Malaysia calls for stronger inter-ASEAN trade amid tariffs uncertainty

Malaysia’s Prime Minister Anwar Ibrahim has called on Southeast Asian nations to deepen regional cooperation and boost intra-regional trade as the world faces increasing economic uncertainty.

Speaking at a meeting of ASEAN foreign ministers in Kuala Lumpur, Anwar warned against the growing use of tariffs, export controls, and investment barriers, describing them as tools of geopolitical rivalry though he avoided directly naming the United States.

"As external pressures intensify, it is essential that we strengthen our internal foundations", Anwar said. "We must trade more with each other, invest in one another, and push for deeper integration with determination".

His remarks come amid renewed concerns following U.S. President Donald Trump's announcement of new tariffs ranging from 25% to 40% on six ASEAN countries. Despite some members' attempts to negotiate reduced rates, only Vietnam has secured a partial reprieve, with its tariff reduced to 20% from an initial 46%. Other nations, including Indonesia, Thailand, and Malaysia, are pursuing further negotiations ahead of the tariffs’ implementation on 1 August.

ASEAN, the world's fifth-largest economic bloc, continues to benefit from supply chain shifts away from China. However, the latest U.S. measures have heightened unease in the region. A draft joint communiqué seen by Reuters reveals that ASEAN ministers plan to voice concern over escalating global trade tensions and the use of unilateral tariff actions, warning such moves are counterproductive and may worsen global economic fragmentation.

ASEAN leaders have pledged not to retaliate and to ensure any bilateral agreements with the U.S. do not harm fellow member states.

OCBC Bank economist Lavanya Venkateswaran noted additional uncertainty around enforcement of tariffs targeting transshipments, particularly affecting countries such as Vietnam that play a key role in regional supply chains.

Complicating matters further, President Trump has also hinted at additional tariffs targeting members or partners of the BRICS group, Indonesia being a full member, and Malaysia, Thailand, and Vietnam listed as partners.

Alongside trade concerns, ASEAN ministers are expected to reaffirm support for a Southeast Asia Nuclear Weapon-Free Zone treaty. The summit may also serve as a platform to ease recent tensions between Thailand and Cambodia, whose military standoff over a border dispute has added political strain. It's after Thailand's Prime Minister Paetongtarn Shinawatra was suspended pending a court case over a leaked phone call with Cambodia’s former leader Hun Sen, which critics say jeopardised Thailand's sovereignty.

The ASEAN gathering also faces unresolved regional challenges, including Myanmar's ongoing civil conflict and prolonged delays in finalising a code of conduct with China for the South China Sea.

Malaysia's Foreign Minister Mohamad Hasan urged all parties in Myanmar to foster a climate suitable for holding elections, although it remains unclear whether Malaysia, as ASEAN's current chair, will support the vote, widely seen as a ploy to legitimise military rule amid the absence of real opposition.

Copied