By PRIME SARMIENTO and YANG HAN in Hong Kong | Updated: 2025-02-15 07:28

Experts are advising Southeast Asian nations to reassess and renegotiate their trade agreements with the United States following Washington’s plans to impose reciprocal tariffs on key trading partners.

On February 15, 2025, US President Donald Trump issued a memorandum instructing his administration to consider imposing “reciprocal tariffs with respect to each foreign trading partner.”

Many ASEAN member countries have economies heavily dependent on exports, with the United States as one of their main markets. Nomura analysts noted that Thailand could face higher reciprocal tariffs due to higher relative tariffs on US exports compared to Indonesia, the Philippines, and Singapore.

Thailand has significant exposure to agriculture and transportation sectors. US agricultural exports构成0.8% of Thailand’s GDP, while transport products account for 0.5%. In contrast, Indonesia’s transport exports to the US only represent 0.02% of its GDP.

Deputy Secretary-General to Thai Prime Minister Paitoon Shinawatra, Pongsarun Assawachaisophon, urged Thai petrochemical companies to increase US ethane procurement by at least 1 million tons.

“Thailand aims to leverage this action in US trade negotiations,” stated Assawachaisophon to Bloomberg News.

Nomura analysts observed that Singapore, a more developed economy, faces lesser risks from reciprocal tariffs. However, they cautioned Singapore could still be impacted if the US targets pharmaceuticals and semiconductors or renegotiates free trade agreements.

Other ASEAN countries are also working on mitigating the potential impacts of these tariffs.

Indonesia’s Trade Minister Nguyen Hong Dien expressed readiness to expand its agricultural product imports from the US. This move aligns with the country’s strategy to improve bilateral trade relations.

Vietnam, one of the top countries with a trade surplus with the US, is also taking proactive actions. Chief economist of Mekong Economics, Adam McCarty, advised Vietnam to respond swiftly and consider any possible trade balance issues.

“Understand Trump’s economic rationale, even if it doesn’t align with conventional economists,” McCarty told China Daily. “He sees tariffs as a way to protect American industries and jobs.”

Earlier in February, Trump implemented additional levies on Chinese goods and tariffs on steel and aluminum imports from all nations. While ASEAN economies were not directly targeted, they are implementing policies to safeguard against increased trade protectionism.

The situation underscores the critical need for Southeast Asian economies to diversify their export markets and engage in strategic negotiations to mitigate potential risks associated with US tariffs. Countries like Thailand, Indonesia, Philippines, and Singapore are already preparing for such contingencies.

As global trade dynamics evolve, understanding and adapting to each nation’s unique economic challenges and opportunities will be key to sustaining growth and stability in the region.

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