Trump Tariffs Spark Regional Cooperation, Negotiations

SAMARKAND, SATURDAY—The new import tariff rates to the United States have officially come into effect. Various countries and international organizations are seeking ways to address the impact of President Donald Trump's policy.

A 10 percent tariff on nearly all imported commodities to the U.S. officially took effect on Saturday (5/4/2025). Next week, as announced by Trump earlier this Tuesday, additional tariffs that could reach up to 50 percent will also come into effect.

As reported by Euronews, the European Union responded to the tariffs in various ways. One of them was by meeting representatives of Central Asian countries. European Commission President Ursula von der Leyen and European Council President António Costa came to Samarkand, Uzbekistan on April 3-4, 2025.

They met with the leaders of Uzbekistan, Kazakhstan, Kyrgyzstan, Tajikistan, and Turkmenistan in Samarkand. "Our meeting today further promotes cooperation between the European Union and Central Asia in a multilateral forum, strengthening our shared commitment for a safe world and a prosperous global order," said Costa.

Meanwhile, von der Leyen announced a new EU investment package in Central Asia. A fund of 3 billion euros will be allocated for transportation projects. Meanwhile, 2.5 billion euros will be allocated for critical minerals. In addition, 6.4 billion euros will be allocated for water, energy, and climate projects.

Central Asia has large reservesof critical minerals. Up to 38 percent of manganese, 30 percent of chromium, 20 percent of lead, 12 percent of zinc and 8.7 percent of titanium are estimated to be in Central Asia. “These raw materials are the lifeblood of the global economy,” von der Leyen said.

He claimed that the EU came to be a partner in developing local industries for the utilization of critical minerals. The EU's approach, he said, is different from other countries.

Not only the EU, mitigation through regional cooperation is also carried out by Indonesia. Communication with the Chair of ASEAN 2025, ASEAN, has already been conducted by Indonesia to respond to Trump's decision.

Indonesia, for instance, is communicating with Malaysia as the holder of the ASEAN Chairmanship. "Synchronization among ASEAN countries is necessary because all 10 ASEAN countries are affected by the reciprocal tariff policies of the United States. Therefore, it is essential to establish communication and collective engagement with the U.S. government," said Coordinating Minister for Economic Affairs Airlangga Hartarto, Friday (4/4/2025).

All ASEAN countries are indeed subject to the new U.S. import duty tariffs. Some, like Singapore, are only subject to a 10 percent tariff. Meanwhile, Malaysia, Indonesia, Thailand, Vietnam, and Cambodia are subject to tariffs of 24 percent, 32 percent, 36 percent, 46 percent, and 49 percent, respectively.

For Indonesia, the US is an important source of trade surplus. In 2024, Jakarta recorded a surplus of 16.08 billion US dollars from trading with Washington DC. Throughout 2024, Indonesia's total trade balance surplus was recorded at 31.04 billion US dollars.

A surplus for Indonesia means a deficit for the US. According to the US version, the value reaches 17.9 billion US dollars in 2024 alone. Therefore, Indonesia is subject to a BMI of up to 32 percent.

The impact will be felt by various exporters, including furniture. "Around 53 percent of Indonesian furniture products are sent to the US," explained Abdul Sobur, Chairman of the Indonesian Furniture and Craft Association.

"(The impact of imposing tariffs) is significant and of course can reduce the competitiveness of Indonesian furniture products in the US market," said Abdul Sobur.

The Indonesian Ministry of Foreign Affairs also said that reciprocal tariffs will have a significant impact on Indonesian exports to the US. Some of Indonesia's export products that will be affected include electronics, textiles, footwear, and palm oil.

Cooperation with countries from other regions is also an option for Germany. "Forming alliances is an obligation today," said German Economy Minister Robert Habeck.

Germany is eyeing Mexico, Canada and India for cooperation, saying closer trade ties with those countries would make sense.

However, as Reuters reports, such trade deals can take time. The EU-South American Mercosur bloc (Argentina, Brazil, Paraguay, Uruguay) took 25 years to negotiate, with the EU and Mercosur finally reaching a free trade deal in December 2024.

China will also strengthen cooperation for export market development. "We need to strengthen our coordination with ASEAN, Japan, South Korea, the European Union, and the UK," said a Chinese policy adviser who did not want to be identified.

Observers expect Beijing to roll out more fiscal stimulus to support the domestic economy. China exports more than $400 billion to the US.

China has been coordinating more and more with Japan and South Korea in recent years. Ahead of Trump's BMI announcement, officials from the three countries met and discussed trade together.

Some doubt trade between them will increase, as they are both exporters who need markets.

In addition to strengthening regional cooperation, a number of US trading partner countries also plan to send delegations to the US to negotiate tariffs. The Indonesian Ministry of Foreign Affairs will send a delegation to Washington to negotiate directly with the US Government.

Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) Anindya Novyan Bakrie in a statement, Thursday (3/4/2025) evening stated, "The tariff is only an opening statement. This means the door for negotiation is still open. Intensive communication with the US government is the right step."

Vietnam will also be in talks with the US. Negotiations appear to be limited to subsidies and trade diversification. “Vietnam could try to use the exposure that some US manufacturers have to Vietnam to pressure the Trump administration,” said Leif Schneider, head of international law firm Luther in Vietnam.

However, Schneider added, Vietnam will likely prioritize negotiations to avoid economic shock.

While India is currently in talks with the US, India is subject to a reciprocal tariff of 27 percent.

Analysts at Berenberg Bank in Germany said some BMI for the EU could be canceled through negotiations. The EU, according to Berenberg, could offer defense contracts as compensation to the US.

Deutsche Bank economist Robin Winkler said the world needs time to mitigate the impact of Trump's policies. Structural reforms, such as more competition and technology investment, are better than government stimulus. "There's not much that can be done with fiscal or monetary policy in the short term to offset the trade shock," he said. (AFP/REUTERS)