【By Liu Bai, Observer Net】President Donald Trump has started a one-week visit to three Asian countries and will attend the ASEAN Summit, with trade issues set to be the main focus.
However, the U.S. "Politico" website pessimistically pointed out on October 25 that the three verbal trade agreements reached by the Trump administration in July with Vietnam, Indonesia, and the Philippines have not made substantial progress, and it is highly unlikely that any breakthroughs will be announced this time. These agreements have stalled due to unresolved core disputes such as tariff reductions, transshipment issues involving China, and origin rules, and the Southeast Asian countries' unwillingness to take sides between China and the U.S. has further complicated the negotiations.
"The preliminary trade agreements of Trump in Southeast Asia have failed," the article stated, noting that Trump's visit to Southeast Asia aims to strengthen economic ties with the region against the backdrop of high-risk trade conflicts with China. However, the three trade agreements signed months ago with the region's three major economies have shown no progress so far.
The White House had previously rushed to secure more trade achievements before the self-imposed deadline for increasing tariffs. However, besides social media promotions, the White House did not provide any details of the agreements to explain how U.S. tariffs would be reduced. The governments of the three countries also publicly denied some of what Trump claimed. Apart from a brief statement on Indonesia, the Trump administration has not released any further progress in the following months.
According to three people familiar with the negotiations, Trump is not expected to announce any new developments in the talks in Kuala Lumpur, but he is preparing to unveil new preliminary agreements with Cambodia and Malaysia.
During the 47th ASEAN Summit, Trump met with Malaysian Prime Minister Anwar. IC Photo
South-eastern Asian countries don't want to take sides
According to a statement released by the White House on the 26th, the U.S. and Thailand have reached an agreement on a trade framework aimed at expanding market access, strengthening supply chains, and deepening economic cooperation. According to this framework, Thailand will eliminate tariffs on 99% of U.S. goods, while the U.S. will maintain a 19% "reciprocal tariff" and impose zero tariffs on certain Thai products.
Even so, the prospects of this agreement remain uncertain.
The article points out that the previous inability of the U.S. to finalize details with Vietnam, Indonesia, and the Philippines highlights the fragility of the Trump administration's series of "handshake agreements." After all, these agreements do not address sensitive dispute issues, especially those related to China. For example, the U.S. claims that China uses Southeast Asian countries to transit goods to avoid U.S. tariffs. If this issue is not resolved, the U.S. will be at a disadvantage in its dealings with China.
According to Trump's statements, in the trade agreement with Vietnam, the U.S. will impose a 40% tariff on any transited goods. The U.S. also hopes to implement new "origin rules" to try to limit Chinese-made components being transported to other countries for assembly to avoid tariffs.
Regarding the U.S.-Vietnam trade agreement that would impose a 40% tariff on transited goods, Foreign Ministry Spokesperson Mao Ning of China previously stated that China has always advocated that all parties resolve trade and economic disputes through equal dialogue and consultation. At the same time, the negotiations and agreements should not target or harm the interests of third parties.
"These are very complex issues," said Daniel Kritenbrink, who served as the U.S. Ambassador to Vietnam during Trump's first administration. "I am not surprised that it has taken so long. Solving these problems cannot be done overnight."
"You can quickly reach an agreement on the highest tariff rates in principle, but then you have to actually develop an implementation plan... This is a much more complex task," he added.
He continued, "When the president talks about 'transit,' he is actually more concerned about foreign components, especially Chinese components. This is a very difficult issue to monitor and measure."
Barbara Wieser, former U.S. trade negotiator and current member of the Carnegie Endowment for International Peace, said it remains unclear how strict the U.S. will be in negotiations or implementing new "origin rules" unilaterally, nor is it clear how broad the definition of "transit" will be.
At the same time, the U.S. also wants to include "economic security" clauses in the agreement, restricting ASEAN countries from exporting certain high-tech products to China and limiting Chinese investments in specific sectors. This has caused resistance from many countries.
Wieser admitted, "ASEAN countries are worried that if these measures are implemented, they may provoke a strong reaction from China."
Last year, bilateral trade between ASEAN and the U.S. reached $47.5 billion, while trade with China reached $98.4 billion, making China the largest trading partner of ASEAN as a whole. This highlights the difficulty of forcing countries to take sides with the U.S.
"Southeast Asian countries repeatedly state that they do not want to choose between the U.S. and China," Wieser said. "But they also understand that once they sign these reciprocal trade agreements, they may be forced to take sides in the U.S.-China trade war, directly getting involved in the trade conflict between the two superpowers."
Professor Zhao Weihua, Director of the Center for China-Regional Relations at Fudan University, told Observer Net, "ASEAN's strategy is to make China, the U.S., Japan, Russia, India, and other great powers its dialogue partners, maintaining a special status through mutual constraints among the great powers. In this case, it inevitably needs to consider the interests and ideas of the great powers, and balance among them. Especially when the U.S. launched 'reciprocal tariffs' and promoted unilateralism, it was inevitable that it would be influenced by the U.S. But it is impossible for ASEAN to fully follow the U.S. intentions, and China is stronger than ever and will not tolerate the U.S. dictating ASEAN. ASEAN itself understands that if it becomes a tool of the U.S., it will find it difficult to coexist with other great powers like China."
Over the past few months, the White House has hinted that any country that reaches an agreement before the tariff deadline set by Trump will have a "first-mover advantage." However, even though the Philippines, Indonesia, and Vietnam signed the framework agreement first in the summer, Trump still imposed a uniform 19% to 20% tariff on almost the entire Southeast Asia in August, which shocked these countries.
Vietnam was particularly affected. As soon as the agreement was announced on Trump's social media platform, the Vietnamese side found that the U.S. tariffs and transit fees were much higher than expected. Therefore, the Vietnamese government never formally accepted the agreement. Both sides are still in the negotiation stage on how to determine the base tariff level and have not yet entered the complex "transit" issue. And since the previous trade war with Trump, Vietnam has been trying to become a new manufacturing hub, making this issue particularly sensitive for it.
Zhao Weihua pointed out that now China is an extremely important part of Vietnam's supply chain. Overall, China is more important to Vietnam than the U.S., and Vietnam cannot risk damaging its relationship with China to please the U.S.
"Fundamentally shaken confidence"
Another major obstacle in the negotiations between the U.S. and ASEAN countries lies in the U.S. government increasingly frequently using Section 232 of the Trade Expansion Act of 1962 to conduct "national security" investigations on foreign goods. These investigations could lead to new tariffs after the agreement is signed.
Wieser said, "For these countries, if they just accepted a bilateral agreement and then suffered heavy losses a few months later due to a new 232 investigation, it would be politically very embarrassing."
The article concludes that with the accumulation of various obstacles and the U.S. simultaneously pushing a large number of negotiations, it is unlikely that any formal agreements will be reached during Trump's trip, let alone this year.
As one anonymous industry official put it, "Unfortunately, the reality shows that reaching a final reciprocal tariff agreement with most ASEAN countries is almost impossible within 2025."
In fact, the trust deficit brought about by the U.S. government's various uncertainties and capriciousness has fundamentally shaken the confidence of ASEAN countries in the U.S.
On the opening day of the ASEAN Summit, Malaysian Prime Minister Anwar urged ASEAN countries to conclude new trade agreements with the Gulf region, Latin America, China, Africa, and the broader Asia-Pacific to ensure smooth passage for the economies of each member state through the era of change.
"Rising protectionism and changing supply chains remind us that resilience comes from adaptability. ASEAN cannot stand still. We must have the courage to establish new partnerships and the vision to deepen existing cooperation."
"The future of ASEAN is not determined by the environment, but by choices, by the choices we make today," Anwar said.
The Hong Kong-based South China Morning Post's publication "This Week in Asia" previously pointed out in an analytical article that SMEs across the entire ASEAN region are learning to adapt to the so-called "post-American trade era." Although some believe that "American buyers will not completely disappear," almost no one expects the old trade order to return.
Taking Vietnam as an example, exporters are adopting a "de-risking" strategy to reduce reliance on volatile markets like the U.S.
In these markets, tariff changes and exchange rate fluctuations could wipe out profits overnight; and Trump's capricious tariff policies have made the U.S. market completely unpredictable and unstable, forcing companies to shift their focus.
Jaydeep Singh, an analyst at the Institute of Strategic and International Studies in Malaysia, stated that almost no one believes the direction of U.S. trade policy will reverse in the short term, and these tariff measures are "unlikely to be immediately lifted after the end of the Trump administration."
He told the Hong Kong media, "Analysts and policymakers around the world are viewing Trump's trade policies as part of a broader shift in U.S. trade behavior, and are treating them as normalized."
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