Trade Dispute in Focus: ASEAN and USA Face Difficult Talks

The recently imposed significant US tariffs on Southeast Asian countries cast a shadow over the upcoming meeting between US Trade Representative Jamieson Greer and his regional counterparts in Kuala Lumpur. Originally intended to discuss a trade and investment agreement, the tariffs are likely to dominate the agenda. Southeast Asian nations rely on exports to drive their economic growth. There is considerable concern about the impact of US tariffs, which range from 19% to 20% for most regions. Laos and Myanmar are particularly affected, with a rate of 40%, while Singapore registers at 10%. Malaysian Trade Minister Tengku Zafrul Aziz, host of the economic policy talks of the 10 ASEAN states, noted that the presence of all participating ministers and the USTR underscores the importance of trade relations between ASEAN and the USA. Calculations by the United Nations Development Program show that Vietnam, as the sixth-largest exporter to the USA, must reckon with a loss of $25 billion annually due to the 20% tariffs, making it the most affected country in the region. Although ASEAN states have so far conducted individual negotiations with the USA, the threat of higher sector tariffs, for example on semiconductors, which are crucial for economies like Thailand, Malaysia, and Vietnam, may force a more unified stance. US President Donald Trump announced last month plans to impose a tariff rate of about 100% on semiconductors, with exceptions for companies that produce or commit to production in the USA.