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Trump: A Potential Storm For ASEAN

Image result for trumpASEAN is loomed by cloud of improbability as the inauguration of the 45th President of the United States draws nearer. As the world anxiously awaits for the president-elect’s foreign policy, it is now necessary for ASEAN to weigh the implications of Trump’s presidency to this region.

ASEAN has had a strong trade relationship with the U.S in the past. In fact, ASEAN was one of U.S. most successful foreign policy areas. Under Obama’s administration, U.S. became the first ASEAN dialogue partner to establish a permanent mission to the organization. Obama also hosted the first U.S. – ASEAN summit and brought four ASEAN members into the Trans Pacific Partnership (TPP) which could promote U.S. economic exchange in this region.


Now, the concern is on Trump’s economy and trade policies. The change in the policies will have indefinite impact on ASEAN’s economy in long term. Trump has voiced out his priority to the domestic economic policies that focus on positive developments for corporations such as tax reform or deregulation. He has firmly asserted his stance on protectionism. He claimed that decades of free-trade policies were responsible for the collapse of the American manufacturing industry. He was quoted saying that he would impose tariffs on 35% on Mexican imports and 45% on Chinese imports to protect American jobs from the unfair foreign competition. Companies that import those goods would have to pay for the tax at the border.

Although his targets are the main players, the relatively small players like ASEAN will not be spared. Asia is the world’s manufacturing hub and the nations in this region are export-dependent. Raising the trade barriers would put many countries at risk.  According Fitch Ratings’ report “Trump’s Election Raises Global Uncertainties: Trade, Foreign Policy Switches Could Have a Sizeable Impact” by global debt watcher, one-fifth of China’s exports go to U.S. and China is the largest trade partner for Asian exporters. Any form of disruption of trade between China and U.S. would have ramification on countries like Thailand and the Philippines that supply goods like electronic and automotive components to China.

Trump has also expressed his plan to issue a notification of intent to withdraw from TPP, the largest regional trade agreement in history signed by 12 countries covering 40% of the global economy. Under the TPP, Small Medium Enterprises (SMEs) receive support to export their products to overseas markets. The deal will also benefit raw material producers to connect with manufacturers and traders. Plus, TPP could potentially help to reduce poverty and improve human development through support to small producers.

ASEAN Matters

Whichever future policy the new U.S. president wants to pursue, it is important that he pays attention to the unique characteristics of the ASEAN-U.S. ties. There are reasons why Trump needs to pay attention to ASEAN:

  • ASEAN is a rising region. The community is growing, not only in terms of the young population but also in middle income group. Although the average income of the entire ASEAN may not match the EU, but it has positive growth. For example, Singapore has a higher annual income than all EU members with the exception of Luxembourg. Currently, ASEAN members have worked well together and it might add one or two more members in years to come.
  • ASEAN economies have contributed job growth. ASEAN is U.S. fourth largest trading partner, with steady GDP growth over the past 15 years. Besides creating jobs in this region, ASEAN has also created jobs for the Americans in goods and services. There are many restauranteurs and entrepreneurs are investing in the U.S.
  • ASEAN could assist the U.S. in combating terrorism. In response to the much-needed intra-ASEAN co-operation on terrorism, ASEAN leaders signed the Convention for Counter Terrorism in 2007. ASEAN could offer a platform for Trump to learn some of the good practices. There are effective de-radicalisation programmes from ASEAN that have been emulated elsewhere.

The prevailing change in the U.S. would have significant impacts on ASEAN. Hence, it is time for ASEAN members to come together and search for new common grounds. The countries need to stand together and forge a new future that is more integrated, more cohesive and less fragmented.



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Paul Conway
Paul Conway
My role as CEO is to take the business to the next stage of growth. I already have a fantastic and growing team. There are opportunities with payments, banking channels, additional software, cloud deployment and with over 300,000 customers in South East Asia and a publicly listed majority shareholder in Censof holdings, the opportunity and tools for growth are very real.

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