ASEAN countries struggle to resolve Trump's 'divide and conquer' tariffs
Vietnam, Malaysia, Indonesia on U.S. priority talks list but no firm deals yet
SINGAPORE -- Southeast Asian countries are set for limited breakthroughs on tariff reliefs from Washington, analysts say, as U.S. President Donald Trump keeps trade partners guessing over his next move, while they struggle to appease the world's biggest economy.
Individual members of ASEAN rushed to have direct negotiations with the U.S. through May, but have so far been left stumped as to the outcome of bilateral efforts to gain relief from Trump's sweeping tariffs, which were announced in April, before a 90-day pause in the levies beyond 10% expires in July.
"The U.S. is choosing a 'divide and conquer' approach," Chua Hak Bin, an analyst at Malaysia's Malayan Banking, told Nikkei Asia. "Each ASEAN country faces a different reciprocal tariff rate and set of U.S. complaints, making it difficult to negotiate on a collective basis."
Malaysian Prime Minister Anwar Ibrahim told a gathering of ASEAN leaders in Kuala Lumpur on Monday that he had written to Trump proposing a U.S.-ASEAN summit to alleviate the fallout from the tariffs.
Despite talks for a united ASEAN response against the U.S. trade war, however, member states have largely sidestepped leveraging the bloc to press the Trump administration. They have only agreed on a non-retaliatory approach and are chasing their own bilateral talks with Washington to secure concessions.
The U.S. has reportedly prioritized negotiations with 20 nations including Southeast Asian countries like Vietnam, Malaysia and Indonesia, Maybank noted in a mid-May report. It highlights the absence of Thailand and the Philippines from the priority list.
Among ASEAN countries, Cambodia is facing the highest U.S. "reciprocal" tariff rate at 49% and Singapore the lowest at 10%.
"Among ASEAN economies, Vietnam, Malaysia and Indonesia appear to be in more advanced stages of trade talks with the U.S.," Maybank said. "Vietnam is likely the most keen to seek a deal during the 90-day pause before July, as it otherwise faces hefty reciprocal tariffs."
Vietnam, which is facing 46% tariffs, last week sent a delegation to Washington led by Trade Minister Nguyen Hong Dien for a second round of negotiations.
Vietnam is pushing to buy more American goods, including Boeing planes and crude oil from ExxonMobil. It is discussing joint nuclear power development with U.S.-based Westinghouse Electric, and recently sent more than 100 Vietnamese companies to attend SelectUSA, a forum for companies looking to invest in the U.S.
Vietnam is also cracking down on Chinese transhipments in its territory. And just last Wednesday, it hosted a groundbreaking ceremony for a $1.5 billion golf resort and luxury residential project by The Trump Organization attended by Trump's son, Eric.
Despite this, Hanoi has not struck any deal with Washington so far.
Malaysia, which is facing a 24% tariff rate, is preparing a second round of negotiations with the U.S. this week, after no deal was reached in previous meetings between Malaysian and U.S. officials in Washington and on the sidelines of the Asia-Pacific Economic Cooperation (APEC) forum in South Korea.
Malaysian officials said the government is open to negotiating measures to reduce the U.S. trade deficit, remove non-tariff barriers and strengthen technological safeguards -- the latter in the wake of an allegation of the diversion of U.S.-origin Nvidia AI chips to China via Malaysia.
"Currently, negotiations with the U.S. are progressing well, and we are hopeful that the outcome will be positive for Malaysia," Zafrul Aziz, Malaysia's investment, trade and industry minister, said on his LinkedIn page without elaborating.
Indonesia has set itself a deadline of 60 days to reach an agreement with Washington. Facing a 32% rate, the region's largest economy is trying to appease Trump by proposing to import more liquefied petroleum gas, crude oil, soybeans and wheat from the U.S.
Energy Minister Bahlil Lahadalia in April said Indonesia might increase energy imports from the U.S. by $10 billion. Earlier this month, he said a large chunk of that would come from shifting fuel imports from Singapore to the U.S. The majority of Indonesia's fuel imports currently come from Singapore, which refines crude oil sourced from elsewhere.
Thailand is leaning towards using a similar playbook. Thai state oil and gas conglomerate PTT said last week it was considering importing more liquefied gas from America as part of tariff negotiations.
The Thai government has otherwise been widely criticized by the public and opposition parties for its slow response to the tariff ordeal. Despite facing a 36% reciprocal tariff rate, Bangkok has not booked any schedule for negotiations with Washington.
Philippine officials met with American trade counterparts in early May, aiming to secure a zero-tariff rate for Filipino goods entering the U.S. -- albeit facing a relatively lower rate at 17%.
"We are hopeful that these discussions mark the beginning of a process toward arrangements from both sides that will not only strengthen US-Philippines trade ties but also help diversify our country's export markets," Frederick Go, special assistant to the president for investment and economic affairs, said in a statement.
Even Singapore, with the lowest regional rate, is pushing for concessions in areas such as pharmaceutical exports to America.
With no firm breaks secured, however, Southeast Asian countries are hanging on to hope that the U.S. will concede on some front.
"ASEAN has so far not been able to exercise its collective bargaining power in talks with the U.S.," Darren Tay, head of Asia-Pacific country risk at macroeconomic analysis agency BMI, told Nikkei. "We are convinced that there are no winners in this global trade conflict."
Reporting by Mai Nguyen in Hanoi, Norman Goh in Kuala Lumpur, Nana Shibata and Rezha Hadyan in Jakarta, Ramon Royandoyan in Manila and Apornrath Phoonphongphiphat in Bangkok.