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A deep‑dive conversation with Dr. Stewart Nixon on how ASEAN confronted one of the most aggressive U.S. tariff campaigns in history. We explore why the region’s unity cracked under pressure, how bilateral deals reshaped the landscape, and what ASEAN must prioritise to protect its economic sovereignty. Based on IDEAS’ latest report, this discussion examines the real risks, the surprising resilience, and the strategic path forward.
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00:00In other related news, 2025 was a turbulent year for ASEAN, shaken by some of the most
00:05aggressive U.S. tariffs ever imposed, with rates climbing as high as 49% on several member states,
00:12forcing the region into frantic negotiations and exposing deep cracks in ASEAN's unity
00:16under pressure. So today, we're joined by Dr. Stuart Nixon, Deputy Director of Research at
00:21IDES, whose paper, Divided With All, ASEAN's Respond to Trump's Illiberal Trade Agenda,
00:26published on 15 January 2026, offers one of the most comprehensive assessments of how
00:33the region navigated this chaotic moment. Dr. Stuart, thank you so much for taking the time
00:37to speak with us. Your report describes 2025 as a frantic and unprecedented year for tariffs
00:43under the Trump administration. So how would you summarize the key drivers behind the United
00:49States' illiberal and unusually aggressive trade agenda? And why did ASEAN end up in the crosshairs,
00:55Doctor? Yes, so thank you for having me. And to understand why, you really need to understand
01:02Trump himself. It's not economics. The trade deficits, the economics of trade deficits just
01:07has not made sense. It benefits the U.S. in some ways. It's not about politics. Trump's popularity
01:13is cratering in the U.S. And it's definitely not about foreign policy. He's annoying every country
01:19in the world, really. I mean, Trump's often accused of not having an ideology. But if there's one thing
01:27that's intrinsic to who he is, it's his belief that trade deficits are a sign of exploitation by
01:32foreign countries, and that tariffs are the way to resolve that. And trade deals are a way he can
01:40exercise power over less powerful countries. So why ASEAN? Obviously, ASEAN countries had some of the
01:48largest trade deficits at the end of 2024, start of 2025, and this all kicked off. Vietnam was,
01:55I think, the third largest trade deficit with the U.S., Thailand about 10th, Malaysia and Indonesia
02:01about 14th and 15th. Singapore is obviously an exception in this, having a trade surplus, but it was
02:07not immune to a baseline tariff of 10 percent. And as countries like Singapore and Philippines
02:14found out pretty quickly, having strong diplomatic and security ties with the United States counted
02:20for nothing under this negotiating framework. And we saw that ASEAN responded by condemning the
02:26tariffs, yet most member states still pursued bilateral talks with Washington. So why was ASEAN unable
02:32to negotiate as a unified bloc when it mattered the most, Doctor?
02:38Yeah, I mean, there's three reasons at least. So one is that exporters, the major exporters in ASEAN
02:43chose to act, chose to act in their own sort of self-preservation. Obviously, there's political
02:51imperatives domestically that come front of mind for ASEAN countries. And so they thought they needed to do
02:57the best deal for their exporters, for their businesses. Regardless of what has been the outcome,
03:04there was at least a perception that these deals could do better for business than not negotiating.
03:13I think there's a false logic to that, of course, and the report goes into some of the outcomes vis-a-vis
03:17the perceptions up front. And Vietnam and Cambodia in particular were incredibly quick out of the
03:25blocs to act and to offer pretty large concessions to the US before ASEAN had even been able to blink
03:32and come together. The second reason is Trump was just allowed to dictate terms. The whole negotiating
03:38process with any country or any bloc was done on his terms in his backyard, basically.
03:46But the third and perhaps the most critical reason, and the one more in ASEAN's control,
03:51is that institutional weakness. So ASEAN has long negotiated trade agreements collectively,
03:58but it kind of sits alongside bilateral negotiations and is not as strongly institutionalized as what
04:04you see in the EU, for example. The contrast between the two blocs approaches was quite stark,
04:13really, as in you had the major economies of Europe respond to Trump's overtures to have
04:18individual negotiations by saying, no, go talk to Brussels. So I think that's the key really here.
04:25ASEAN, as a default, felt like it should have to negotiate bilaterally, whereas for Europe,
04:34the default was a strong institutional framework for regional negotiations.
04:39That's an interesting perspective. But Doctor, in your paper as well, you note that the economy impact so far
04:44has been relatively limited. So does this mean ASEAN dodged the bullet or is this the real dangerous
04:51structural and longer term?
04:54Yeah, I mean, I don't think this is over. I think the bullet's still in the chamber,
04:59for want of a better metaphor. There's a lot of reasons for this. Like part of the story is
05:04the tariffs sort of flip-flopping, as in it's still going on. We don't know where the tariffs are going to
05:11settle. And it was only really August last year when substantively the reciprocal tariffs were
05:17bedded down. Part of it is bearing exceptions to major sectors. For Malaysia, for example,
05:23the trade agreement with the United States only covers about 40% of Malaysia's exports.
05:31Then another part of this is the front loading. We saw a dramatic escalation in exports to the US
05:38ahead of the tariffs. And another critical part, though, that doesn't get talked about enough is
05:43circumvention, as in the Trump administration is not putting a lot of resources into making sure
05:49the tariffs are well enforced. And it needs the cooperation of the countries that are being
05:54coerced by these tariffs. So there are opportunities for trade to continue just in a more informal way.
