The second Trump administration has ushered in a new phase of Sino-American competition in Southeast Asia, characterized by intensified economic warfare, shifting alliance dynamics, and evolving regional responses. This analysis examines how Trump's return to power has reshaped the strategic landscape in one of the world's most contested regions, where both superpowers vie for influence over critical trade routes, emerging markets, and strategic partnerships.
The Southeast Asian political and economic environment has undergone significant transformation since Trump's first presidency. Key regional leaders have changed, with Indonesia's Prabowo Subianto, Malaysia's Anwar Ibrahim, and the Philippines' Ferdinand Marcos Jr. adopting more activist foreign policies compared to their predecessors. This leadership transition has created both opportunities and challenges for both the United States and China as they compete for regional influence.
The region's strategic importance has only grown, serving as a critical nexus for global supply chains, maritime trade routes, and technological innovation. With ASEAN representing one of the world's fastest-growing economic blocs, both superpowers recognize that influence in Southeast Asia directly correlates with their broader Indo-Pacific strategies.
The second Trump administration has implemented an aggressive tariff policy that significantly impacts Southeast Asia. The administration has imposed substantial tariffs on regional partners, including a 49 percent tariff on Cambodian goods—the highest rate in Southeast Asia. These tariffs, announced as part of "Liberation Day" measures in April 2025, represent a dramatic escalation from previous trade policies.
The broader tariff strategy includes a 54 percent tariff on Chinese goods, creating both opportunities and challenges for Southeast Asian nations. While some countries may benefit from trade diversion as businesses seek alternatives to China, the global nature of these tariffs creates uncertainty and potential economic disruption throughout the region.
The Trump administration has emphasized military modernization and alliance burden-sharing in the Indo-Pacific, focusing on reasserting American strength in the region. This approach includes expanding military exercises and deepening security partnerships with key allies. The United States maintains a significant advantage in security cooperation, outpacing China nearly four-to-one in metrics such as the number of military exercises, many of which are more complex in nature than Chinese counterparts.
However, the administration's transactional approach to alliances has created tensions with some traditional partners, potentially undermining long-term strategic coherence in countering Chinese influence.
China has adapted its Belt and Road Initiative (BRI) approach in Southeast Asia, pivoting toward smaller, more environmentally focused projects while maintaining its emphasis on infrastructure connectivity. The BRI remains a cornerstone of China's regional strategy, with ASEAN countries serving as core regions for promoting Belt and Road construction.
Recent developments include major infrastructure projects such as the China-Laos railway, which cost approximately $6 billion and was built by Chinese state-owned contractors bearing 70 percent of construction costs. This 1,000-kilometer railway connecting Kunming to Vientiane exemplifies China's continued commitment to physical connectivity as a means of economic and political influence.
Beyond bilateral relationships, China is expanding its multilateral engagement in Southeast Asia through both its ASEAN partnership role and the expanded BRICS grouping. Indonesia formally joined BRICS in early 2025, while Malaysia, Thailand, and Vietnam are classified as prospective members. This multilateral expansion provides China with alternative forums for engaging regional partners outside traditional Western-dominated institutions.
China maintains its position as Southeast Asia's largest trading partner since 2009, holding an almost two-to-one advantage over the United States in trade volume. This economic relationship provides China with significant leverage in regional affairs, even as the United States maintains a narrowing edge in foreign direct investment, which tends to be more private sector-led.
Southeast Asian nations continue their traditional approach of strategic hedging, seeking to maximize benefits from both superpowers while avoiding exclusive alignment with either. ASEAN countries are increasingly adept at navigating and leveraging major power competition for their own interests, as evidenced by their measured responses to both American tariff policies and Chinese investment initiatives.
Malaysia's Prime Minister Anwar Ibrahim, holding ASEAN's rotating chair, has emphasized the bloc's intention to reach out to the Trump administration for collective negotiations while simultaneously looking to diversify trade relationships. This approach reflects the region's preference for maintaining strategic autonomy rather than choosing sides in the Sino-American competition.
Cambodia: The high tariffs imposed by the Trump administration risk pushing Cambodia closer to China, particularly given Xi Jinping's state visit and China's continued investment in Cambodian infrastructure and development projects.
Vietnam: Despite being more economically reliant on the United States than many regional neighbors, Vietnam faces pressure from American tariff policies while simultaneously managing its complex relationship with China.
Philippines: Under Ferdinand Marcos Jr., the Philippines has maintained its traditional alliance with the United States while seeking to balance relations with China, particularly regarding territorial disputes in the South China Sea.
