KUALA LUMPUR – The geopolitical chessboard in Asia is being reconfigured as Malaysia, holding the 2025 ASEAN presidency, prepares to host a high-stakes summit in May with China and the Arab Gulf states. The move signals a potential shift in regional trade dynamics, driven by the ripple effects of U.S. President Donald Trump’s aggressive tariff policies.
Malaysia’s Prime Minister Anwar Ibrahim emphasized that the summit is not aimed at alienating the United States but is a pragmatic step to “ensure ASEAN’s strategic relevance in a multipolar world.” The message is clear: ASEAN is keen to maintain a balanced stance amidst growing global power competitions.
Trump’s Tariff Policies and ASEAN’s Response
Since his return to the White House, President Trump has reintroduced hardline tariff policies, particularly targeting China. While intended to bolster American manufacturing, these tariffs have disrupted supply chains and increased uncertainties in global trade. ASEAN countries, many of which have close economic ties to both the U.S. and China, are feeling the pressure to diversify their trade partnerships.
The ASEAN bloc, with a combined GDP exceeding $3.6 trillion and a population of over 680 million, represents a vital economic force. However, its economies vary widely—from highly developed Singapore to emerging markets like Laos and Myanmar. Trump’s policies have created both challenges and opportunities for the region, pushing ASEAN to seek stability through broader alliances.
The China and Gulf Connection
China remains ASEAN’s largest trading partner, with bilateral trade hitting a record $975 billion in 2024. Despite tensions over the South China Sea, economic interdependence continues to deepen. The summit presents an opportunity to reinforce the Belt and Road Initiative (BRI) projects and explore new areas of cooperation.
Simultaneously, the Arab Gulf states, led by Saudi Arabia and the UAE, are eager to strengthen their economic footprint in Asia. Gulf investors are increasingly looking towards Southeast Asia as part of their diversification away from oil dependency, aligning with ASEAN’s infrastructure and technology needs.
What’s at Stake for the U.S.?
The U.S. has traditionally been a strong partner for ASEAN, with trade volumes around $380 billion annually. However, Trump’s prioritization of bilateral over multilateral agreements has left a gap that both China and Gulf states are keen to fill. While Washington’s Indo-Pacific strategy emphasizes security alliances, ASEAN countries are equally focused on economic gains and avoiding over-dependence on any single power.
Looking Ahead
The upcoming summit could reshape trade dynamics not only in Asia but globally. As geopolitical and economic landscapes evolve, ASEAN’s balancing act will be closely watched. If the alliance successfully bridges ties with both China and the Gulf while maintaining U.S. relations, it could reinforce its role as a stabilizing force in an increasingly fragmented world economy.
For now, the message from Kuala Lumpur is measured but ambitious: ASEAN is ready to play a strategic role in shaping the future of global trade. (zai)