Southeast Asia rarely gets credit for strategic statecraft. To many, “ASEAN” sounds like a familiar frustration: consensus-driven, slow-moving, and heavy on declarations. Yet in the most severe shock to the trading system in three quarters of a century—the protectionist surge that followed the beginning of the second Trump administration—ASEAN has responded with a speed, discipline, and strategic clarity that many other groupings of countries, especially given ASEAN’s diversity, would struggle to match. If you are looking for an “unsung success” in today’s global economic disorder, ASEAN’s recent performance belongs near the top of the list.
Malaysia assumed the ASEAN chair as the global economy was drifting toward fragmentation. But the moment that defined the region’s test came on 2 April—“Liberation Day”—when the United States announced Tump’s so-called reciprocal tariffs. These measures, reportedly based on bilateral trade deficits, hit Asian economies particularly hard. For ASEAN members—highly trade-exposed, deeply embedded in global value chains, and dependent on the predictability of trade rules—the shock was not only commercial. It was a direct challenge to the rules-based order that underpins their development model and political stability in Asia
The smart choice ASEAN made: don’t retaliate—coordinate
At moments like this, the default political instinct in many countries is retaliation: answer tariffs with tariffs and show resolve to domestic audiences. That response can appear to build negotiation leverage. It’s an approach that might be emotionally satisfying, but one that’s economically dangerous—especially for small and mid-sized open economies that thrive in open, stable markets.
ASEAN’s most consequential decision was to do the opposite. Key leaders—among them the presidents and prime ministers of Indonesia, Malaysia, the Philippines, and Singapore—moved quickly toward a coordinated, non-retaliatory posture and a shared narrative: condemn unilateralism, reaffirm the commitment to multilateral rules, and deepen regional integration rather than join a spiral of protectionism.
This was not an obvious outcome. Southeast Asia has lived for some years now with the side-effects of US–China tension, including diverted trade and the steady relocation of manufacturing. Even before Liberation Day, Chinese goods shut out of the US market had appeared to be “flooding” into Southeast Asia, creating domestic pressure for governments to “protect” local producers. The new tariff regime risked turning that flood into a tsunami—raising the temptation for ASEAN members to respond individually with new barriers, safeguards, and ad hoc deals.
ASEAN’s achievement was to overcome the initial instinct to cut individual bilateral deals and to recognize that the biggest threat was not one tariff line or one sector, but the erosion of the rules and habits that keep the region open and investable. In other words: the danger was systemic. And the response had to be collective.
An institutional innovation that mattered: the Geoeconomic Taskforce
The most important and underappreciated part of ASEAN’s response was not rhetorical—it was institutional. In late February 2025, at the ASEAN Economic Ministers’ Retreat, ministers agreed to initiate a Track 1.5 Geoeconomic Taskforce to monitor external shocks and coordinate collective responses. This was a deliberate departure from business as usual. An Indonesian “non-paper” helped crystallize a practical agenda: reaffirm the WTO-centered trading system, avoid tariff retaliation or emulation, and—crucially—avoid beggar-thy-neighbour measures that shift pain onto ASEAN partners.
This kind of coordination sounds technical, but it is exactly what prevents such a crisis from turning into regional self-harm. When trade is diverted, and domestic politics demand action, the easiest path is unilateral measures that solve one country’s short-term problem while damaging neighbours and the region’s collective credibility. ASEAN’s taskforce created a mechanism for internal discipline: a forum for real-time information sharing, policy alignment, and the management of negative spillovers across the regional economy.
Malaysia and Indonesia co-chaired the taskforce and, in a notable first, connected it across ASEAN’s “pillars”—reporting not only to economic officials but also into the foreign ministry track. That cross-pillar coordination reflects the reality that is now widely recognised: economics and security are not and never were separate, but they are now entangled in a destabilizing way.
Prime Minister Anwar Ibrahim put this plainly at the ASEAN Foreign Ministers’ Meeting on 9 July, urging closer alignment between the foreign and economic policy tracks because “the challenges we face do not observe bureaucratic fiefdoms.” This is the language of a region treating geoeconomics as national security—without abandoning openness.
ASEAN also demonstrated something critics often say it lacks: speed. On 10 April—just over a week after Liberation Day—ASEAN economic ministers met to denounce the tariffs, reaffirm support for the multilateral trading system, and commit to deeper integration. In a world where market confidence can shifin mere days, timing matters. It signaled to investors, firms, and partners that ASEAN would not be pushed by bilateral bullying into chaotic, competitive protectionism.
