nearly US$500 million in 2023.
ASEAN’s value is set only to grow, owing not least to its efforts to deepen its ties with other regional organizations and economic powers. Its just-concluded summit with China and the Gulf Cooperation Council — the first of its kind — sent a clear message: ASEAN is not pinning its future on its relationship with the US, but it is not turning its back on open trade.
That aligns with the global mood. While Trump continues to brandish tariffs as a weapon against the US’ trade partners, other countries have refrained from raising tariffs unilaterally.
ASEAN is also seeking to boost internal resilience by strengthening trade among its member countries. While intra-ASEAN trade has been declining as a share of total trade, from 25 percent in 2003 to 21.5 percent in 2023, this is only because trade with the rest of the world grew so rapidly. In any case, the group is seeking to dismantle nontariff barriers — more than 99 percent of goods already flow through ASEAN tariff-free — and exploring other measures to boost trade within the bloc.
The US economy is formidable, and Trump’s tariffs might undermine ASEAN’s growth in the short term, but by spurring the ASEAN countries to deepen cooperation with one another and with others, US tariffs could bring about an even more prosperous — and, crucially, resilient — grouping.
That is especially likely if ASEAN makes the most of existing arrangements. For example, the Regional Comprehensive Economic Partnership and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which could seek to negotiate a new partnership with the EU.
Fortunately, ASEAN has the kinds of leaders who can spearhead such an effort, beginning with the bloc’s current leader, Anwar Ibrahim.
Kishore Mahbubani, a distinguished fellow at the Asia Research Institute of the National University of Singapore, is the author of many books, including The ASEAN Miracle: A Catalyst for Peace.
Copyright: Project Syndicate
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