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ASEAN in life and death poker game with Trump
Donald Trump, on Thursday (April 10), gave ASEAN and some Asian countries some cause for celebration after the US President pitted the brakes on his “reciprocal” tariffs. Ostensibly, Trump had made the decision after witnessing the massive market devastation the tariffs unleashed.
ASEAN Ministers gathering in Kuala Lumpur said in a joint statement that the bloc was “united in the opinion that retaliation is not an option.” But there is a state of tension and unease caused by an apprehension that the mercurial US president may yet change the course of his actions. The ASEAN statement said the tariffs were “introducing uncertainty and undermining trust in the global trade system.”
Indonesia’s deputy finance minister, Thomas Djiwandono, expressed concern as to who ASEAN leaders would have to talk to in bringing down the tariffs. Indonesia, which has the largest economy in ASEAN, is prepared to send a representative as part of the bloc’s negotiating team to Washington. But, the Economic Ministers meeting in Malaysia, which now chairs ASEAN, seemed confused and very concerned over the region’s future while trying to unpack the full implications of the punitive tariffs.
Some of ASEAN’s 10-member nations have been hardest hit, with Cambodia’s goods subjected to a 49 % tax. Meanwhile, Indonesian exports face 32 % while Vietnam 46 %.
Investors have reacted negatively to the massive selling that has wiped out all exchanges in the region.
No countermeasures planned
Vietnam, Cambodia and Indonesia have proposed to reduce duties on US imports and lift other restrictions. The bloc has decided on a united stand that it will not take retaliatory measures like China. However, the pace with which things move in the region has caused some to call for urgency in sending off a strong delegation to the US to stem the disaster should the tariffs proceed.
ASEAN has been seen as an alternative to China’s industrial might, and business enterprises have moved their production to the region after Trump started a trade war with China in his first term in office.
Poker game with no cards
Hosts Malaysia, which faces a 24 % tariff, expressed positive vibes and relative calm. Its second finance minister, Amir Hamzah Azizan, said he was “chill” about the whole matter.
Not everyone will agree with him, even as the local bourse shed 8 % over the last week with investors pulling out. With very few good cards in hand, playing poker with Trump, who has a full hand, does not have much prospect of a win-win outcome.
In a rush to appease Trump, Cambodia and Vietnam have vowed not to retaliate, unlike China and Europe.
An adviser to Thai Prime Minister Paetongtarn Shinawatra put it down very well: “The problem is this: You go in too soon, and President Trump thinks he has all the cards. Remember, he’s playing poker, so timing is everything.”
