US Tariffs Murder ASEAN Trade Order; New Cold War Dawns
The rules-based global order isn’t dying; it’s being murdered — slowly, deliberately, and perhaps irrevocably. Anwar Ibrahim, Malaysia’s Prime Minister, didn’t use such stark language at the ASEAN Foreign Ministers' meeting in Kuala Lumpur, but his assessment amounted to a chilling obituary. The Panglossian vision of globalization, where open trade knitted nations into a peaceful, prosperous whole, now rings hollow. What has emerged is a brutal realism: weaponized interdependence, where economic ties become tools of coercion, and trade, once a rising tide, transforms into a geopolitical battleground. Khaosod reports Anwar’s bluntness: “Tools once used to generate growth are now wielded to pressure, isolate and contain.” This isn’t just about economics; it’s about power.
The immediate trigger is the specter of renewed U. S. tariffs against fourteen countries, including six ASEAN members, slated to detonate on August 1st. The return of Trump has resurrected a policy of unilateral economic aggression, threatening to unravel established regional trade relationships. While Vietnam, leveraging its strategic importance, managed to negotiate a tariff reduction, the rest of ASEAN faces a far bleaker horizon. Thailand and Cambodia could be hit with tariffs of 36%, Indonesia with 32%. These aren’t mere market corrections; they are potentially crippling blows to their economies. But to see these tariffs as isolated incidents is to miss the forest for the trees.
This is a systemic shift. For decades, the U. S. championed free trade—selectively, opportunistically—using its economic leverage to shape the international system in its image. Consider the post-World War II Bretton Woods institutions, or the aggressive push for China’s WTO accession in the 2000s, both driven by the U. S. with the promise of shared prosperity and, crucially, with America at the helm. Now, the same toolkit is being repurposed, wielded not for global integration, but to preserve U. S. dominance in a world where its relative power is undeniably waning. The danger lies not just in the immediate economic impact, but in the corrosion of the underlying principles of globalization.
“ASEAN must be among those who choose to stand for rules, even when others choose retreat,” Anwar said.
The rise of weaponized trade exposes a fundamental contradiction at the heart of globalization. The benefits have always been skewed, with multinational corporations and powerful nations reaping the lion’s share while others are left struggling. As Dani Rodrik, the Harvard economist, has forcefully argued, hyper-globalization has hollowed out national sovereignty, exacerbated inequality, and fueled a populist backlash against free trade and international institutions — a backlash now finding expression in policies that prioritize national interests, often at the expense of multilateral cooperation. This isn’t simply a pendulum swing; it’s a fracturing.
The long-term consequences are profound. If the U. S., once the architect and enforcer of the global trade order, is now actively undermining it, who will step into the vacuum? China clearly harbors ambitions to reshape the global system, but its model of state-directed capitalism, coupled with authoritarian governance, offers a deeply unattractive alternative for many. We are entering a multipolar world, characterized by competing spheres of influence, where regional blocs like ASEAN must navigate treacherous geopolitical waters and chart their own independent courses.
The challenge for ASEAN is to forge a unified front and leverage its collective bargaining power. But unity remains elusive, hampered by internal conflicts, such as the ongoing civil war in Myanmar, and lingering bilateral disputes, exemplified by historical tensions between Thailand and Cambodia. As ASEAN navigates this “new weather of our time,” its success will determine its role in a world that is rapidly abandoning the pretense of a rules-based order, and hurtling towards a more fragmented, and decidedly more dangerous, future. The question isn’t just whether the old order is dead, but what — if anything — will replace it, and whether that replacement will be any better.
