Southeast Asian nations have been hit hard by the sweeping reciprocal tariffs announced by the Trump administration on Wednesday, which threaten to damage the region’s manufacturing industries and undermine U.S. influence in the region.
The stunning array of tariffs, announced by U.S. President Donald Trump at the White House late Wednesday in what the American leader had billed as “Liberation Day,” included a baseline 10 percent tariff on all nations. A higher reciprocal tariff has then been imposed on roughly 60 other nations with which the U.S. has the largest trade deficits.
“Today, President Donald J. Trump declared that foreign trade and economic practices have created a national emergency, and his order imposes responsive tariffs to strengthen the international economic position of the United States and protect American workers,” the White House said in a statement.
It added, “These tariffs are central to President Trump’s plan to reverse the economic damage left by President Biden and put America on a path to a new golden age.”
According to a list of tariffs released by the White House, which appear to include the 10 percent baseline tariff, three Southeast Asian nations were among the hardest hit nations in the world: Cambodia, which was slapped with a 49 percent tariff, Laos (48 percent), and Vietnam (46 percent).
Myanmar, which is subject to layers of U.S. sanctions and currently conducts minuscule amounts of trade with the U.S., will be subject to a 44 percent tariff. It was followed by Thailand (36 percent), Indonesia (32 percent), Brunei (24 percent), and Malaysia (24 percent). The nations that got off most lightly were the Philippines (17 percent), Timor-Leste (10 percent), and Singapore (10 percent). The latter two are the only Southeast Asian nations that currently run a trade surplus with the U.S.
The tariff list also included what the administration claimed were the total tariff rates that each foreign nation had imposed on the United States, “including currency manipulations and trade barriers.” For instance, Vietnam has been accused of imposing an effective tariff rate of 90 percent on U.S. imports, followed by Thailand (72 percent), Indonesia (63 percent), Malaysia (47 percent), and so forth.
However, there are strong indications that these figures have been basically made up.
As numerous observers have already noted, the tariffs that the administration claims have been imposed on U.S. goods correspond to the nations’ current trade surplus with the United States, expressed as a percentage of these nations’ total exports to the U.S. This is true of the figures for all nine of the Southeast Asian nations that have been subjected to reciprocal tariffs, as well as seemingly every other nation that falls into this category. (The White House later appeared to confirm this.)
The fact that the administration has passed this off as a “tariff” rate, and then used this as the basis for the imposition of so-called reciprocal tariffs on other nations – in most cases the latter seems to have been calculated simply by halving the former – is a sign of spectacular mendacity and incompetence. As Mike Bird of The Economist noted on X, the fraudulent way that the tariffs were calculated is “almost a worse signal than the tariffs themselves.”
Perhaps one shouldn’t be surprised. The Trump trade policy has always been more political than economic: an attempt to communicate strength and resolve to the U.S. electorate (even as the looming trade war portends higher prices for U.S. consumers) and to strongarm partners into further opening their markets to U.S. goods. As the White House said in its statement on the tariffs, “The United States will no longer put itself last on matters of international trade in exchange for empty promises. Reciprocal tariffs are a big part of why Americans voted for President Trump.”
Needless to say, if imposed, these essentially arbitrary tariffs could have devastating impacts on the manufacturing industries in many Southeast Asian nations. Among the most vulnerable is Vietnam. The U.S. is the main destination for Vietnamese goods, and its goods exports to the United States last year accounted for 29 percent of its total exports and 30 percent of its GDP.
Vietnam has long been in the crosshairs of Trump’s team due to its massive $123.5 billion trade surplus with the U.S., which grew by nearly a fifth in 2024. This is currently the third-largest in the world, behind the surpluses enjoyed by China and Mexico. At the same time, Vietnam has become an increasingly close strategic partner of the U.S., and Vietnamese officials had made assiduous efforts to preempt the Trump administration’s likely concerns about the trade imbalance. It is therefore hard to avoid the conclusion that the imposition of a 46 percent tariff will undermine hard-won bilateral trust and suck much of the content out of the Comprehensive Strategic Partnership that was established with great fanfare in 2023.
According to one Vietnamese observer, the initial reaction among Vietnamese social media users, including government officials, has been one of “great sadness and disappointment.” Taking such a step days before Chinese leader Xi Jinping is set to visit Vietnam is “a geopolitical own goal,” Khang Vu, a regular contributor to The Diplomat, wrote on X.
The 49 percent U.S. tariff on Cambodia could also have a significant effect on the country’s nascent manufacturing industry. The country last year exported $9.91 billion worth of goods to the U.S., around 37 percent of its total, according to Cambodian government figures. Mass layoffs in the Cambodian apparel and garment manufacturing sector, should they eventuate, could well result in widespread hardship and potentially political unrest. The U.S. is also Thailand’s largest trading partner.
Of course, whether these tariffs are actually imposed at their current levels remains to be seen. These figures are perhaps best seen as an opening negotiating position, which will be used to bring foreign governments to the negotiating table where they will be forced to make significant concessions to U.S. economic interests.
The notion that this will pan out in Southeast Asia, where China, which was also hit with a 34 percent reciprocal tariff (on top of the 20 percent already imposed) is now the preeminent economic power, is a risky bet.
Even if Asia nations manage to negotiate down the tariffs, Trump’s “Liberation Day” appears to mark Washington’s final retreat from the principle of free trade in a region where the U.S. is already absent from the largest multilateral trade blocs: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), from which Trump withdrew the U.S. in 2017, and the Regional Comprehensive Economic Partnership (RCEP). While the U.S. will no doubt continue to remain a prominent security presence in the region, any reduction in the U.S. economic influence in the region is likely to undermine its influence more broadly and burnish China’s image as a steadfast and predictable economic partner.
“The U.S. is pretty much done strategically in Southeast Asia,” Evan Feigenbaum, formerly of the Carnegie Endowment for International Peace, wrote on X after the announcement of the tariffs. “The region is filled with pragmatists, who can and do navigate all kinds of crazy stuff from outside powers. But that depends greatly on those players being either principled or strategic – and Washington is now neither.”
Certainly, when China’s leader Xi visits Malaysia, Vietnam, and Cambodia later this month, it is clear what will be at the top of his agenda.