ASEAN countries Face Higher Duties than neighbors

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HANOI/JAKARTA/MANILA/KUALA LUMPUR – The recent conclusion of tariff negotiations between the United States and several Asian countries has revealed a stark disparity: while South Korea and Japan secured a reduced 15% import tariff into the U.S., ASEAN countries such as the Philippines (19%), Indonesia (19%), and Vietnam (20%) face significantly higher rates. Malaysia, notably, is expected to shoulder a 25% tariff, and negotiations with Thailand remain unresolved.

Why Are ASEAN Countries Paying More?

There are several overlapping factors:

1. Economic Scale and Strategic Value

South Korea and Japan are highly industrialized economies with deep-rooted technological, defense, and trade ties with the U.S. They possess stronger global supply chain roles, especially in semiconductors, automobiles, and advanced manufacturing — industries the U.S. sees as critical to its own competitiveness and security. Their leverage in negotiations is correspondingly greater.

ASEAN economies, while rapidly growing, are still viewed as secondary partners in terms of industrial complexity and global economic weight. For example, Malaysia’s exports are more fragmented and less essential to U.S. national strategy than Korea’s or Japan’s.

2. Negotiation Preparedness and Alignment

ASEAN countries may have underestimated the urgency and leverage required in the face of Washington’s aggressive trade stance under former President Donald Trump. Unlike Japan and South Korea, which deployed coordinated, high-level diplomatic and commercial efforts, some ASEAN nations appeared reactive rather than proactive. Lack of cohesive regional negotiation also diluted their individual bargaining power.

3. Geopolitical Positioning

The U.S. views South Korea and Japan not just as trade partners but as pivotal allies in the Indo-Pacific region, particularly in counterbalancing China. This strategic calculus often translates into more favorable trade terms. Some ASEAN nations, on the other hand, have adopted more non-aligned or China-friendly positions, which may have influenced their weaker outcomes.

What Discussions Will Now Erupt in ASEAN?

The uneven outcomes are likely to trigger several internal and regional discussions:

  • Domestic backlash against trade negotiators for perceived failure to secure fair terms.
  • Calls for stronger regional trade coordination to prevent future disparities.
  • Debates about alignment—some voices may argue for closer ties with the U.S. to gain better treatment, while others could advocate a pivot toward China or alternative markets.
  • Pressure from exporters and industries, particularly in Vietnam and Malaysia, who fear losing price competitiveness due to tariff burdens.

Expected Effects

  • Export Slowdown: Higher tariffs could dent ASEAN exports to the U.S., especially in electronics, textiles, and automotive parts.
  • Investment Diversion: Foreign investors may prefer Korea or Japan over ASEAN for manufacturing hubs due to more favorable U.S. trade terms.
  • Regional Friction: The disparity may strain ASEAN unity, as countries with higher tariffs push for a coordinated response or compensation mechanisms.

ASEAN must build a united front

Unless ASEAN countries recalibrate their trade diplomacy and present a more unified front, they risk further marginalization in bilateral negotiations. The U.S.’s transactional approach under Trump favors those who bring both strategic relevance and robust negotiating tactics to the table — and, in this round, ASEAN came up short. (zai)