ASEAN under pressure from US tariff war. EU and ASEAN markets tighten cooperation

By Marek Grzybowski

ASEAN economies will be seriously affected by restrictions caused by the increase in export burdens after the introduction of tariffs by the US. Virtually all members of the Association of South-East Asian Nations have been hit hard by the high tariffs imposed by the Donald Trump administration. Some goods from this region may reach EU countries through European seaports. There are already turmoil in ports and on sea routes.

Deliveries of some items to the US have decreased, and increased to countries not covered by restrictions. ASEAN is focusing on the development of production logistics between the countries of the organization, which will increase the turnover of container terminals in these countries. ASEAN will seek new sales markets and EU markets may be attractive. All the more so because the European Union agreed on the scope of broad cooperation with ASEAN countries a year ago.

Among Vietnam’s trading partners, the United States ranked second in 2024 with a total trade value of $134.6 billion, up 21.5% from 2023. The EU market reached $68.8 billion in the same year. The United States is Thailand’s largest export market, accounting for 18.3% of total exports in 2024, up significantly from 12.7% in 2019. The EU was Thailand’s fourth largest trading partner in 2024 with a trade volume of $43.5 billion. This accounted for 7.17% of Thailand’s global trade. The EU and Thailand are actively negotiating a free trade agreement (FTA) to boost trade and investment. The deal is expected to be finalized by 2025.

The new tariffs on goods imported by Americans from ASEAN (Association of Southeast Asian Nations) countries range from 10% to 49%, depending on the country. In recent weeks, members have responded in different ways and with subtle nuances due to the different nature of their relationships with the U.S. Overall, they have been cautious and pragmatic so as not to disrupt the stability and ongoing engagement with the U.S.

Source:  China’s Admin of Customs & US BEA., Infografika: Tony Norfield

ASEAN with a surplus
In 2024, ASEAN countries achieved a high value of trade with the US, reaching a combined trade value of USD 326.5 billion. ASEAN countries achieved a trade surplus of USD 71 billion last year, which was clearly visible in the turnover of these countries’ commercial ports.

For example, Vietnam’s port cargo volume increased by 14% in 2024 – reports the Vietnam News Agency (VNS), citing the Vietnam Maritime Administration. The total cargo volume in Vietnam’s seaports reached about 864.4 million tons in 2024. Transshipment of container terminals was estimated at 29.9 million TEU, which means an increase of 21%.

Źródło: Nikkei Asia, 2025

Vietnam Maritime Corporation (VIMC) handled 145 million tons of cargo in its port terminals. This is an increase of 126% compared to 2023. The volume of containers increased to 6.2 million TEU, an increase of 127% compared to the previous year. The Port of Hai Phong alone handled almost 40 million tons in 2024, and the net income from sales and services reached almost 2.6 trillion Vietnamese dong (103.2 million USD), reports VNS/VNA.

ASEAN countries have reacted differently to the potential blow from the US. Any disruption would harm their economies, says Kavi Chongkittavorn, who specializes in economic analysis of the region. In ASEAN-US relations, not only trade is important, but also investor relations. In 2023, US direct investment in ASEAN reached 75 billion USD. The Americans focused on the development of financial services, professional services and located high-tech production here.

Source: GeopoliticalFutures.com

US vs. China Investment and Trade
The US was the largest investor in the ASEAN region in 2024. China’s direct investment in ASEAN countries reached US$25.12 billion in 2023, up 34.7% year-on-year.
This investment flow had a significant impact on various sectors of ASEAN economies. A significant portion of China’s foreign direct investment in ASEAN went to the manufacturing sector, reaching US$9.1 billion in 2023.

ASEAN will become China’s largest trading partner in the first quarter of 2025, the State Council Information Office (SCIO) recently reported. The region accounted for 16.6% of China’s total foreign trade, with imports and exports totaling 1.71 trillion yuan ($234.21 billion), up 7.1% year-on-year.

Source: State Counsil Information Office, 2025

ASEAN leaders are trying to save the situation. Since February, the ASEAN Secretariat and the ASEAN High-Level Task Force on Economic Integration have been looking for solutions to strengthen cooperation between the organization’s members in high-value sectors, such as professional services and high-tech sectors. The aim is to find solutions that will make the highly developed logistics networks of production more resilient. The best forms of cooperation with trading partners, including entrepreneurs from the US, are being sought. A series of meetings were held in February.

