ASEAN tilts toward China and Gulf states as Trump tariffs bite
First trilateral summit to launch task force on trade, investment
KUALA LUMPUR -- Southeast Asia will seek to strengthen trade ties with China and the Gulf states in a landmark trilateral summit on Tuesday in Kuala Lumpur, aimed at enhancing economic cooperation in response to sweeping U.S. tariffs imposed by President Donald Trump.
Leaders from ASEAN, China and the Gulf Cooperation Council are expected to agree to form a joint working group to foster closer economic collaboration, according to a draft statement seen by Nikkei Asia. The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
The draft statement commits the parties to "enhanced trade and investment" by prioritizing large-scale infrastructure, logistics and supply chain development -- areas closely aligned with China's Belt and Road Initiative. The three will also collaborate to develop joint research and initiatives on advanced nuclear reactors, low-carbon technologies and renewable energy.
China is represented by Premier Li Qiang while the GCC states have sent crown princes, senior ministers and other officials.
In his opening remarks at the ASEAN-GCC-China summit, Malaysian Prime Minister Anwar Ibrahim, the meeting's host, described the ties among the three as "deep and enduring," rooted in a long shared history.
"From the ancient Silk Road to the vibrant maritime networks of Southeast Asia to modern trade corridors, our peoples have long connected through commerce, culture and the sharing of ideas," Anwar said. He added that the relationships reflect both "immense existing linkages as well as substantial untapped potential."
Li echoed Anwar's remarks, emphasizing the deep historical ties that underpin Beijing's current Belt and Road Initiative. Amid an "increasingly complex international environment and a sluggish global economy," he said, the summit offers a chance to "jointly create a model of global cooperation and development for this era."
Analysts say U.S. protectionism is reshaping global trade ties, accelerating China's pivot to Southeast Asia and prompting ASEAN to double down on alternative partners.
Ilango Karuppannan, a former Malaysian diplomat and foreign policy analyst, said the inaugural summit reflects a broader global realignment. While the U.S. still leads in financial flows and institutional clout, its dominance is gradually waning, he said.
"China's trade footprint continues to expand, and the GCC -- armed with sovereign wealth and strategic energy exports -- is building lasting economic linkages in Asia," Ilango told Nikkei Asia. He added that while ASEAN seeks U.S. investment, it must also remain open and agile within global supply chains.
"The real challenge lies in managing this balance without being forced into binary alignments," he said.
After holding its first summit with the GCC in 2023, ASEAN has welcomed its largest trading partner, China, to join discussions for the first time, in a sign of ASEAN's growing desire to broaden its trade ties beyond those with the U.S.
The sense of urgency has only grown since Trump's tariff rollout in April, which targeted regional economies. Cambodia was hit hardest with a 49% import duty, followed by Laos at 48% and Vietnam at 46%. While the bloc benefited from supply chain shifts out of China during Trump's first term, they became vulnerable as their trade burgeoning surpluses with the U.S. put them in Trump's tariff crosshairs.
In response, export-reliant ASEAN economies are looking to hedge against the U.S., leaning on China's established trade channels and the deep pockets of Gulf nations, which share longstanding ties with Muslim-majority members like Malaysia, Indonesia and Brunei.
ASEAN's trade with China and the GCC has been growing steadily. In 2024, the combined volume exceeded $900 billion, nearly double the $453 billion in ASEAN-U.S. trade, according to ASEANstats data. Since the start of Trump's first term in 2017, the bloc's trade with China and the GCC has grown by $375 billion, outpacing the $220 billion rise in trade with the U.S.
Combined, ASEAN, China and the GCC represent more than 20% of the world's gross domestic product and a market with a 2.15 billion-strong population. Tricia Yeoh, associate professor at the University of Nottingham Malaysia, said the GCC's size and spending potential are turning it into a promising trade partner for ASEAN.
China has wasted no time strengthening its foothold. In April, President Xi Jinping visited Malaysia, Vietnam and Cambodia, sealing new trade agreements. On Sunday, Li also met with Indonesian President Prabowo Subianto in Jakarta, underlining Beijing's regional push.
Earlier on Tuesday, Prabowo and other regional leaders proposed a new trade agreement between ASEAN and the GCC, according to diplomatic sources.
Additional reporting by Ng Chun Kiat.