ASEAN centrality as ballast: RCEP as the platform
ASEAN’s reaction was disciplined because the stakes are uniquely high. Southeast Asia’s integration into global value chains has produced large exports to the United States and, in some cases, sizeable trade surpluses that Washington now frames as unfair. Whatever one thinks of that framing, the material consequence is clear: ASEAN members were disproportionately targeted. And because their economies are highly trade-exposed—with average trade-to-GDP ratios exceeding 100 per cent—systemic disruption is a huge threat to jobs, growth, and political stability.
Modeling by the East Asian Bureau of Economic Research (EABER) and the Centre for Strategic and International Studies (CSIS) in Jakarta underscores this vulnerability. Under the Liberation Day tariffs, Southeast Asia’s GDP would fall by 2.3 per cent and employment by 5.9 per cent. With escalation of the trade war, the damage would be catastrophic. The lesson is not merely that “tariffs are bad.” It is that for trade-dependent regions, the breakdown of rules is an existential risk—and therefore a powerful incentive to collectively restrain a retreat from open trade.
Here is where ASEAN’s strategic creativity matters for the broader region and multilateral trading system. ASEAN is not trying to “replace” the United States, or to choose sides between great powers. Instead, it is doubling down on the architecture that keeps choices open: ASEAN-centered regionalism, anchored in rules and institutions.
The most important of these for ASEAN is the Regional Comprehensive Economic Partnership (RCEP). The EABER–CSIS modelling shows that if RCEP economies fully implement their commitments under RCEP and refrain from raising tariffs—even as global tariff contagion spreads—ASEAN would see growth rather than a collapse in trade and income. The difference between joining protectionist contagion and holding the line while implementing RCEP materially affects regional economic prospects.
For ASEAN and the broader East Asian region, RCEP is not simply a trade agreement. It is a stabilizing political arrangement and an important buffer against coercive economics. Days before Liberation Day, China, Japan and South Korea’s trade ministers cited RCEP as a basis for cooperation—an illustration of how ASEAN “centrality” also provides Northeast Asia with a workable avenue for keeping the region open.
RCEP’s scale—around 30 per cent of global GDP, population, and trade—means it has the global weight to project norms outward. If ASEAN and its partners use RCEP not only as a legal text but as a political device to push back against protectionism, it can connect to other coalitions of open traders, including the CPTPP economies and the European Union, without an unrealistic goal of merging agreements. The point is practical convergence: high-level alignment around rules, transparency, and a rejection of “might is right” economics.
Multilateralism as the “off ramp” from zero-sum pressure
ASEAN’s deeper contribution is philosophical as well as institutional. Its core principles—strategic neutrality, equal treatment, inclusion, and multilateralism—offer a way out of the false binaries that great-power rivalry imposes on others. In a world where “economic security” is increasingly invoked to justify pressure, exclusion, and coercion, ASEAN’s approach preserves policy space: countries can cooperate widely, diversify risks, and maintain open trade channels even in the midst of strategic competition.
ASEAN’s credibility depends on members demonstrating commitment to enforceable rules. Malaysia’s decision in May 2025 to join the WTO’s Multi-Party Interim Appeal Arbitration Arrangement (MPIA) is a significant example. The MPIA exists because the WTO Appellate Body has been paralysed by Washington’s veto on appointments to its Appellate Board since 2019; joining it is a choice to remain accountable to dispute settlement rules—and to hold others accountable when measures violate commitments. MPIA was initiated by Canada and the European Union. Japan and the Philippines joined the MPIA in 2024, alongside original signatories Australia, China, Singapore and New Zealand in East Asia.
Expanding MPIA participation within ASEAN—where many members have not yet joined—would be a practical step to strengthen the trading system’s rule-of-law function during a period of profound stress.
The hard part now: staying disciplined while cutting deals
None of this is to romanticize the challenges ahead. As punitive tariffs reshape incentives, many countries will be pulled into bilateral dealmaking with Washington. The key risk is that “solutions” negotiated under duress end up undermining the multilateral interests of the countries signing them—and damage their relationships with ASEAN neighbours and other major partners. ASEAN’s internal agreement to avoid beggar-thy-neighbour measures is a critical safeguard against such errors, but it will be tested.
Malaysia’s signing of an Agreement on Reciprocal Trade (ART) with the United States introduces trade diversion and—depending on interpretation—may constrain Malaysia’s freedom in choosing economic partners. This is precisely why ASEAN’s collective framework matters: it reduces the temptation for each member to pursue narrowly defined relief at the expense of regional collective interests.
A second test is institutional continuity. The Geoeconomic Taskforce produced a report at the end of 2025 with recommendations for ASEAN coordination. The question now is whether the taskforce becomes a standing capability—an institutional bridge between economics and security—or fades as attention shifts. The next crisis will not wait for ASEAN to reinvent coordination from scratch.
