ASEAN readies new trade deals for 'future without US'

The bloc is set to face a 10 percent drop in exports to the US due to tariffs imposed by Trump  

News Desk - The Cradle 

The Association of Southeast Asian Nations (ASEAN) is set to sign trade agreements with several countries as it plans to protect itself from US President Donald Trump’s tariffs. 

A trade agreement between Canada and ASEAN is scheduled to be signed by the end of 2026.

Additionally, an upgrade to the China–ASEAN Free Trade deal will be signed next month. An upgrade to its trade deal with India is also being worked on. 

Negotiations to boost a trade deal with South Korea are in the works as well. The bloc is reportedly considering expanding toward the Gulf region. 

ASEAN is also planning to expand the Regional Comprehensive Economic Partnership (RCEP), which includes 15 countries, including China, Japan, and South Korea – potentially bringing in countries such as Bangladesh, Sri Lanka, and Chile. 

A new report from the UN Development Program (UNDP) shows that Southeast Asia is set to be hit hardest by US tariffs. 

According to the report, it will face a nearly 10 percent drop in exports to the US. 

The ASEAN bloc includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

“Southeast Asia will definitely be hard hit by Trump’s tariffs as much of the region’s growth is tied to exports, especially in sectors like electronics, semiconductors, garments, and footwear,” Joanne Lin, a senior fellow at the ISEAS-Yusof Ishak Institute’s ASEAN Studies Centre, told This Week in Asia.

Last week, ASEAN economy ministers met in Kuala Lumpur, Malaysia. In a statement, the ministers expressed “concern over the growing trend of protectionism and the rise of unilateral trade measures.”

A report by Foreign Policy says ASEAN is “now preparing for a trading future that does not rely on the US.”

“The US accounts for about 13 percent of global trade, and if it defected from the current international trading system, that would hurt. But, ASEAN will be fine so long as it can keep the old rules going with the other 87 percent of the world,” a source close to the bloc told the outlet. 

In May this year, the bloc approved a landmark financial assistance mechanism that ditches the greenback for the yuan and other regional currencies. 

Francesco Pesole, FX strategist at ING, said in June that Trump’s “erratic” policy is encouraging the shift away from the dollar.