ASEAN decides not to impose retaliatory tariffs on the United States

On April 10, the Association of Southeast Asian Nations (ASEAN) held a special online meeting of economic ministers. Regarding the tariff measures of the Trump administration of the United States, ASEAN countries unanimously agreed “not to implement retaliatory tariffs.” They will seek negotiations with the US government while promoting trade within and outside the ASEAN region to try to mitigate the impact.

After the Trump administration announced its tariff policy on April 2, ASEAN decided to hold an emergency meeting.

The joint statement issued after the meeting described the new US tariff policy as “UNILATERAL TARIFFS (unilateral tariffs)” rather than “reciprocal tariffs.” The statement expressed concern that “this will affect the lives of people in the (ASEAN) region, hinder economic development and ASEAN’s long-term economic and trade relations with the United States.”

The meeting also agreed to establish an expert platform to discuss economic and geopolitical issues.

In an interview with the Nihon Keizai Shimbun, Malaysian Minister of Investment, Trade and Industry Zafrul “welcomed” Trump’s announcement on April 9 to suspend some reciprocal tariffs for 90 days. On this basis, he said that “the 10% general tariff and the 125% tariff on China will still have an impact on the world economy and trade, including Malaysia.”

The issue of tariffs was also discussed at the ASEAN Finance Ministers and Central Bank Governors Meeting from April 7 to 10. The joint statement expressed concern that the US tariffs and countermeasures “risk increasing capital flows and exchange rate volatility.” The countries agreed to respond to market fluctuations if necessary.

As of 2023, the United States accounts for about 15% of ASEAN’s total exports. This proportion is second only to the ASEAN region and China. In order to maintain relations with the United States, ASEAN will seek to engage in dialogue without imposing retaliatory tariffs.

Prime Minister Anwar of Malaysia, the chair country, said at the Finance Ministers and Central Bank Governors Meeting held on April 10, “We will continue to maintain close contact with President Trump and presidents and prime ministers of various countries.”

ASEAN will also expand trade within the region and with other regions. In his speech on April 8, Anwar expressed a sense of crisis, saying that “the tariff storm is sweeping in, and we are witnessing the loosening of the world order. ASEAN must rely more on itself.”

ASEAN created the ASEAN Free Trade Area (AFTA) in 1992 and has been promoting trade liberalization within the region. The average tariff rate within the region has dropped to less than 1% since 2011, but ASEAN’s exports to the region are only about 20%.

In order to support trade within the ASEAN region, Malaysia proposed unified supervision, improved cross-border logistics networks, and promoted the digital economy. Singapore Prime Minister Lawrence Wong said on April 8: “Further eliminating non-tariff barriers in the region is an important step.”

ASEAN has also begun discussing strengthening relations with other countries and regions. In addition to deepening economic cooperation using the “ASEAN + 3 (China, Japan, and South Korea)” framework, it will also discuss upgrading trade agreements with China and India.