As the prospect of Donald Trump returning to the White House looms, Southeast Asian nations are bracing for potential economic and security implications. Regional experts suggest that while challenges are imminent, the region’s growing resilience may offer a buffer against global uncertainties.
“In a repeat of 2017, we’re all bracing for another Trump presidency,” said Edcel John A. Ibarra, an assistant professor at the University of the Philippines Diliman, during a panel hosted by the Lee Kuan Yew School of Public Policy (LKYSPP). “But while there are risks, there are also opportunities, though the mix will differ depending on who you’re asking.”
President-elect Trump’s core positions — aversion to open borders, free trade, and American interventionism abroad — remain consistent, presenting both challenges and opportunities for Southeast Asian nations navigating US foreign policy shifts.
Joining Professor Ibarra on the panel were Muhammad Habib from Indonesia’s Centre for Strategic and International Studies (CSIS), Hoang Thi Ha from the ISEAS – Yusof Ishak Institute, and
Dr Denis Hew from the Centre on Asia and Globalisation at LKYSPP. Their collective insights highlighted a region more resilient than during President-elect Trump’s first term, but still facing uncertainties in trade, security, and regional integration.
Economic Implications: Trade Wars and Supply Chains
The potential economic impact of a second Trump presidency is a significant concern. Dr Hew anticipated a more intense US-China trade war with far-reaching effects on Southeast Asia.
“Southeast Asian countries are not immune to rising trade tensions that will be imposed on China and the rest of the world,” he said. “Increases in tariffs are going to disrupt supply chains again, impacting many countries in Southeast Asia, particularly in semiconductors and consumer electronics.”
Beyond immediate trade tensions, Dr Hew expressed worries about “geo-economic fragmentation” — a reversal of globalisation that could lead to segmented labour markets, reduced productivity, and inflation. “We’re seeing overall greater trade fragmentation that might happen around the world. And that’s something to be worried about,” he said.
Ms Hoang noted that President-elect Trump’s threats of unprecedented high tariffs on both China and imports globally could send shockwaves through supply chains. She cautioned that if these tariffs materialise, they could reduce GDP growth across Southeast Asian economies by about one per cent.
Vietnam’s experience illustrates both opportunities and risks. Amid previous US-China trade tensions, Vietnam benefited from companies adopting a “China Plus One” strategy, with its trade surplus with the US tripling between 2017 and 2022. However, stricter rules of origin requirements under a renewed Trump administration could jeopardise these gains.
“They will be very stringent on the rules of origin,” Ms Hoang said. “And of course, we will suffer immensely.”
Despite these challenges, ASEAN’s economic strength offers some protection. As a potentially integrated market of US$4 trillion, it could provide a buffer against global economic uncertainty.
“It’s very important for ASEAN to step up its regional economic integration,” Dr Hew said. “To provide a buffer in an increasingly uncertain economic environment.”
Security Implications: Uncertainty Over US Alliances
A second Trump presidency also brings uncertainty to Southeast Asia’s security landscape, especially amid escalating US-China strategic competition.
“The most interesting development to watch is the internal reconciliation within the Trump administration about how to approach China,” Ms Hoang said.
While advisors may adopt strategic positions, Trump’s transactional approach could create policy tensions affecting alliances and security partnerships built under the Biden administration.
In response, Southeast Asian countries are strengthening their own security partnerships. The Philippines, for example, is expanding strategic relationships with
Japan,
South Korea, and
Australia.
“There are real worries Trump may be lured to accept a deal with China that involves a reduction of US presence and support in the Indo-Pacific,” Professor Ibarra said. However, he remained sceptical about the prospects of a “grand bargain” involving the South China Sea, “China will not be able to present a bargain good enough for Trump,” he noted.
Regional Resilience and Adaptation
Despite anxieties over a second Trump term, Southeast Asian nations are not passive observers. By managing expectations and focusing on strategic autonomy, they continue to pursue national interests amid uncertainties.
Mr Habib noted that Indonesia, not being a formal US ally, remains realistic about its relationship with Washington. “We manage our own expectations,” he said, acknowledging limits to what Indonesia can expect from the US.
Vietnam, on the other hand, demonstrates pragmatic engagement. Ms Hoang highlighted how Southeast Asian pragmatism intersects with Trump’s transactional approach. She cited
a significant deal between a Vietnamese company and the Trump Organisation to build a US$1.5 billion golf course and hotel complex, illustrating Vietnam’s strategy to balance relationships with major powers.
The region’s experience in dealing with uncertainty has reinforced its focus on diversification and resilience. Ms Hoang emphasised that Southeast Asia is now “more prepared, capable, connected, and resilient” than before. After the US withdrawal from the Trans-Pacific Partnership (TPP), the region moved ahead with the Regional Comprehensive Economic Partnership (RCEP) and is now negotiating agreements like the Digital Economy Partnership Agreement (DEPA).
Adapting to a Changing Global Order
The implications of a second Trump presidency reflect deeper changes in the global economic order. Trump’s protectionist policies suggest long-term transformations rather than temporary disruptions.
However, Southeast Asia approaches this with strengthened resilience and strategic adaptability. “The region is more resilient — not just living through the trade war, but living through the pandemic,” Dr Hew said. Countries are diversifying economic partnerships, strengthening regional frameworks like RCEP, and deepening intra-regional integration.
For ASEAN, Dr Hew sees potential in leveraging the bloc’s collective economic power. “We do have that economic clout, and that economy could get even bigger and stronger if we all work together,” he said, suggesting regional integration could provide crucial leverage against global uncertainties. But despite concerns about potential disruptions, he maintained a cautiously optimistic outlook. “It all depends on how the global economy is going to turn out over the next couple of years,” he said. “I’m still more positive.”