As of Aug. 1, US President Donald Trump has finalized a sweeping set of new and brutal trade tariffs on Southeast Asian countries after a series of bilateral negotiations with the region’s leaders and trade representatives. These tariffs reflect an increasing trend toward protectionism and moving away from free trade principles and practices. 

The tariffs vary by country and reflect escalating tensions over trade imbalances, transshipment concerns, and geopolitical alignments. In all the countries, Trump managed to impose zero tariffs on US goods entering the region’s economies. Table 1 and the succeeding discussion and analysis provide a breakdown of the latest rates and the details on the impact on each country.

Laos and Myanmar are the hardest hit by the new tariffs at 40%. In Laos, low-cost electronics and textiles are affected, while in Myanmar, garments are similarly targeted. Vietnam and Thailand secured significant reductions after bilateral negotiations despite the latter earlier rejecting full liberalization for US imports. Malaysia’s semiconductor exports remain competitive as tariffs were reduced from the threatened 25% to 19%. Cambodia’s garment sector was saved as the previous 32% tariff was significantly cut down to 19%. 

The Philippines secured a small reduction from 20% to 19%, and agreed to zero tariffs on US automobiles, electronics, agriculture, and garments. What is unique about the trade deal between Trump and President Ferdinand Marcos Jr. is that it includes military cooperation and possible expansion of US military presence in the Philippines as confrontation with China becomes more intense. This could impact on sovereignty issues and security concerns in the contentious South China Sea.

Indonesia likewise secured a tariff reduction from 32% to 19%, which impacted its electronics and textile exports; it also had to commit to purchase Boeing planes and regulatory concessions. Singapore has the lowest rate of 10%, which was the original rate with sector-specific rates to be applied. Brunei’s rate of 25% (up from 24%) is considered relatively moderate given the country’s low exports to the United States. Finally, Timor Leste was not imposed new tariffs as its trade with the United States is considered negligible.

Trump’s tariffs specifically target Asian countries with seven in Southeast Asia, namely: Cambodia, Laos, Indonesia, Thailand, Malaysia, Vietnam, and Myanmar, along with South Korea and Japan. The strategy is to break up China’s regional supply chains on the transshipping of goods (i.e., the shipment of goods to an intermediate destination before reaching a final destination).

While it is a normal global trade practice, transshipments also serve to disguise original places of manufacture and origin. In the case of Chinese exports, it is seen as avoiding the new increased rates on Chinese products. The US-China trade war has seen China’s exports to the United States dropping by 43% yearly, but overall, total exports rose by 4.8% yearly. China is the largest trading partner for the Asian countries that Trump has targeted.

The immediate justification for the increased tariffs is the persistent trade deficit that America has registered with Southeast Asia. As an illustration, from 2015 to May 2025, total US exports to Southeast Asia totaled $1,279.3 billion, and imports added to $2,492.8 billion for a total deficit of $1,263.5 billion (See Table 2). 

US imports consisted mainly of electronics, garments and machinery, and exports in aircraft, agricultural products and energy. From 2023 to 2025, US imports registered huge spikes—nearly doubling from previous years partly as a result of the trade wars between the United States and China as supply chains shifted away from the latter. One factor is that US companies have moved production of their goods from China to Southeast Asia.

Other factors accounting for the trade deficits are the low labor and production costs especially in Vietnam, Thailand, and Malaysia, the emphasis on export-led growth in Southeast Asian development strategies, and global supply chain integration for semiconductors, mobile phones, and auto parts. 

Southeast Asian exports to the United States, such as electronics, garments, footwear, and machinery, are also of higher value compared to US imports of agricultural and aircraft products. Furthermore, US exports to Southeast Asia lack diversity, being heavily concentrated in aircraft, soybeans, and chemicals. America’s trade vulnerability is also reflected in its inability to secure alternative domestic or foreign suppliers for many Southeast Asian-sourced products.

What are the expected effects of the Trump tariffs on Southeast Asian countries and their economies? In the short term (0–12 months), export disruptions will take place with quick declines in shipments of textiles, electronics, and agricultural goods as higher costs and market volatility weigh in. Southeast Asian currencies will also likely weaken with lower investments (e.g., Laos, Myanmar, and Cambodia). 

Stock markets will also take a fall as investors pull back. Countries like Malaysia and Thailand will be forced to make bitter concessions on imports from the United States with the hope of lower tariffs. Confusion will arise with respect to the 40% tariff on transshipped Chinese goods through Southeast Asia as no details on enforcement have been released.

In the medium term (1–3 years), realignment of investments will take place and relocation of production sites, moving toward countries with relatively lower tariffs, such as Singapore or even Timor Leste. Southeast Asian countries may resolve to deepen ties with China with agreements such as the Regional Comprehensive Economic Partnership and the Belt and Road Initiatives to cover US losses. The regional integration of Asean (or the Association of Southeast Asian Nations) would be further undermined as member-economies accelerate competition with each other. 

In the long term, however, Southeast Asian economies may be forced to finally take seriously and be more determined to improve intraregional trade, which has been stagnant for the past decades, or failing that, pivot to alternative partners like the European Union and the Gulf states. The strain on Asean by the tariff pressures, on the other hand, could further hinder its already weak unity and render it irrelevant and meaningless as a regional economic bloc. 

Commenting on the Trump-Marcos trade deal, the Manila-based Trade Justice Pilipinas (TJP) highlighted the agreement’s unfair terms and potential negative impact on local industries (Trade Justice Pilipinas, 2025). The civil society advocacy group says the local auto industry will face increased competition from American-made vehicles, which could lead to plant closures and job losses. Small and medium enterprises supplying local auto parts will also suffer from reduced demand. 

TJP’s deeper analysis roots the Philippine woes in a flawed trade strategy reliant on free trade agreements marked by power imbalances between strong and weak economies, such as America dictating terms to the Philippines. The current agreement may deepen Philippine dependence on imports, hindering local manufacturing and job creation. As details of the Trump-Marcos deal have not been disclosed, TJP calls for transparency and accountability in trade negotiations, and for public consultations to take place. 

Trump’s tariffs on Southeast Asian economies and the diverse outcomes only serve to illustrate the total inability of Asean to function as a regional organization and take a unified stand on issues affecting its members. Just as the bloc failed to respond to the Covid-19 pandemic in a coordinated and cooperative manner, so have Asean member-states gone their separate “beggar thy neighbor” ways in dealing with Trump. Bilateral talks are akin to a “divide and conquer” strategy long pursued by developed states since the colonial era. Trump has simply made full use of the fragmented nature of Asean to bully through with his protectionist agenda.

This piece is extracted and slightly revised from Eduardo C. Tadem (2025) “Introduction: As Southeast Asia flounders, the search for alternatives becomes imperative” in the soon to be published Volume 3 of Alternative Practices Across Southeast Asia, Program on Alternative Development, UP Center for Integrative and Development Studies.