Collins Chong Yew Keat, a security and global affairs analyst based in Universiti Malaya, Malaysia. Photo: Supplied
Speaking to Tuoi Tre News, international relations and strategic experts from ASEAN countries agreed that Trump’s tariff threat presents a ‘major storm,’ compelling many nations to tread carefully to ensure their economic goals remain on track.
Malaysia faces negotiation hurdles
According to Collins Chong Yew Keat, a security and global affairs analyst based in Universiti Malaya, Malaysia, the new tariffs announced by President Trump in a letter dated July 7 contradicts the Malaysian government’s previously optimistic statements over the past three months of negotiations.
According to Chong, the main reasons for the lack of progress are Washington’s concerns that Malaysia has tilted toward China, along with Malaysia being used as a transit point to bypass tariff impacts.
“There are structural and systemic flaws in the way we present our cases and perceive things differently from how President Trump does," he said.
"Unless and until we tackle the root causes, we’ll have to face the reality we’re being trapped in the ultimate power play between the U.S. on one side and the anti-U.S. system on the other side."
According to Chong, Malaysia has been moving very fast under the current administration to ensure an economic transition based on future-driven sectors such as digital economy, green economy, and new energy transition.
The U.S. remains the most important investment partner on this journey by providing capital and technology transfer to local firms, creating a high-skilled workforce and high-paying jobs.
“But all that will change with the new tariff in place,” the Malaysian expert stressed.
As such, until August 1, Malaysia will actively pursue negotiations to reduce tariffs to around 10-15 percent.
But Chong doubts Kuala Lumpur can finish in three weeks a job that could not be done in three months.
“I don't see what the next three weeks will bring to us unless we have a very serious, positive and direct counter offer that shows our true commitment in addressing U.S. concerns," Chong remarked.
"That includes limiting our affiliation and partnership to any other players that have a direct challenge on U.S. interests."
In his view, Malaysia’s best chance to demonstrate this commitment was at the freshly-finished ASEAN Foreign Ministers’ Meeting in Kuala Lumpur, where U.S. Secretary of State Marco Rubio attended sessions.
“For [Rubio] to choose Malaysia as his first Asian stop, even bypassing Japan and South Korea, means a lot," he added
"Malaysia must seize this opportunity to send a clear message to the U.S. that we deeply value our relationship, not just on behalf of ourselves, but also ASEAN - and to reaffirm the strategic importance of both Malaysia and ASEAN in the eyes of the Trump administration."
However, Chong also warned ASEAN to be cautious with any joint tariff-negotiating efforts.
If mishandled, such efforts could be seen as a regional power move against the U.S., potentially triggering more retaliatory measures.
Thailand fears recession
Like Malaysia, Thailand also received a letter from President Trump. It warned that Thailand would face a 36-percent tariff, the same rate announced back on April 2, unless an agreement is reached.
Professor Thitinan Pongsudhirak, director of the Institute for Science and International Security at Chulalongkorn University, said members of the Thai public were shocked and alarmed that the official tariff rate remains unchanged.
Professor Thitinan Pongsudhirak, director of the Institute for Science and International Security at Chulalongkorn University in Thailand. Photo: CWG SPEAKERS
This shock was partly exacerbated by public assurances from Thai negotiators that talks were going well.
Before Thai Finance Minister Pichai Chunhavajira traveled to Washington for direct talks with his U.S. counterpart Scott Bessent on July 1, Thai media had reported that the U.S. proposed reducing Thailand’s tariffs to 18 percent.
Throughout the negotiations, Pichai continued to express optimism about reaching a deal before the deadline.
According to Thitinan, if the tariffs are not lowered by August 1, Thailand’s export competitiveness compared to peer competitors can be undermined.
The heavy duties would dampen the nation’s economic growth and could usher in a recession in the second half of 2025.
This would be a severe blow, as the government had previously expressed confidence in achieving a 3-percent growth rate for the year.
“The economic doldrums could spill over into 2026 and February 2027, which is very bad news in view of Thailand's political morass and domestic instability,” Thitinan warned.
Vietnam makes a difference
Chong observed that over the past three months, most countries have been trying to paint a very rosy picture of how they still value the ties with the U.S. and how "they will do this and that."
However, few were turned into concrete actions.
As a result, almost no agreements have been announced.
Vietnam, however, has taken a different path.
“A different approach is being taken by Vietnam now, which is something I think Malaysia and the region can learn from," Chong reckoned.
"Vietnam realizes the significance of the U.S. market, not just in terms of the importance of its market, but in the overall long-term picture of how the U.S. plays a very deep role in the resilience of supply chains, technological investments in the new economic transition.
"Also, most importantly to me, it will be on defense and security partnerships."
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