The ASEAN Members' Response to Trump's Liberation Day

Since April 2025, the U.S. government has imposed unprecedented tariffs, sparking varied responses from its trading partners. Economist Doris Liew classifies these reactions into three categories: negotiation, retaliation, and a wait-and-see approach. Unlike other Asian counterparts, such as China, which chose to retaliate, most Association of Southeast Asian Nations (ASEAN) countries, including Malaysia, Vietnam, Thailand, and Indonesia, prefer negotiations over retaliation, primarily because they rely heavily on the U.S. market for their exports. Considering its moderate dependence on the U.S. market, Singapore has adopted a wait-and-see approach. Although their diplomatic strategies differ, they all share a concern about maintaining regional unity in response to U.S. measures. As the uncertainty on international trade policy looks likely to persist, ASEAN nations need to develop a sustainable, long-term strategy to address this challenge. 

Why Negotiations? Heavy export reliance 

Data from the Observatory of Economic Complexity indicate a high degree of export dependence on the U.S. market among some ASEAN member countries, as the U.S. is the top destination for most ASEAN exports. Most of these countries have a trade surplus with the United States, which has made them targets of its tariffs. 

The U.S. is Indonesia's second-largest export market, after China, making it vital for the country's economy. The United States accounted for 9.1% of Indonesia's total exports. The Observatory of Economic Complexity reports that Indonesian exports to the U.S. in 2023 were valued at USD 27.9 billion, while imports from the United States were valued at USD 11 billion. The United States imposed a 32% tariff on various sectors and a 25% tariff specifically on steel products. Reducing the trade imbalance has been the main focus of negotiations with the United States. 

ASEAN member states have responded not with retaliation, but with pragmatism—balancing national interests, regional unity, and long-term resilience. 

 

Like other ASEAN nations, the United States remains Malaysia's primary export destination, ranking third after China and Singapore. According to the data from the Observatory of Economic Complexity in 2023, the U.S. market valued exports at USD 41.7 billion, representing 11.9% of Malaysia's total exports. The latest data from April 2025 indicate a decline in the value of Malaysia's exports, driven by reduced exports to the United States and a significant increase in imports from it, which have risen by 120%. 

For both Thailand and Vietnam, the United States is the top export destination. The value of Vietnam's exports to the United States is USD 118 billion. This figure is significant because the United States is not even among the top 5 import sources. Although it is not as large as Vietnam's surplus, Thailand's trade surplus with the United States is also notable, with exports reaching USD 58.5 billion, while imports total USD 29.6 billion. Given this substantial surplus, it is not surprising that the United States imposed high tariffs on Thailand, reaching 36%, while Vietnam faced even higher tariffs, up to 46%. 

The United States ranks as Singapore's third-largest export market, valued at USD 32.9 billion. Unlike other ASEAN countries that have a trade surplus with the United States, Singapore imports more goods than it exports to the United States, resulting in a trade deficit of USD 10.3 billion. These conditions shape the U.S. approach to Singapore, resulting in relatively lower tariffs compared to other ASEAN nations. The United States imposes tariffs of about 10%, compared to more than 24% on some ASEAN countries, such as Malaysia, and tariffs as high as 46% on Vietnamese products.

Pragmatic Approaches: Internal and external strategies 

Given the significant dependence of ASEAN member countries on the U.S. market for exports, governments are carefully evaluating the potential consequences for local producers and industries when formulating responses to U.S. trade policies. Considering this reliance, most ASEAN member countries prioritize direct negotiations with the United States over retaliatory measures. 

To navigate these challenges, ASEAN countries have adopted several strategic approaches. First, engaging in individual talks with the United States, and second, while negotiating individually, ASEAN members are also preparing a common regional response that emphasizes the importance of multilateralism through ASEAN. Third, recognizing the vulnerability of relying on a single market, ASEAN member countries are pursuing policies to diversify their markets. Lastly, internally, ASEAN nations are implementing precautionary policies to mitigate the impact on domestic producers and employment while also undergoing domestic reforms. Through these strategic initiatives, ASEAN countries aim to safeguard their economic interests while fostering resilience against uncertainties in the global trade landscape. 

