[KUALA LUMPUR] Top economic officials from South-east Asia are set to convene virtually on Thursday (Apr 10) for high-stakes talks as Washington’s punitive tariffs rattle the region’s export-driven economies, though doubts linger over whether the session can shift the tide or bring meaningful change.
“Tariffs are not coming down,” said Taimur Baig, managing director and chief economist at DBS Group at a webinar on Tuesday. “The US wants jobs back onshore. Even if countries reduce tariffs to zero, the US may not change its stance.”
The closely watched session, convened by Malaysia as this year’s Asean chair, comes amid mounting unease across the region as Washington rolls out fresh duties –ranging from 10 to 49 per cent – on a broad swathe of exports, threatening to derail the bloc’s trade-driven recovery.
“Without a common approach, the US could play Asean members off against each other, undermining both our bargaining power and our unity,” said Dr Lee Pei May, assistant professor at the International Islamic University Malaysia.
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“The only way to increase a small country’s leverage in a negotiation is to act as a bloc,” she told The Business Times.
She added that Malaysia’s chairmanship will be a key test of its diplomatic agility. “We need to see Malaysia’s creative diplomacy in action to bring Asean members together.”
Bank Muamalat’s chief economist Mohd Afzanizam Abdul Rashid noted that while Asean member states are free to negotiate individually, a unified approach leveraging the bloc’s collective economic weight could yield more favourable outcomes.
Prior to Thursday’s meeting, several countries have begun individual negotiations with the US.
Malaysia has sent senior officials to Washington for talks, while Vietnam has proposed to eliminate tariffs on American imports entirely to ease tensions and requested a postponement of the 46 per cent reciprocal tariff imposed by the US.
Indonesia has suggested increasing imports of US goods such as wheat, cotton, and oil and gas to strengthen trade ties.
Diplomacy over retaliation
Reflecting Asean’s established commitment to dialogue and neutrality, observers anticipate that member states will avoid retaliatory measures against Washington, particularly in light of escalating tensions with China.
Washington on Tuesday announced that a 104 per cent tariff will be imposed on Chinese goods, from Apr 9. This follows Beijing’s response with a 34 per cent levy on American imports, which itself was a reaction to an earlier 54 per cent US tariff.
Centre for Market Education chief Carmelo Ferlito said there is broad consensus within Asean that negotiation, not retaliation, is the preferred path forward.
He suggested that the US may have intended from the outset to renegotiate bilateral trade agreements in its favour.
“Last week’s turmoil might have been a strategic move to compel other countries back to the negotiation table, aiming to reestablish an international trade framework dominated by the US rather than China,” he told BT.
Analysts are unsure if the negotiations will bear fruit and provide the region a much-needed reprieve, especially given Washington’s hard stance.
For instance, despite Vietnam proposing zero tariffs on US imports and agreeing to increase purchases, White House trade adviser Peter Navarro said this offer was inadequate due to concerns about non-tariff barriers.
Vietnam, which exports US$119.5 billion worth of goods to the US, has requested a postponement of the US reciprocal tariff on its goods by at least 45 days to facilitate negotiation and preparation for a “status transition”.
The challenge, Baig noted, is compounded by the US administration’s hardening stance on trade, particularly with China.
Strength in unity
Malaysia is spearheading efforts to rally Asean around a common strategy that balances national interests with collective strength.
Options on the table include coordinated statements, alignment on trade rules, and stronger regional mechanisms to absorb external shocks.
Thursday’s meeting is also expected to spark renewed urgency for Asean to deepen intra-regional trade ties.
Despite representing a combined market of over 660 million people, intra-Asean trade accounts for less than 25 per cent of the bloc’s total trade volume.
In a speech at a conference on Tuesday, Malaysia’s Prime Minister Anwar Ibrahim said his government will prioritise the revitalisation of the Asean Plus Three platform – comprising China, Japan and South Korea – as a buffer against global protectionism and supply chain fragmentation.
“We must move beyond rhetoric to execution. Tariff liberalisation within the (Asean) region is largely complete, but regulatory alignment, cross-border logistics, and digital connectivity remain unfinished business,” he said.
He pointed to the Johor–Singapore Special Economic Zone as an example of cross-border cooperation. “It’s not a silver bullet, but it demonstrates what’s possible when two closely linked economies work together.”
He also highlighted plans to develop Malaysia’s other border areas, including regions adjoining southern Thailand and Indonesia’s Kalimantan, to spur economic activity and improve livelihoods on both sides.
Other regional projects, such as the Asean power grid and Asean payment connectivity, will further strengthen intra-Asean trade.
Test of resilience
Analysts say the outcome of Thursday’s meeting could serve as a barometer of Asean’s institutional maturity and its ability to adapt to a more fragmented global economy.
“Our region has faced significant challenges and endured extreme volatility in the past, yet we have consistently emerged stronger,” said Bank Negara assistant governor Madelena Mohamed at an event on Tuesday.
She highlighted that the recent tariffs have exposed vulnerabilities stemming from over-reliance on specific markets or sectors.
“For Asean countries, this presents an opportunity to reevaluate trade strategies and strengthen economic cooperation within the region,” she said.