The meeting in February led to the initiation of cooperation under the name of the ASEAN-USA Strategic Trade and Investment Partnership (STIP). This agreement will promote cooperation in the field of agricultural trade, digital services, professional mobility and mutual recognition of standards. It is a similar arrangement of activities to the one developed a year ago with the EU.

The 24th EU-ASEAN Ministerial Meeting was held in Brussels on 2 February 2024. Agreement was reached in key areas of cooperation between the EU and ASEAN, such as trade development, with particular emphasis on environmental initiatives, digital transformation and the establishment of secure supply chains. The EU has pledged €10 billion for cooperation projects under the Global Gateway initiative.

Source: Nikkei Asia, 2025

ASEAN on two tracks
ASEAN countries are currently focusing on a two-track supply chain. The first is to focus on improving logistics and customs, and prioritize high-value sectors such as semiconductors and pharmaceuticals. The second set of measures aims to transform ASEAN into a “tariff-free assembly zone” based on existing regional free trade agreements that allow U.S. companies to invest, Chongkittavorn explains.
Several countries, including Singapore, Vietnam, Indonesia and the Philippines, have reached out to the Trump administration for further negotiations. Thailand has already sent “Team Thailand” led by Vice Prime Minister and Finance Minister Pichai Chunhavajir and Commerce Minister Pichai Naripthaphan to Washington. The government’s task force has already prepared a checklist of things to do to reduce the 36% tariff on U.S. imports.
The country’s cooperation with the U.S. is crucial for seaports. The Port Authority of Thailand (PAT) reported revenue of 16.75 billion baht for fiscal 2024, up 1 billion baht from the previous fiscal year. PAT posted a profit of 7.47 billion baht this fiscal year, up from 6.66 billion baht year-on-year. This allowed the authority to contribute a total of 5.85 billion baht to the state treasury. PAT said that the Laem Chabang port in Chonburi province alone recorded container shipments of 9.46 million TEU in fiscal 2024, up from 8.67 million TEU in the previous fiscal year.

Source: VietnamPlus, 2025

Thailand and Vietnam – course towards a balanced balance
Pichai said that Thailand’s negotiation strategy will focus on supporting cooperation with the United States in order to achieve mutually beneficial results. Thailand aims to balance bilateral trade relations, taking into account the significant trade surplus with the US. It exceeds $40 billion. Thailand plans to increase imports from the US without reducing exports.

First of all, a long-term agreement was signed for the purchase of LNG. Deliveries are to begin in 2026. This agreement covers more than one million tons of LNG per year, worth about $500 million. It is also planned to reduce the imbalance in the trade balance over 10 years by increasing imports of cars, weapons, agricultural products, electronics and LNG.
Recall that Thailand was the first Asian country to establish relations with the US in 1818. The countries signed their first trade treaty in 1833. At that time, the Thai government granted the US numerous privileges that are still in force today.
At the end of April this year, the Vietnamese authorities took a similar rescue action. Vietnam started trade talks with the US to reduce the 46% tariffs imposed by the US – reports Phuong Nguyen from Reuters, citing state sources. Nguyen Hong Dien, the Minister of Trade of Vietnam spoke by phone with Jamieson Greer, the US Trade Representative last week.

According to the latest information, the United States has suspended the imposition of 46% mutual tariffs on Vietnam until July this year. If they are applied, they could actually slow down the economic growth in Vietnam, which is based on exports. And the main export market is the United States. The consequence of the economic slowdown may be the withdrawal of foreign investors in the production sector.
– Vietnam is ready to address existing problems based on mutual interests – quoted Nguyen Hong Dien as saying by Vietnam Television. Vietnam hopes that the American side will accept the expectations of Vietnamese negotiators. Prime Minister Pham Minh Chinh on Tuesday ordered officials to combat trade fraud, counterfeiting and other issues of concern to the United States, Phuong Nguyen reported, Reuters.

It is likely that many of the facilitations in trade between the US and ASEAN will be resolved. However, after the first months of 2025, it is clear that entrepreneurs and investors from China are quickly filling the gaps in trade relations in the Pacific. It is likely that as a result of the tariff policy on the supply side in the ASEAN region, there will be an oversupply of many product groups. This will probably be felt in the European Union market and in European ports.