06:01And that mitigates some of the economic impacts. Also, trade shocks don't typically transmit
06:08immediately anyway. There are reasons for that. I mean, there's stockpiles of goods in markets anyway.
06:15There's also trade agreements that can have long-term pricing structures banked in.
06:21And yes, in theory, worse is yet to come, although it's anyone's guess on what sort of scale that is.
06:27And that's not necessarily a trade story. It's an investment or a financial story. So investment
06:33has been subdued and more or less in a bit of a freeze state as investors don't really know where
06:41to invest their money with all of the chaos around tariffs and perpetual sort of uncertainty of Trump's
06:48policies. So yeah, it's a finance story as well. We see potential jitters in markets alongside
06:57an AI bubble of some description. Maybe it's not. I'm not here to declare there is one.
07:03But yeah, I mean, thankfully, on this front, ASEAN is comparing relatively well. Investment's been
07:10holding up. So maybe ASEAN is well placed to weather the future storm, but definitely not over.
07:19Doctor, help us understand better by engaging in bilateral deals. Is ASEAN actually perhaps
07:24unintentionally legitimizing punitive tariffs and weakening the multilateral trading system
07:30it depends on? What are your thoughts? Yeah, very much so. Definitely not intentionally. I think
07:37all of these agreements attempted to safeguard the system and certainly the ART between Malaysia and
07:44the United States did seek to include some provisions that referred to and leveraged
07:51World Trade Organization processes. But ultimately, these are agreements done in haste, without
07:57consultation and missing certain provisions that are fundamental aspects of the bilateral deals that
08:05do bounce off the multilateral system. Most notably in the Malaysian case, it was the absence of dispute
08:11resolution clauses. So if disagreements between either businesses or governments or government to
08:20government occur under this agreement, there is no formal process for resolving that. And there's
08:25certainly no link into WTO processes to resolve that. Yeah, so I think fundamentally as well, it sort of
08:34diverts from the long established process of mutually beneficial trade agreements, trade agreements for
08:41economic development. This was an agreement done under pressure to reduce the trade deficit, which means less
08:47trade, not more trade. So ultimately, it goes against the multilateral system. And Trump's been very outspoken in
08:55recent times in withdrawing from UN systems and berating the World Trade Organization for a lot of
09:04other things it disagrees with. So looking forward, if another wave of protectionism hits, whether from the US or
09:11elsewhere, what must ASEAN do differently or prioritise to protect its economic sovereignty and relevance? And you propose in your paper a four-prone strategy for ASEAN in the report. So can you explain further on that, doctor?
09:25Yeah, absolutely. I mean, the report goes to lessons from what worked well and what didn't work well.
09:32And I think the four things we'd like to highlight are first and probably foremost to restore and deepen ASEAN centrality.
09:41Refocusing the energies that were dedicated to meeting with Washington to bring it back to the region. And do the same for regional partners and friends.
09:53Make deals, make deals, make deals, deepen cooperation. There's been longstanding sort of perception of ASEAN centrality within the region.
10:05But there hasn't necessarily been the institutional infrastructure to back it up. We talk about the regional comprehensive economic partnership,
10:12RCEP as a ready-made sort of platform for doing that. So building on the second leader summit that occurred late last year under Malaysia's ASEAN chairmanship is a good place to start.
10:24And to build some of those meetings and agendas below the RCEP leaders meeting would be a really good thing to do.
10:33The second sort of the four-pronged strategy is to emphasise and pursue mutually beneficial development partnerships for development.
10:42So that's going back to the idea that trade agreements are for economic advancement, mutually beneficial trade.
10:50So don't just do deals with the bully, do deals with countries that actually want to grow with you and have supportive economic exchange.
10:59A lot of that was already happening last year, as the report says.
11:04So alongside negotiating with Washington were negotiations with other countries, other blocs, both bilaterally and regionally.
11:11There's much more potential to accelerate those, just like there was great acceleration in the Washington deals.
11:21The third of the four-pronged strategy is to keep to the agreements and be ready to adapt.
11:27But that may come as a surprise, I guess, because myself and ideas have been very outspoken about the Malaysian deal in particular and how it's unfavourable.
11:40But I would say there's no benefit to poking the bear from here.
11:43There's no point to abandoning an agreement that you've signed.
11:46That just makes ASEAN countries look as disreputable as Washington right now.
11:55There are many reasons why these deals could fall over without ASEAN countries being the instigator for that.
12:03You just look at Greenland right now in the clips you showed before this.
12:06The European Union had a deal that secured a lower tariff rate than what ASEAN countries got individually.
12:15But now that deal's in jeopardy because Trump is raising tariffs on eight European countries, irrespective of Greenland.
12:25And then the fourth and final is to recognise that this is just not over and to prepare better.
12:30So I talked about the institutional differences with Europe earlier and opportunities to deepen that.
12:37Part of that is to have more clear processes for crisis planning and response to get around some of the shortfalls of consensus-based decision-making that can be a bit slow, not agile enough.
12:52All right, so basically, to sum this up, even under intense pressure, ASEAN has shown it can adapt diversifying partners by stabilising impacts
13:00and laying the groundwork for a stronger, more resilient regional response.
13:04And with the right strategy, the next wave of protectionism could be a catalyst, not a crisis.
13:08So thank you to Dr. Stewart Nixon, the Deputy Director of Research Ideas, for your insights and time spent with us, Niagawani.
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