ASEAN and China deepen ties amid threat of new US tariffs

On Thursday, ASEAN foreign ministers emphasized the strength of the bloc’s relationship with China as they sought to deepen ties with Beijing in the face of new “reciprocal” punitive tariffs threatened by US President Donald Trump. Experts believe Trump’s aggressive tariff policy is bringing ASEAN and China even closer.

In his opening speech at a meeting in Kuala Lumpur with ASEAN foreign ministers and their Chinese counterpart, Wang Yi, Malaysian Foreign Minister Mohamad Hasan said that China is “one of ASEAN’s most important and dynamic partners.”

“This relationship is built on mutual trust, common interests, and growing economic interdependence,” he said.

Wang echoed these sentiments, emphasizing the countries’ shared Asian identity and goals. “China has always seen ASEAN as a priority in its neighborhood diplomacy and sees the region as a pioneer in building a global community with a shared future for humanity,” he said.

The meeting was part of the annual Ministerial Conference of ASEAN foreign ministers. Following the meeting, there will be meetings with Japan, China, and South Korea, as well as with US Secretary of State Marco Rubio and other dialogue partners.

Addressing the ongoing geopolitical shifts, Wang noted that the current global turmoil and transformation raise questions of unity or division, peace or conflict, and cooperation or confrontation.

“We must learn from history, actively promote an equal and structured world order, and push the international system toward greater justice and equality by supporting inclusive and shared economic globalization,” he said.

Trade relations

Since 2020, ASEAN and China have remained each other’s largest trading partners, with total trade volume reaching $770.9 billion in 2024, a 10.6% increase from the previous year.

In May, the two sides announced the ASEAN-China Free Trade Area (ACFTA) 3.0 agreement after nine rounds of negotiations spanning two and a half years.

The upgraded agreement includes nine new chapters covering the digital economy, green economy, and supply chain connectivity. China’s Ministry of Commerce described this framework as a gateway to building the China-ASEAN mega-market.

Meanwhile, ASEAN members are preparing for new US tariffs set to take effect on August 1. The tariffs are set at 40% for Myanmar and Laos, 36% for Cambodia and Thailand, 32% for Indonesia, 25% for Malaysia and Brunei, and 20% for Vietnam and the Philippines. Washington has not yet announced an updated rate for Singapore, which was taxed at a 10% rate when the tariffs were announced in April.

Response to tariffs

On Wednesday, at the start of the ASEAN foreign ministers’ meeting, Malaysian Prime Minister Anwar Ibrahim stated that trade is being used as a tool for “pressure, isolation, and control,” adding that “tariffs, export restrictions, and investment barriers have now become sharp instruments of geopolitical competition.”

In a speech to parliament on Wednesday, Indonesian Finance Minister Sri Mulyani called for multilateral institutions such as the World Trade Organization, the UN, and the World Bank to play a more significant role in the trade war. “The role of these multilateral institutions has been greatly weakened and is not even respected,” she said.

Thailand announced $1.22 billion in mitigation measures. According to Deputy Finance Minister Paopoom Rojanasakul, Thailand’s central bank is also expected to further loosen its monetary policy to reduce tariffs.

A draft of the joint communique from the foreign ministers’ meeting, seen by Nikkei Asia, describes unilateral tariffs as “counterproductive” and warns that they “risk exacerbating global economic fragmentation and posing complex challenges to ASEAN’s economic stability and growth.” The draft, expected to be released on Friday, affirms that ASEAN is “committed to working constructively with all partners to this end.”