Indonesia: As the largest ASEAN economy and newest BRICS member, Indonesia represents a key battleground for influence, with both powers competing for partnership in critical sectors including technology, energy, and infrastructure.
The economic competition between the United States and China in Southeast Asia operates across multiple dimensions. While China dominates in trade volume, the United States maintains advantages in certain sectors, particularly high-technology investments and services. The Trump administration's tariff policies, however, risk undermining American economic competitiveness by making U.S. goods more expensive and potentially driving regional partners toward alternative arrangements.
The global nature of the current trade war creates complications for Southeast Asian nations that must navigate supply chain disruptions and market access challenges. Unlike the more targeted approach of the first Trump administration, the current tariff regime affects multiple countries simultaneously, reducing the region's ability to benefit from trade diversion.
Competition in the technology sector remains particularly intense, with both powers seeking to establish technological standards and digital infrastructure partnerships. China's advantages in telecommunications infrastructure and digital payment systems compete with American strengths in software, semiconductors, and advanced manufacturing technologies.
The South China Sea remains a critical arena for Sino-American competition, with the Trump administration maintaining freedom of navigation operations while China continues to assert territorial claims and expand its military presence. Regional countries with overlapping claims—including Vietnam, Malaysia, and the Philippines—must carefully balance their positions to avoid being drawn into direct confrontation.
Both powers compete in providing military equipment and training to regional partners. The United States maintains traditional advantages in advanced military technology and professional military education, while China offers more affordable alternatives and fewer political conditions on arms sales.
Challenges:
Tariff policies risk alienating regional partners and pushing them toward China
Transactional approach to alliances may undermine long-term strategic relationships
Economic nationalism conflicts with regional preferences for open trade
Opportunities:
Private sector investment advantages in key technological sectors
Strong security partnerships and military cooperation frameworks
Shared concerns about Chinese territorial assertiveness in the South China Sea
Challenges:
Growing regional concerns about debt sustainability in BRI projects
Territorial disputes create tensions with multiple ASEAN members
Increasing scrutiny of Chinese technology and investment practices
Opportunities:
Economic integration through trade and investment relationships
Infrastructure development meeting genuine regional needs
Multilateral engagement through BRICS and other alternative institutions
The immediate future will likely see continued intensification of economic competition, with both powers using trade, investment, and technology transfer as tools of influence. Southeast Asian nations will continue their hedging strategies, seeking to maximize benefits while minimizing risks from superpower competition.
The impact of American tariff policies will become clearer as regional economies adjust to new trade patterns. Countries most affected by tariffs may accelerate their pivot toward China and alternative trading partners, potentially reshaping regional economic integration patterns.
The sustainability of current competitive approaches will face testing as economic costs accumulate and regional patience with superpower rivalry potentially diminishes. ASEAN's collective bargaining power may increase as member states coordinate their responses to external pressure.
Technological competition will likely intensify, with both powers seeking to establish dominant positions in emerging technologies such as artificial intelligence, renewable energy, and digital infrastructure. The outcome of this competition will significantly influence the region's long-term development trajectory.
The current phase of Sino-American competition in Southeast Asia represents a fundamental shift toward a more fragmented and contested regional order. Traditional assumptions about economic interdependence promoting stability are being challenged by the weaponization of trade and investment relationships.
The ultimate outcome will depend largely on the ability of regional actors to maintain strategic autonomy while managing the pressures and opportunities created by great power competition. Southeast Asia's experience in navigating this competition may provide lessons for other regions facing similar challenges.
The second Trump administration has intensified Sino-American competition in Southeast Asia through aggressive economic policies and renewed emphasis on strategic competition. While this approach may achieve some tactical objectives, it risks undermining long-term American interests by alienating regional partners and creating opportunities for China to expand its influence.
China's more patient and economically focused approach, despite its own challenges and limitations, appears better aligned with regional preferences for development-oriented partnerships and strategic autonomy. However, growing concerns about Chinese assertiveness and debt sustainability provide opportunities for American re-engagement on more collaborative terms.
The ultimate success of either approach will depend on understanding and responding to regional priorities rather than simply projecting power. Southeast Asian nations have demonstrated remarkable skill in managing great power competition throughout their history, and their responses to current American and Chinese strategies will significantly shape the future balance of power in one of the world's most important regions.
The stakes in this competition extend far beyond Southeast Asia itself, as success or failure in the region will influence broader Indo-Pacific dynamics and the global balance between democratic and authoritarian governance models. Both superpowers would benefit from approaches that recognize regional agency and preferences while pursuing their legitimate strategic interests through cooperation rather than coercion.