The extensive new tariff policy implemented by the United States is delivering a significant blow to ASEAN economies, which have long relied on exports to drive their growth. With the US and China making up almost one-third of ASEAN's total merchandise exports in 2023, the region's vulnerability has become starkly apparent. Tariff rates as steep as 49% on products from nations such as Cambodia and Vietnam are jeopardizing critical sectors, ranging from textiles to electronics.

In addition to the economic challenges, these tariffs are also altering the geopolitical landscape in the region. The Trump administration’s strategy—which concentrated on trade deficits and the issue of Chinese trans-shipment—has estranged essential partners and neglected the need for bilateral engagement or consideration of non-tariff barriers. Efforts by Vietnam and Japan to mitigate punitive actions by lowering tariffs or boosting imports from the US have yielded minimal results. In response, ASEAN countries are rapidly accelerating their diversification strategies, establishing stronger trade connections with Europe, the Gulf, and even BRICS nations.

As the US risks becoming uncompetitive within Asian supply chains and may nudge regional allies towards China and other partners, the long-term consequences could be more political than economic. Experts suggest that a broad tariff approach erodes trust and endangers Washington’s leadership in the Indo-Pacific. Transitioning to a partnership-based trade model is essential for maintaining American influence in a region that is pivotal to global power dynamics.