The
aggressive US tariffs under President Trump signal a broader unravelling of the global economic order. For Southeast Asia, the fallout cuts across trade, security, and domestic stability, forcing governments to rethink long-held assumptions about economic alignment and strategic neutrality.
Our experts at the Lee Kuan Yew School of Public Policy (LKYSPP) weigh in:
What Trump’s tariff shock means for alliances between America and Asia
“The effects of US tariffs will profoundly reshape America’s role in Asia. On top of the economic fallout and the unravelling of the rules-based economic order that the US has built up and that the region has by and large supported, the broader impact will be felt in alliance politics and in the security realm. These unilateral tariffs could affect the credibility of US security guarantees and decades of deep engagement in the region as a force of stability. With the United States firing the first salvo, countries in Southeast Asia may not choose to directly retaliate for now, but will undoubtedly begin to lay the groundwork for rethinking their engagement strategies with the United States, as they invest in greater regional cohesion and resilience, and expand on their strategic diversification to help achieve greater certainty and stability in regional order.”
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Dr Chin-Hao Huang, Associate Professor
“China’s trade dependence has dropped from 67% in 2006 to 33% in 2023, and exports to the US now account for only around 15% of total exports. Meanwhile, China has been actively diversifying its international markets, with total exports to global south countries already surpassing those to developed nations. This diversification helps cushion the impact of US tariffs. Domestically, targeted policy support for foreign trade enterprises will also likely be rolled out.
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In short, under the weight of reciprocal high tariffs, both China and the US will suffer significant losses. This is, in essence, a contest of comprehensive national strength. Both sides hold key bargaining chips, like a staring contest to see
who blinks first.”
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Dr Gu Qingyang, Associate Professor
“Effective diplomacy with the US could unlock a new era of
economic growth for Vietnam — positioning the country as a key player in high-value regional supply chains and as a leading exporter of digital and service-based industries.”
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Dr Vu Minh Khuong, Practice Professor
Trump’s tariffs and their implications for Asia
“Trump’s aggressive, across-the-board tariffs — announced in the immediate aftermath of Liberation Day — mark a sharp escalation in US protectionism. For Southeast Asian economies like Singapore, Malaysia, and Vietnam, which had opportunistically and adeptly positioned themselves as neutral hubs in the Biden-era supply chain realignment, this shock rollout couldn’t have come at a worse time. These “connector economies” had benefited from rising geopolitical fragmentation, attracting investments from both China and the US by offering stability and strategic neutrality. But Trump’s tariff-first approach now threatens to undo those gains.
True to form, Trump remains fixated on tariffs as a singular policy tool — tasked with addressing everything from trade deficits and reshoring to industrial policy, raising fiscal revenue, and geopolitical leverage. This use of a fundamentally blunt instrument is clearly flawed.
That said, Washington isn’t alone in distorting global trade flows. Beijing has long relied on subsidies, state-driven industrial policy, and an opaque regulatory framework — issues that successive US presidents, from Obama onward, have attempted to address, albeit unsuccessfully. Obama promoted the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as a solution; Trump 1.0 imposed tariffs specifically targeting China; and Biden has maintained and even tightened those tariffs, while strategically ramping up US industrial policy and trying to coordinate with allied and like-minded partners on China.
In an environment where neither of the two largest economies is playing by the established rules of global trade, and neither is blameless, Southeast Asia finds itself caught in the middle. With the global economy becoming more fractured and deglobalised, regional policymakers no longer have the luxury of standing still. Navigating this new reality will require agility and a clear-eyed recognition that the era of stable, rules-based trade is over — for now.”
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Dr Ramkishen S. Rajan, Yong Pung How Professor
“Some countries in Asia have come into the crosshairs of the US Administration not because they have high tariffs on American products, but because they have a large trade surplus with the United States. This is a normal phenomenon, especially for poor countries. Poorer economies can sell products that are not expensive to the US, but do not have enough money to buy American products that are too expensive for them. That is why we saw countries like Cambodia, Laos and Myanmar receiving among the highest tariffs in the region. It is the result of the way the Trump Administration calculated the tariffs (a formula that considers a country’s trade deficit with the US, divided by its exports, and then either halved or capped at 10%, whichever is higher). The result is that countries that have been good at producing low-cost products that the United States is interested in are now punished more. This will have major economic consequences for those countries at the lower end of economic development.
In general, the tariffs will raise the cost of ASEAN exports into the US, likely reducing demand across the region. Different countries will react based on their exposure — for instance, Vietnam quickly agreed to lower tariffs on US goods, while others may strengthen intra-Asia trade links. Although it’s too early to judge capital flows, Singapore, with its strong ASEAN trade agreements and regional HQ appeal, is likely to emerge as one of the least affected and relatively more attractive destinations.”
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Dr Francesco Mancini, Vice Dean (Executive Education) and Associate Professor in Practice
On tariff diffentials among countries
"Recent geopolitical shifts, particularly Trump’s “Liberation Tariffs”, have created substantial disruptions in global semiconductor supply chains. These tariffs significantly raised duties on Chinese semiconductor imports to 60%, while setting lower rates — approximately 20% or less — for products originating from ASEAN countries, including the Philippines. Initially, this difference suggests a promising 17% tariff advantage for the Philippines. Yet, this apparent advantage alone will not meaningfully attract semiconductor investments unless other fundamental challenges impeding foreign direct investments (FDIs) are swiftly addressed.
Despite the initial tariff edge, the Philippines faces intense competition from neighbouring countries like Vietnam and Malaysia. Vietnam has already leveraged a strategic bilateral agreement with the United States to reduce its trade deficit, enhancing its competitiveness significantly. Similarly, Malaysia remains highly proactive, continuously refining its attractive incentives, advanced infrastructure, and government-backed industry support. Consequently, semiconductor companies entrenched in these nations are unlikely to relocate to the Philippines solely because of marginally lower tariffs if the Philippines fails to resolve its structural and economic impediments.
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Ultimately, while the Philippines stands to gain theoretically from the favourable tariff differential, tangible benefits will remain elusive unless substantial action is taken to address these deeper systemic and structural challenges. The Philippines should seize this fleeting advantage into a lasting competitive edge in the global semiconductor industry."
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Dr Eduardo Araral Jr, Associate Professor
On the impact of the global tariffs to Singapore GE and citizens
“Given the PAP had experienced a decline in vote share during GE2020 despite the uncertainty from Covid-19, it is increasingly hard to anticipate whether there will be a flight to safety. Rather, voters will more likely be focused on domestic bread-and-butter issues such as cost of living, jobs and affordable housing.
This is not to say that geopolitics or geo-economics do not have any bearing at all. Geopolitical instability can give rise to a sense of unease among voters and colour their perceptions of domestic economic challenges, even if it may not directly influence their decisions. These dynamics are not uncommon across different polities, where voters tend to focus on domestic concerns but may unconsciously be affected by broader geopolitical issues.
PM Wong's speech helps citizens to make important connections between what is happening in the world and how these events impact our day-to-day lives. The speech also helps prepare citizens for the eventual impacts that the tariffs will have on jobs and costs of living, as well as assure them of the government's intention to address these impacts. Given the significant impact that the tariffs will have on our economy, it is unfair to think of it as 'fearmongering'. The messaging from both PM Wong and Mr Pritam Singh would have been just as important even if it were not an election year.”
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Dr Woo Jun Jie, Senior Lecturer