Donald Trump has been elected as the 47th President of the United States on November 15, 2024, a development that analysts predict will significantly reshape the economic and geopolitical landscape for ASEAN and West Asia. Trump's previous presidency (2017-2021) was characterized by 'America First' policies, which are expected to resurface, potentially leading to substantial changes in U.S. foreign relations and trade agreements [69c844f0].
In Southeast Asia, the implications of Trump's victory are particularly pronounced. Analysts warn that his proposed tariffs of at least 60% on Chinese products and up to 20% on all U.S. trading partners could severely impact China's economy and nations that rely heavily on exports to China, including Malaysia. While Prof. Azmi Hassan suggests Malaysia may not be directly impacted, he warns of broader economic repercussions that could arise from these tariffs [69c844f0]. This situation is further complicated by Malaysia's potential membership in BRICS, which may distance it from U.S. ties as it chairs ASEAN in 2025 [69c844f0].
Trump's new tariffs on Chinese imports could initially benefit Southeast Asia by diverting manufacturing to countries like Vietnam and Thailand. During Trump's first term, U.S. tariffs on China reached 25%, which led to a significant influx of Chinese investment into Vietnam, accounting for 29.7% of new Chinese investment in the first seven months of 2024 [32d223e5]. Vietnam has seen increased exports to the U.S. but will need to strengthen its domestic manufacturing capabilities to fully capitalize on these opportunities [e6e7227a]. However, the new tariffs pose risks, particularly for Cambodia, Vietnam, and Thailand, which have high export exposure to the U.S. Thailand could face a $4.6 billion hit due to these tariffs [e59ae952].
The economic relationship between the U.S. and ASEAN is already significant, with bilateral trade reaching US$500 billion last year and U.S. foreign direct investment in the region at US$480 billion [5bf6d2e7]. However, Trump's administration may impose heavy tariffs that could affect Southeast Asian exports, potentially declining by up to 8% [28d09c92]. Adam Ahmad Samdin from Oxford Economics has also highlighted that lower U.S. demand for Chinese products could negatively impact ASEAN exports, particularly in sectors like electronics, which are crucial for countries like Vietnam [dae4e343].
Moreover, Trump's cabinet is expected to include China hawks like Mike Waltz and Marco Rubio, which raises concerns about the U.S.'s approach to defense alliances in the region. Hoang Thi Ha from ISEAS warns of an uncertain future for defense partnerships, emphasizing the risks stemming from Trump's skepticism towards existing alliances [e6e7227a]. The juxtaposition of U.S. and Chinese influence in the region remains a critical factor, as recent analyses indicate that while China has been perceived as the dominant economic force in ASEAN, its influence has seen a decline from 75.2% in 2019 to 59.5% in 2024 [c26bd5db].
As Southeast Asian nations prepare to navigate these changes, strengthening regional integration, diversifying trade relationships, and fostering innovation will be essential strategies to mitigate risks associated with fluctuating U.S. policies. The upcoming U.S. elections and Trump's administration will undoubtedly shape the future of these relationships, making it crucial for ASEAN nations to engage strategically with both the U.S. and China [5bf6d2e7][69c844f0]. Furthermore, Southeast Asian currencies may weaken, with the Thai baht and Malaysian ringgit already declining since Trump's victory, highlighting the economic uncertainty in the region [e59ae952].