First, each ASEAN member actively engages in separate discussions with the United States to address specific trade concerns and negotiate favourable terms tailored to their national interests. Indonesia, for example, is willing to increase energy imports from the United States, including fuel, crude oil, and liquefied petroleum gas. Additionally, during Indonesia's diplomatic efforts and negotiations, it recognized that essential minerals, such as rare earth elements, cobalt, lithium, and copper, as well as other strategic resources for renewable energy, were not included in these tariffs. These exemptions allow Indonesia to manage the situation strategically. The Indonesian government can identify which commodities and products it can exempt from supply. Vietnam offers to purchase more products from the United States, ranging from Boeing airplanes to agricultural goods, in an effort to reduce the trade imbalance. Vietnam is also lowering import tariffs for liquefied natural gas and automotive products from the United States. 

As one of the ASEAN members that received the highest tariffs, Thailand's negotiation focuses on lowering tariffs to levels comparable to those of other countries, such as Malaysia and Indonesia. 

Second, while engaging in individual negotiations, ASEAN members are also working together to develop a unified regional strategy. This approach underscores the importance of multilateralism and regional cooperation, highlighting the collective voice of the ASEAN bloc in dealing with larger trading partners. The main aim is to resolve disputes through negotiations and constructive dialogue with the United States to prevent unilateral actions. As ASEAN chair in 2025, Malaysia is advancing a coordinated regional response to counter Trump's tariff policies and protect the region's economic interests. 

Third, in terms of strengthening market diversification, ASEAN countries are exploring opportunities to diversify their export destinations and fostering internal integration, acknowledging the risks inherent in relying heavily on a single market. This involves strengthening trade relationships with emerging markets and enhancing intraregional trade among ASEAN members themselves. Internally, ASEAN has intensified its internal integration efforts by upgrading its existing initiatives in trade in goods and a new initiative related to the digital economy framework. Externally, ASEAN can use the Regional Comprehensive Economic Partnership, a free trade agreement that involves ASEAN and its primary trading partners, including China, Japan, South Korea, Australia, and New Zealand. The Regional Comprehensive Economic Partnership will serve as a crucial instrument to solidify the partnership and foster economic cooperation in the region. Additionally, Indonesia’s recent membership in BRICS (along with other ASEAN member countries, such as Malaysia, Thailand, and Vietnam, as BRICS' partner countries) provides an opportunity for them to bridge relations between ASEAN and BRICS, which, in turn, will enhance their efforts to diversify into non-traditional markets. 

Fourth, the ASEAN nations are taking internal precautionary measures to reduce the potential negative impact of external shocks on domestic producers and employment. These policies may include financial support for affected sectors, training programs for workers, and incentives for businesses to adapt to changing market conditions. Singapore established a task force led directly by the prime minister to support affected industries. Similarly, Vietnam also formed a task force to mitigate the possible negative effects on the domestic economy, including protecting strategic sectors. For Indonesia, this also involves domestic reforms to overcome non-tariff barriers, which were also discussed during negotiations with the United States. The Thai government introduced a USD 15 billion stimulus package to support key parts of the economy, including helping small and medium-sized enterprises survive short-term shocks and achieve long-term growth. 

Navigating Uncertainty With Unity and Adaptability 

The imposition of U.S. tariffs posed a significant challenge for ASEAN member states, requiring them to navigate a complex geopolitical and economic landscape. Their reactions have been pragmatic and varied, focusing on diplomatic efforts rather than retaliation, pushing for economic diversification, strengthening regional integration, and both providing support for domestic industries and accelerating reform of domestic non-tariff measures. 

The tariffs, while disruptive, have accelerated ASEAN's shift toward regional integration and market diversification.

 

Although the tariffs initially caused disruptions and exposed vulnerabilities, they also unintentionally accelerated ASEAN's move toward closer intraregional connections and economic partnerships. In the long term, these strategies point to a more resilient and interconnected ASEAN that relies lesst on a single trade partner and plays a bigger role in future global trade trends. This experience underscores the importance of collective action, strategic foresight, and adaptability in navigating volatile global economic conditions. As negotiations are still ongoing and no one can foresee the results of current geopolitical dynamics, ASEAN member states should be prepared for various possible outcomes. 

Poppy S. Winanti is a Professor of International Relations in the Faculty of Social and Political Sciences at Universitas Gadjah Mada, Indonesia.