U.S.-China Tensions Cast Long Shadow Over ASEAN Summit

Joshua Kurlantzick is senior fellow for Southeast Asia and South Asia at the Council on Foreign Relations.

When the ten leaders of the countries in the Association of Southeast Asian Nations (ASEAN) gather in Malaysia next week for their annual summit, the organization will address its challenges head-on at one of the only times when a large number of reporters cover the regional trading bloc. Like all major ASEAN meetings, the summit will, of course, end with promises of greater regional collaboration and a set of shared goals in many policy areas. But in an age of ASEAN struggles and internal divisions, tellingly, the leaders in attendance will not release a final joint statement, according to Malaysian Foreign Minister Mohamad Hasan. 

There will still be some notable activity, however. During the summit, ASEAN will formally admit its eleventh member, Timor Leste, and it will probably announce the final steps on a new digital framework. It will serve a central role in a meeting of countries in the massive Regional Comprehensive Economic Partnership (RCEP) trade deal, the largest in the world, and then will be the venue for the broader East Asia Summit, which President Donald Trump will attend.

But ASEAN’s limitations remain clear. Wars in Southeast Asia have spread beyond strife-torn Myanmar this year, and ASEAN has continued to reflect its weakness in mediating conflict that continue to harm the entire region and the world. As civil war continues to rage in Myanmar, its collapse as a state has negatively affected its neighbors. It has become a hub of organized crime and has spread disease and refugees into Thailand and beyond. Another two members of ASEAN, Cambodia and Thailand, battled each other this past summer over a disputed border area until pushed to stop by China and the United States. Trump will attend the summit to preside over the Thai-Cambodian ceasefire signing ceremony. 

ASEAN’s chair, Malaysia, planned a significant role in the ceasefire as well—not because of the organization, but rather because of Malaysian Prime Minister Anwar Ibrahim’s influence over Cambodian and Thai leaders. Anwar has a level of personal ties that helped broker the border conflict’s end; he and his personal staff worked with the United States, Cambodia, China, and Thailand, and they made no effort to use ASEAN officials in a serious way to come to a ceasefire. 

The organization has struggled, broadly, to remain regionally relevant as Southeast Asian states have found it harder to avoid U.S.-China tensions. In addition, both Trump and his predecessor, Joe Biden, have placed greater weight on using the Quad as a regional strategic force—and none of these Southeast Asian states belong to the Quad. 

Beyond its own internal conflicts, ASEAN has no coherent approach as it is caught in the middle of international tensions. Normally reluctant to show they are picking sides between giants (with some exceptions, such as the Philippines or Laos leaning toward the United States or China), Southeast Asian countries have been pushed by the two superpowers to abandon this premise. China’s activities in the South China Sea—along with its close ties with many mainland states in ASEAN—have driven a wedge in the organization, making it all but impossible for ASEAN to collectively do anything related to China’s increasingly aggressive behavior. 

Economically, the bloc, which had played a central role in East Asian integration including the creation of RCEP, has become less consequential as regional free trade expansion has given way to growing protectionism around the world, including from the two biggest economies. ASEAN’s role as the center of trade liberalization—its major focus for decades—has become much harder under shifts to U.S.-Southeast Asian tariff deals and China’s growing controls on some of its exports. The U.S-China trade war, overall, has dominated the entire global economy. It has become such a focus that, while Trump is planning to attend the East Asia Summit, the world is primarily focused on whether he will meet directly with Chinese leader Xi Jinping during his trip—which seems increasingly likely. 

ASEAN countries also have made promises to both superpowers that could put off near-term problems but are hard to keep. This situation is likely to anger either Washington or Beijing. The White House’s use of reciprocal tariff threats, its trade leverage over Southeast Asian states, and each major regional exporter’s desire to cut a deal caused all ASEAN countries to make their own agreements with Washington last summer. These deals tried to avoid the worst possible effects for each country in the short term, but they lack longer-term vision from any of the major Southeast Asian states.  

They made these deals with no coordination at all, even though their leaders often talk of the need to work together on major regional challenges, or to work through ASEAN on economic and trade issues. Instead, the each-country-for-themselves approach to the tariff deals demonstrated that there is no unity in ASEAN in the face of hard economic challenges. 

What’s more, these deals’ provisions on transshipped goods, most of which would come from China, pushed ASEAN countries into becoming part of the United States’ global efforts to wall off Chinese exports—at least on paper. In reality, ASEAN remains economically dependent on China, and these countries will probably be unable or unwilling to play the role the White House wants. 

The tariff measures also likely will reduce growth among the region’s major exporters, and they are unpopular with the Southeast Asian public. In Malaysia, for instance, Bloomberg recently reported that the country’s exports did not meet expectations due to the U.S. tariffs that began in August, as the levies negatively affected the trade between Malaysia and the United States. While Malaysia’s Investment, Trade, and Industry Ministry reported that exports rose 1.9 percent in August compared to a year earlier, Bloomberg notes that this is “lower than the 3 percent median estimate” it had in a survey, and the decline reflects that U.S. shipments “fell 16.7 percent year on year, while imports declined 36.7 percent. Trade with its major trading partner slumped by 25 percent.” 

In Thailand, another major exporter, exports to the United States are projected to contract by 12.7 percent, with several key sectors—automobiles, electronics, and food products, including both agricultural and meat products—particularly vulnerable to decline, according to the United Nations Development Program. 

And yet, while these countries made agreements with the White House that to some extent target and punish Chinese transshipped goods, ASEAN probably will announce an expanded trade agreement with China at its summit—the ASEAN-China Free Trade Area Version 3.0. As Malaysian Foreign Minister Foreign Minister Mohamad notes, according to the New Straits Times, the agreement would streamline and ease trade between China and ASEAN nations. “We want all ASEAN nations to have the same trade terms with China. We don’t want a situation where one country can get this and another that,” he said at a press conference. 

Unfortunately for ASEAN, while the 3.0 version of the trade deal will almost surely go through, a vision of ASEAN states collaborating on the biggest economic or regional strategic issues still seems like a fantasy.

This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy.