This article first appeared in Forum, The Edge Malaysia Weekly on April 14, 2025 - April 20, 2025

US President Donald Trump has brought disorder to America and the world in three short months, from which there is no turning back. America is undergoing a deeply divisive unfinished civil war critical to the survival of its democratic system of government. The world is being turned upside down with both its economic and political-security order wreaking uncertainty, and this will have permanent systemic implications.

The distress is over what to do about Trump’s America now. For the future, for the rest of the world, the American era is over, along with the global order America commanded.

Asean, as a group, has to develop a common sense of the strategic consequences of Trump’s policies and what they mean to the regional grouping. Individual member states, of course, have to take whatever course of action deemed necessary in reaction to immediate challenges, especially from Trump’s “reciprocal tariffs” announced last week, which went into full flood on April 9. 

Tariffs had been imposed earlier against other countries and sectors. Financial markets are rocking, real individual target economies and prospects are heading downwards. An open trade war between the world’s two largest economies — the US and China — is in the works. A calamitous military conflict between the two is not improbable at the rate Trump is going.

Trump will be around for a while yet, even if his fanciful notion of serving a third term does not materialise — although it would be foolhardy to dismiss it entirely whatever the American constitution says. A two-thirds majority in both the Senate and the House of Representatives and three quarters of state legislatures for constitutional amendments may seem out of reach, but unheard-of things are happening in America under this administration.

Even if Trump does not continue after 2028, the consequences of his nihilistic policies on America and the world will be far-reaching and long term. The Biden administration in the four years from 2021 did not achieve any abiding restoration after the disorder of Trump 1.0. Now, with his second administration, Trump has carried on, quickly substituting whatever went for a global order with a world without a stable structure. He is, in a blinkered fashion, accelerating American decline and isolation, exhausting the power and influence it still possesses for now, which will be diminished in the post-American world.

Asean, and others, should not be as complacent as Fareed Zakaria, who wrote the book The Post-American World and the Rise of the Rest as long ago as 2011. Not letting go, in December 2023, in 

Foreign Affairs, America’s liberal establishment publication, Fareed was writing, “America should not give up on the world it made”. That world actually has been going, will be gone by the time Trump is finished with it. Asean should prepare itself for what is to come.

In the immediate term, Asean member states are scampering to find out how exactly their exports to America are affected by Trump’s reciprocal tariffs. Now he has backed down from most of them for 90 days — but raised China’s to 125%. There is no good news. A disappointed Singapore, hit by the lowest base-line tariff of 10%, was seeking clarification on how the Trump administration calculated the purported tariff numbers, looking for hard imagination. It actually was kindergarten simple. The dollar amount of the US trade deficit with a particular country divided by the dollar amount of its exports to America as a percentage which is then halved, with a floor of 10%. No more. It is not tariffs other countries charge America. Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, for instance, has stated clearly that the country’s tariff on US goods is 5.6%, not 47%. All those big numbers and the reciprocal tariffs are another big-time Trump hyperbole.

Absolute nonsense really, but does it matter? Trump will as Trump wants. The Prince of our Disorder, although it would be a stretch to compare Trump with British intelligence officer T E Lawrence, now waits as countries run to his court — some like headless chickens, some not at all — to negotiate some kind of deal, giving in on some alleged non-tariff barrier, some regulatory requirement, even some domestic tax that applies to everyone from which he would like American companies exempted, like value added tax (see box articles on a selection of countries and their responses to Trump’s bullying).

It’s difficult to be high and mighty. Trump’s slew of tariffs promises to cause economic pain and damage. Asean countries have been hardest hit. None would take comfort that even the penguins in two unpopulated Antarctic islands have been hit with a tariff.

Cambodia, Laos, Vietnam and Myanmar have been hit by tariffs ranging from 44% to 49%, at the highest levels of Trump’s tariffs. An administration official has intimated this has to do with their closeness to China. Apart from Vietnam, these are the poorest countries in Asean. Vietnam itself, apart from having a huge surplus of well over US$100 billion with the US, is seen as a conduit for Chinese exports through relocated investment.

It is being suggested that much of these investments might instead flow to the Philippines, Singapore, Malaysia and Indonesia. However, this is wishful thinking as the US is looking not just at geographical location of exports but its national ownership as well. Malaysia, which has had some benefit from Chinese investment relocation, knows all about this scrutiny.

There are various estimates of the potential economic losses from the contracted American market, which constitutes about 15% of global imports. While it may look like there is a lot of the world left, the direction of trade, its composition and its supply chains do not easily re-form. Then there is the question of how the rest of the world reorganises. It will take time. Meanwhile, there is the threat of the dumping of goods in other markets, giving rise to ill-feeling that could scupper much-needed global trade reorganisation. The EU-China relationship is a prime example of such animosity, which must be addressed in a new world, not just on trade, but also on investment and geopolitics.

Asean too could face the dumping of Chinese goods, which Malaysia and Indonesia already experience. The Malaysian International Chamber of Commerce and Industry forecasts about 50,000 job losses from the American tariffs and slower economic growth, which will be the case with every Asean country. Asean, however, has good relations with China and issues over dumping, even as there are job losses and slower growth, should not boil over.

Prime Minister Datuk Seri Anwar Ibrahim, including in his capacity as Asean chair, has made the right statements with respect to the so-called reciprocal tariffs. There is no point poking at the hornet’s nest. Malaysia and Asean should work out what can be achieved by talking to the American administration on the details of the tariffs even before the Asean Summit at the end of next month.

The upcoming meeting in Kuala Lumpur has become one of the most critical Asean summits. The foundation of Asean’s peace, stability and prosperity over the last 50 years is gone, not just the loss of global rules-based free trade and investment, but also the largely cooperative relationship between America and China. While trade and tariffs are all the rave just now, the other critical factor which Asean must not forget — and prepare for — is the possible rollback of American investment in the region as a result of pressure from Trump and the loss of the American market. It is often not realised that US investment in Asean is larger than that in China, India, Japan and South Korea combined. This is huge. There is a sea change about to take place. That summit next month is so important. It has to give instruction for various scenarios to be worked out by the Asean secretariat with assistance from business and academic institutions.

Asean does not need to get too worked up about whether to choose America or China. The choice has already been made — by Trump. Asean will just have to let it work through without any grandstanding. But to adjust it cannot avoid.

China will become the world power the region will have to most deal with. It should be accepted that every Great Power will carry the weight of its status and influence. The world has had over 70 years of American predominance. It is now going through the mad gasps, a painful final spell that might last perhaps longer than most would want, but will still historically be final.

Asean has good experience of engaging with China — with mutual benefit, particularly economically. How China would behave in the Asean neck of the woods will be different from America — it might be better, but will certainly not be perfect. Much depends on what happens over Taiwan. There is also the South China Sea issues over which Asean must seek to have a modus vivendi with China post-haste by joint reiteration of the 2002 Declaration of Conduct of Parties, and finalisation of the Code of Conduct, whether legally binding or not.

As for the tariff war, it is here to stay and the American market is closing. New markets have to be found, new supply chains formed, new and deeper relationships forged. Apart from the Gulf Cooperation Council + China, there is India and the rest of Asia, Latin America, Canada, Africa — and the EU, if it would play ball and not be transfixed with an America that has dumped it. The main thing is everyone else must not become protectionist.

China is by far Asean’s largest trading partner. The danger of the dumping of Chinese goods in Asean has to be managed in the fraught international trading environment. This will be an early test of the relationship with China looking ahead. When the going gets tough, will it just be the tough gets going, or will there be some kind of cooperative order to avoid further economic distress?

Trade with China obviously is critical. But there’s work to be done about deepening and developing relationships in new regions and constellations, be they BRICS or the still amorphous Global South.

As Asean chair, Malaysia had identified GCC+China as a grouping with which Asean should seek to deepen relations. This should be pursued with vigour, not just in terms of export markets, but also in terms of foreign investment. An American attack on Iran, however, will throw the Middle East into further disarray, what with Israel running riot and breaking every rule of law and order, with total American support.

Even if Trump had not pushed it along, the time has come to let go of the rank double standards and hypocrisy of the American-led global order — even if the economic prosperity will be missed.

Tan Sri Dr Munir Majid is chairman of CARI Asean Research and Advocacy

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