Trump Tariffs, Opportunity or Obstacle?

Two separate events in different parts of the world have made the Association of Southeast Asian Nations, or ASEAN, more dynamic. The first event was a 7.7-magnitude earthquake that struck Myanmar and Thailand on Friday (28/3/2025). So far, it has been recorded that the earthquake claimed approximately 3,500 lives. Search and rescue missions are still ongoing.

The second event is the "tariff storm" initiated by United States President Donald Trump on Wednesday evening (2/4) Washington DC time or Thursday morning (3/4) Jakarta time. Many countries that are trade partners of the U.S. were affected, including all ASEAN countries.

Under Trump, Cambodia was subjected to a new import tariff of 49 percent, followed by Laos at 48 percent, then Vietnam at 46 percent, Thailand at 36 percent, Indonesia at 32 percent, Malaysia and Brunei each at 24 percent, and finally the Philippines and Singapore at 17 percent and 10 percent respectively. Referring to various data, the trade value between the U.S. and ASEAN has indeed tended to "favor" the member countries of the association.

The total trade value between the U.S. and ASEAN in 2024 reached 476.9 billion U.S. dollars, consisting of U.S. exports to ASEAN amounting to 124.6 billion U.S. dollars and U.S. imports from ASEAN totaling 352.3 billion U.S. dollars. These figures indicate that ASEAN experienced a trade surplus with the U.S. Globally, the U.S. recorded a trade deficit in goods amounting to 1.2 trillion U.S. dollars with 92 countries (Kompas, Friday, April 4, 2025). Although the U.S. registered a surplus with 111 other countries, Trump had already felt that the U.S. had been treated unfairly all this time.

"In many cases, especially in terms of trade, friends are worse than foes," said Trump while announcing the policy at the White House. "We subsidize many countries and enable them to do business and thrive," he continued.

According to Trump, the trade deficit is no longer merely an economic issue. The deficit, Trump continued, is a national emergency. The culmination of Trump's concern was "sealed" by signing an executive order on tariffs. "This is our declaration of independence," said Trump from the Rose Garden at the White House.

The day he set the new import tariffs he called “Liberation Day”.

A day after announcing the tariff, during his journey to Florida, Trump, inside the cabin of Air Force One, told reporters that every national leader would soon contact him.

"We have placed ourselves in the driver's seat. If we ask some countries, or most countries, to help us, they will say no. (But) now they will do anything for us," said Trump.

Sure enough, a number of world leaders contacted Trump. They offered to negotiate, one of them was Vietnam Communist Party General Secretary To Lam. Vietnam, as conveyed by To Lam, would cut import tariffs on US products with equal compensation. Trump warmly welcomed the offer.

“(I) just had a very productive phone call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam is willing to cut their tariffs to zero if they can make a deal with the U.S.,” Trump wrote on his Truth Social platform. “I thanked him on behalf of our country, and said I look forward to meeting in the near future.”

Vietnam is indeed badly affected by the tariffs. The US is Vietnam's main export destination. In 2024, the country recorded a trade surplus of 123 billion US dollars against the US. It is not surprising that Hanoi needs to bilaterally "persuade" Trump to ease his pressure.

However, according to a researcher at The Habibie Center and a lecturer in International Relations at the University of Indonesia, Shofwan Al Banna Choiruzzad, Trump's practices are actually "dangerous". Trump unilaterally forces his trading partner countries to obey Washington's will.

"The major impact of the tariff policy is the collapse of the multilateral trade regime and puts pressure on the global economy," said Shofwan.

Negotiations, according to him, are a short-term step that can be taken. However, for the long term, there needs to be a firmer stance from countries in the world. According to Shofwan, such undermining cannot be allowed because it could be imitated by other major world powers, namely China.

It would be much better if world leaders started to think about joint efforts to build independence, not solely depending on the two major world powers, the US and China. He saw Indonesia's efforts to collaborate with ASEAN to respond to Trump's tariff policy as a good step. "We need a new area, building alternatives with scenarios if the major powers do not comply with the agreement," said Shofwan.

As the traditional leader of ASEAN, Indonesia can encourage regional consolidation, both through the association and other platforms, such as ASEAN Plus Three (ASEAN, Japan, South Korea, and China), and ASEAN-European Union. According to Shofwan, the potential for consolidation of power is great because the economic performance of all countries is export-oriented and depends on a stable world trade regime. And, the world actually has the same interest in the stability of global trade governance.

"Whether we dare or not, we need leadership now, and Indonesia must have a clear stance," said Shofwan.

The same thing was also emphasized separately by the Center for Strategic and International Studies (CSIS) researcher, Deni Friawan.

According to him, in the region, Indonesia must dare to play a role. ASEAN is seen as a potential platform for Indonesia to consistently prioritize global-based behavior.

In practice, Indonesia and ASEAN can do it through RCEP. In addition, for Indonesia itself, Jakarta needs to immediately complete the Comprehensive Economic Partnership Agreement with the European Union. For the record, throughout 2024, the total value of Indonesia-European Union trade reached 27.6 billion US dollars with Indonesia recording a surplus of around 4.4 billion US dollars. This means that there is potential or alternative markets other than the US.

The note shows that there are a number of alternatives that can be optimized by Indonesia or ASEAN with various available platforms. Deni hopes that Indonesia can soon follow Vietnam which has already had a comprehensive economic partnership with the European Union. The partnership allows Vietnam to export goods to the European Union without being taxed.

Meanwhile, the founder of the Synergy research institute, Dinna Prapto Raharja, argued that the current situation can be directed to position ASEAN as a hook and hub for regional interests. It must be admitted that so far ASEAN has seemed more optimal as a platform to answer political and security issues than the economic sector.

In that context, Indonesia, according to Dinna, can emulate Vietnam's more agile steps and have a solid strategy in bilateral cooperation with major world powers. This flexibility led Hanoi to sign free trade agreements with several major countries.

"They don't look far away, but focus on nearby countries," said Dinna.

Referring to Vietnam's strategy, Dinna argued that the steps taken by Indonesia need to be parallel. On the one hand, strengthening bilateral negotiations, and on the other hand, strengthening regional cooperation, especially for the economic sector. The current situation, according to him, requires togetherness and solidarity because what is being faced is a power, which according to Shofwan, tends to suppress and act unilaterally.

Professor of the Faculty of Social and Political Sciences, Gadjah Mada University, Yogyakarta, Poppy Sulistyaning Winanti said that building an alternative market requires a number of considerations.

"One of them is the level of compatibility with Indonesia. To what extent can the alternative market complement both the export side as a market destination and imports to supply needs that cannot be met either independently or as a supplier of industrial raw materials in the country," Poppy wrote via short message.

Regarding the format of cooperation, regional or bilateral, both, according to Poppy, are possible. "Each has advantages and disadvantages," said Poppy.

Tariffs are a challenge. But on the other hand, they open up opportunities. (AP)