ASEAN Amid Trump 2.0

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The return of Donald Trump as the President of the United States for a second term, or “Trump 2.0,” cannot be entirely regarded as an unpredictable event. In fact, his administration has demonstrated a degree of predictability based on the policies and approaches observed during both Trump 1.0 and Trump 2.0. These consist of four key aspects:

1. America First Policy – Trump continues to prioritize American interests, particularly through protectionist trade policies. These include imposing tariffs to safeguard domestic industries, ensuring a secure supply chain, and using trade policies as a national security tool. Additionally, his administration maintains an isolationist and nationalist stance by withdrawing from international agreements and reducing foreign aid.
2. Bilateral Negotiations Over Multilateralism – The Trump administration prefers bilateral negotiations over multilateral agreements, viewing them as more efficient and effective. This approach aligns with the “America First” doctrine, as it enables the U.S. to exert greater control over trade conditions.
3. Opposition to Climate Change Policies – Trump 2.0 does not support climate change mitigation efforts, instead prioritizing the fossil fuel industry. The administration has withdrawn the U.S. from the Paris Agreement for a second time, promoted oil and natural gas production, facilitated offshore drilling projects, increased liquefied natural gas exports, and discontinued government subsidies for renewable energy initiatives.
4. Business-Oriented Governance – Unlike conventional political or strategic governance, Trump operates with a business mindset. His negotiation style is unconventional and often unpredictable, resembling business deal-making rather than diplomatic protocols. He favors bilateral negotiations that focus on short-term advantages, frequently employing aggressive bargaining tactics such as setting high initial demands to create leverage in negotiations.

While these four aspects of Trump 2.0 can be anticipated, the world must still prepare for the unpredictable challenges that may emerge. The global economy is already experiencing a second trade war, with the U.S. and its trading partners imposing retaliatory tariffs. This uncertainty will likely intensify following the implementation of U.S. reciprocal tariff measures on April 2, 2025.

ASEAN economies are highly dependent on international trade. More than half of ASEAN member states rank among the top 20 countries with which the U.S. has the highest trade deficits, including Vietnam, Thailand, Malaysia, Indonesia, and the Philippines. This exposes ASEAN to significant risks from Trump 2.0, with both potential benefits and drawbacks.

Potential Positive Impacts

• Multinational corporations may relocate production from China and other countries to ASEAN due to lower labor costs, improved infrastructure, and the region’s capacity for labor-intensive manufacturing.
• The U.S. dollar is likely to strengthen under Trump 2.0, making ASEAN exports more competitively priced compared to U.S. goods in global markets.

Potential Negative Impacts

• Higher U.S. tariffs on Chinese imports may lead to an influx of Chinese goods into ASEAN markets, intensifying competition for local producers.
• Policy uncertainty in the U.S. could discourage investors from committing to ASEAN, disrupting supply chains and slowing regional economic growth.

To mitigate the risks and capitalize on opportunities, ASEAN can adopt three key strategies:

1. Proactive Engagement with the U.S. – ASEAN should engage in negotiations to seek mutually beneficial trade agreements with the U.S. while safeguarding national interests to counter potential tariff increases.
2. Diversification of Export Markets – ASEAN countries should reduce dependence on any single market, particularly the U.S. and China, by expanding trade partnerships with alternative markets.
3. Strengthening Regional Economic Cooperation – ASEAN should enhance intra-regional trade to minimize external vulnerabilities. This can be achieved by reducing trade barriers within the bloc, harmonizing trade standards, and improving the effectiveness of regional trade agreements. Such efforts will enhance economic stability and reduce reliance on external markets.

Changes in global and regional trade dynamics—whether driven by Trump 2.0, evolving environmental regulations, or rapid technological advancements—will depend on how ASEAN adapts and responds. If ASEAN can consolidate its economic strength and foster cooperation, the region can turn crises into opportunities and establish a more resilient trade and investment landscape.

Author:
Ms. Warunya Yossai
Senior Researcher
International Institute for Trade and Development (Public Organization)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 38 Issue: 12856
Date: Wednesday, Mar. 12, 2025
Page: 8 (left)
Column: “Asean Insight”