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As Donald Trump entered his second presidential term, trade relations between the United States and Southeast Asia became increasingly unpredictable. U.S. trade policy now prioritizes short-term transactions and political calculations over a commitment to stability. Although ASEAN has gained short-term benefits from the relocation of supply chains amid U.S.–China tensions, these gains are offset by tariff measures, trade defense actions, and the absence of the United States from regional free trade agreements (FTAs).

Southeast Asia remains one of the most trade-open regions globally. Its young labor force, rapid urbanization, and emergence as a technology hub make it highly attractive to foreign investors. [1] However, the region relies heavily on foreign direct investment (FDI) within global supply chains, particularly in the electronics, machinery, textiles, and consumer goods sectors. Because the United States is a critical final consumption market, any shift in its trade approach produces clear ripple effects across these export-dependent economies.

The primary danger is that, under Trump, trade is no longer treated as a long-term framework built on stable linkages. Instead, it is viewed as a series of transactions that can be adjusted suddenly to serve short-term political interests. Following policy uncertainty from the White House, rapid changes in global trade policy since the late 2010s have slowed trade growth. Export-dependent economies have been heavily affected by rising geopolitical tensions, expanding government intervention in economic activity, and intensifying international competition for natural resources. [2]

Consequently, Southeast Asian businesses struggle to build stable planning scenarios. Statements regarding universal tariffs, reviews of trade preferences, and the prioritization of “Made in America” production have transformed trade from a foundation for prosperity into a source of anxiety. Indeed, economists argue that the Trump administration has disrupted U.S. trade policy more than any previous administration. Fluctuations in tariff policy under Trump have shaken financial markets, increased recession risks, and unsettled regional allies. [3] Moreover, this policy shift has eroded confidence that existing trade rules will remain in place even in the medium term, as the administration retains the power to adjust policies at will.

Conditional Gains, Prolonged Risks

While a familiar argument suggests that Southeast Asia has “benefited” from U.S.–China trade tensions, this narrative is only partially true when analyzing statistical data. It is accurate that the sharp rise in Southeast Asian exports to the United States since 2017 coincided with declining Chinese exports to the U.S. market. [4] Consequently, Southeast Asian economies currently enjoy lower tariff rates for U.S. exports compared with China.

However, this dynamic is shifting. As the trade surplus of ASEAN with the United States has grown, the Trump administration has sought to curb perceived “imbalances” through reciprocal tariffs. Since August 2025, tariff rates applied to ASEAN member states have ranged from 10% to 40% . [5] Because export volumes surged before these tariffs took effect and subsequently began to decline, the likelihood of sustained, strong export growth from ASEAN to the United States appears limited.

Furthermore, ASEAN countries face a significant rise in trade defense measures and origin investigations. Notably, the U.S. Department of Commerce announced preliminary anti-dumping measures against solar energy products from Việt Nam, Cambodia, Malaysia, and Thailand. Washington has grown increasingly suspicious of tariff circumvention linked to Southeast Asian nations across various industries. [6]

Therefore, short-term gains from supply chain relocations do not guarantee long-term stability. Relocations driven by policy uncertainty often result in supply chains that are more fragmented, costly, and vulnerable to economic shocks. Because many regional economies are positioned in intermediate segments of global value chains—characterized by thin profit margins and limited risk-absorption capacity—they are particularly vulnerable to political and policy fluctuations originating in the United States.

During Trump’s second term, the continued absence of the United States from next-generation trade agreements has left the trade environment with Washington less institutionalized than other frameworks involving ASEAN. Research by the Center for Strategic and International Studies (CSIS) indicates that this absence from regional FTAs makes Washington’s economic influence in Asia more “informal,” as it relies heavily on bilateral leverage rather than shared rules. [7]

This lack of formal structure also deepens the impact on the economic relationship between ASEAN and China. The Trump administration has repeatedly warned ASEAN of potential punitive tariffs of up to 40% on products deemed to be tariff-circumvention exports, despite a lack of clarity regarding the definition of “circumvention.” [8] Meanwhile, Chinese goods are accumulating within ASEAN markets, which places severe pressure on local firms and increases the risk of factory closures and worker layoffs. [9]

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ASEAN’s pragmatic economic diplomacy seeks to balance interests between the United States and China to maximize economic benefits. However, this approach carries significant risks. While a new trade crisis between the United States and Southeast Asia has not yet materialized, regional trade and investment relations with Washington are operating under highly challenging and uncertain conditions. The future will severely test the resilience of Southeast Asian economies and their ability to anticipate rapid policy shifts.

Thái Hà wrote this article in Vietnamese and published it in Luật Khoa Magazine on Feb. 10, 2026. Đàm Vĩnh Hằng translated it into English for The Vietnamese Magazine.

References: +

Lim, K. (2026, January 8). Why investors are looking to Southeast Asia’s economies amid global tensions. South China Morning Post . https://www.scmp.com/week-asia/economics/article/3339114/why-investors-are-looking-southeast-asias-economies-amid-global-tensions

OECD. (2025, September 11). Economic Security in a Changing World. https://www.oecd.org/en/publications/2025/09/economic-security-in-a-changing-world_78f3b129/full-report/economic-security-and-vulnerabilities-in-international-supply-chains_dc88aefa.html

Hoover. (2025, April 23). Trade Policy Rupture . https://www.hoover.org/research/trade-policy-rupture

Lim, L. (2025, December 31). Asean has benefited from US-China trade war, but it is stuck in a complicated spot. The Business Times . https://www.businesstimes.com.sg/international/asean/asean-has-benefited-us-china-trade-war-it-stuck-complicated-spot

Takahashi, T. (2026, February 1). Trump’s economic weaponization hurts ASEAN as free trade hub. Nikkei Asia . https://asia.nikkei.com/spotlight/comment/trump-s-economic-weaponization-hurts-asean-as-free-trade-hub

Bo-yu, L. (2025, April 22). U.S. to imposes record-high tariffs on solar imports from Southeast Asia. Recessary . https://www.reccessary.com/en/news/us-to-imposes-record-high-tariffs-on-solar-imports-from-southeast-asia

CSIS. (2025, October 6). Southeast Asia Navigates Trump’s Return: Quick Deals, Lasting Dread. https://www.csis.org/analysis/southeast-asia-navigates-trumps-return-quick-deals-lasting-dread