When the US administration under President Donald Trump announced sweeping import tariffs on ASEAN nations, it triggered an immediate ripple across Southeast Asia’s export-dependent economies. For Indonesia, Malaysia, and Singapore, all significant trading partners of the US, the policy shift prompted urgent government responses, recalibration of trade strategies, and reflections on the broader future of global economic alliances.

Indonesia seeks negotiation and market diversification

President Prabowo Subianto acknowledged the immediate vulnerability of Indonesia’s key sectors, particularly textiles, footwear, garments, and furniture, which are heavily labor-intensive and reliant on the US market. He admitted the tariffs would hit “hard,” especially given Indonesia’s historic loyalty to US-promoted global trade norms.

"We followed them, faithfully, from the '60s through the '90s," Prabowo said in a candid interview, expressing both frustration and realism, CNBC Indonesia quoted

Rather than retaliate, Indonesia took a diplomatic route. It proposed sending senior officials to Washington and emphasised collaboration with ASEAN neighbors. Prabowo pointed to Africa as an emerging export market, commending Indonesian conglomerates like Salim Group for leading the charge in diversifying sales.

Indonesia's 32% tariff rate places it mid-range among affected ASEAN nations. Analysts forecast potential job losses in manufacturing, and export volumes may contract short term. But the broader shift, pushing Indonesia to “stand on its own feet,” as Prabowo emphasised, could accelerate its long-pursued structural reforms and market diversification strategy.

President Prabowo Subianto acknowledged the significant impact of US tariffs on labor-intensive industries such as textiles, footwear, and furniture, CNBC Indonesia reported. Emphasising the need for resilience, he advocated for exploring new markets, particularly in Africa, to reduce dependence on traditional partners. Prabowo highlighted the success of Indonesian companies like Salim Group in penetrating African markets, suggesting a model for others to follow. 

Additionally, Indonesia announced trade concessions, including reducing import taxes on US goods like steel and health equipment, aiming to ease tensions and foster favorable negotiations. Finance Minister Sri Mulyani Indrawati also proposed adjusting the crude palm oil export tax to alleviate the burden on exporters. 

Malaysia to diversify trade partnerships and cautious engagement

Malaysia’s government, led by Prime Minister Anwar Ibrahim, expressed concern over the unexpected tariff announcement. With a 24% tariff rate, Malaysia faced a moderate hit, but being one of the US’s top ASEAN trade partners, the symbolic weight was substantial.

Minister Tengku Zafrul Aziz flagged possible hits to Malaysia’s GDP growth, with forecasts for 2025 already under review. Investors were warned about the ripple effect across supply chains, particularly in electronics, automotive, and commodities.

Malaysia refrained from retaliating but initiated high-level diplomatic engagements. As ASEAN chair in 2025, it called for a special ASEAN economic ministers’ meeting and began positioning itself as the region’s coordinator for a joint response.
A geo-economic command centre was set up to monitor trade policy shifts and steer strategy, while Malaysia eyed potential gains from being less penalised than neighbors like Vietnam (46%) and Cambodia (49%).

The government anticipates mixed effects: while some sectors may suffer from demand contraction, others, like palm oil and intermediate manufacturing goods, could benefit from the substitution effect. If leveraged correctly, Malaysia could emerge as a preferred supplier amid global trade realignments.

Prime Minister Anwar Ibrahim expressed objections to policies restricting free trade and emphasised the importance of diversifying Malaysia's trade relations, MalayMail reported. He highlighted efforts to expand networks with countries such as China, Russia, and Brazil, aiming to mitigate the impact of US tariffs. Anwar also noted the need for proactive steps to open a wider network of trading partners, acknowledging the uncertainties surrounding US tariff implementations. 

Minister of Investment, Trade, and Industry Tengku Zafrul Abdul Aziz indicated that while the full impact of US tariffs remains uncertain, Malaysia stands ready to capitalise on arising opportunities. He pointed out that Malaysia's neutral stance and robust economic fundamentals could attract investors seeking stable alternatives amid global trade tensions. 

Singapore expresses concern and emphasising regional solidarity

Singapore’s initial response was swift and direct. Prime Minister Lawrence Wong called the US tariffs a “seismic change” and warned that the rules of global trade were being rewritten. With a 10% tariff rate, the lowest among ASEAN nations, Singapore’s physical trade volume impact was expected to be limited but symbolically concerning.

The tariff, effective April 5, came with no prior bilateral consultation, reinforcing the growing unpredictability in international relations. Wong noted that global institutions were weakening, and the city-state must brace for continued external shocks.

Singapore did not pursue public negotiation but focused on regional solidarity, emphasising coordination with Malaysia and Indonesia. Wong reinforced the country’s commitment to building capabilities, strengthening partnerships with like-minded countries, and maintaining strategic clarity amid global uncertainty.

Singapore’s open economy means even modest tariff hikes can create outsized ripple effects, especially in logistics, electronics, and re-exports, The Straits Times reported. While the country has the fiscal room and institutional agility to absorb the shocks, its long-term strategy hinges on resilient supply chains and global trust — both increasingly fragile.

Overall economic implications

For Indonesia, the tariffs pose challenges to key export sectors, prompting a strategic pivot towards market diversification and policy adjustments to maintain export competitiveness.

Malaysia's approach reflects a balance between caution and proactive diversification, aiming to mitigate immediate impacts while positioning for long-term economic resilience.

Singapore's concerns highlight the broader implications of the tariffs on small, open economies heavily reliant on global trade, underscoring the need for regional cooperation and adaptive strategies.

90-Day pause

Meanwhile, with President Trump announcing a surprising 90-day suspension of the newly implemented reciprocal tariffs on much of the region it will take time for private business and governments across Southeast Asia to come together to coordinate a long-term response.

Trump characterised the pause as a strategic move, though in typical Trump style, some of his own officials were reportedly unaware of the decision until it was made public. Treasury Secretary Scott Bessent, who had lobbied for the move during a meeting at Mar-a-Lago, framed it as a calculated tactic to incentivise good-faith trade negotiations, while Commerce Secretary Howard Lutnick praised the effort as a message of American resolve.

Markets rallied on the announcement, with the Dow jumping nearly 3,000 points and the Nasdaq recording its second-best day ever. Despite this short-term optimism, economists remain wary, with analysts such as Joe Brusuelas warning that the pause does little to prevent an impending recession. Goldman Sachs lowered its recession forecast slightly but still sees a 45% risk within the next year.

Meanwhile, China responded defiantly, promising to "fight to the end" having been left out of pause announcements and denouncing the tariffs as harmful to global trade systems. Experts believe the standoff with China may deepen, and the temporary tariff relief leaves in place many of the structural uncertainties that have plagued businesses since Trump’s return to power.

In summary, while the US tariffs still present significant challenges to Southeast Asia, each country is adopting tailored strategies to navigate the evolving trade landscape, emphasising negotiation, diversification, and regional solidarity.