Southeast Asia Could Snag Better Trade Terms, Claims Rubio

Amid tariff threats, the U.S. seeks to reassure ASEAN nations of its commitment.

Despite facing potentially stiff tariffs, the U.S. is trying to reassure Southeast Asian countries of its dedication to the region. Marco Rubio suggested these nations might secure “better” trade agreements than others.

U.S. Reassurance Amid Trade Tensions

During his first official visit to Asia, Rubio met with foreign ministers from the Association of Southeast Asian Nations (ASEAN) in Malaysia, asserting that the U.S. has “no intention of abandoning” the area.

This visit occurred shortly after President Donald Trump threatened to impose significant tariffs on several Southeast Asian countries if deals were not reached by August 1.

The region, heavily reliant on exports and manufacturing, has been significantly impacted by trade disputes. Countries including Thailand, Malaysia, Laos, Myanmar, Cambodia, the Philippines, and Indonesia received warnings about tariffs ranging from 20% to 40%, which Rubio stated were under discussion with ASEAN members.

Rubio added, “I would say that when all is said and done, many of the countries in Southeast Asia are going to have tariff rates that are actually better than countries in other parts of the world.”

Regional Concerns

Prior to Rubio’s arrival, Malaysian Prime Minister Anwar Ibrahim criticized the tariffs, describing the trade war as “the new weather of our time,” not just a temporary issue.

He noted that tools previously used for growth were now being “wielded to pressure, isolate and contain.” The impending tariffs have overshadowed Rubio’s visit, even as he emphasized the region’s importance to the U.S.

“It is our view, our strong view, and the reality that this century and the next, the story of the next 50 years, will largely be written here in this region, in this part of the world,” Rubio commented.

According to the World Bank, trade makes up a significant portion of Southeast Asia’s GDP, with some countries exceeding 100% (World Bank Data 2024).

Expert Skepticism

Stephen Olson from the ISEAS – Yusof Ishak Institute, stated that Rubio faced “the unenviable position of trying to reassure southeast Asian partners that [the] US continues to be committed to the region and to free and open trade relations when all the evidence points in the opposite direction.”

Olson added that ASEAN ministers would likely offer a polite reception but remain unconvinced by Rubio’s statements. Doubts about the U.S.’s dedication, combined with Trump’s unpredictable economic policies, could benefit China.

China’s Counter-Narrative

At the same meeting, China and ASEAN, China’s largest trading partner, finalized negotiations to expand their free trade area. Chinese Foreign Minister Wang Yi subtly contrasted Washington and Beijing, portraying China as a dependable partner focused on mutual growth.

Without directly naming the U.S., he criticized Trump’s tariffs, highlighting “unilateral protectionism and the abuse of tariffs by a certain major country.”

Additionally, Japanese Prime Minister Shigeru Ishiba suggested Japan needed to reduce its reliance on the U.S. in key sectors. Ishiba stated, “If they think Japan ought to follow what America says as we depend heavily on them, then we need to work to become more self-sufficient in security, energy and food, and less dependent on America.”

Nuances in U.S. Trade Deals

Vietnam is the only Asian nation with a U.S. trade deal. While many goods face a 20% tariff, a 40% levy remains on transshipments, targeting Chinese companies rerouting products through Vietnam to avoid tariffs.

Analysts view Trump’s agreement with Vietnam as a strategy to pressure countries to exclude China from their supply chains. Southeast Asian countries have been rushing to offer concessions to avert tariffs, which could severely impact economic growth.

Tariffs loom over eight ASEAN nations, including a 20% tariff on the Philippines, 25% on Malaysia and Brunei, 32% on Indonesia, and 36% on Cambodia and Thailand. Laos and Myanmar continue to face the highest tariffs, at 40%.

In Thailand, if the government cannot avoid the 36% rate, GDP growth is projected to fall below 1% this year, according to the Eurasia Group. Bangkok has pledged to decrease its $46 billion trade surplus with the U.S. by 70% within five years and eliminate the imbalance within eight years.

Indonesian officials also expressed shock at the letters from the U.S., despite a recent commitment to increase imports from the U.S. by $34 billion.