Despite Trump’s red carpet visit, Washington holds a weak hand in Southeast Asia
Despite Trump’s red carpet visit, washington holds a weak hand in southeast asia
WRITTEN BY DR. HUNTER MARSTON
06 November 2025
During a two-day visit to Kuala Lumpur for the annual Association of Southeast Asian Nations (ASEAN) Summit, United States President Donald Trump presided over the signing of a peace deal he had sought between Cambodia and Thailand, following brief but intense border clashes over the summer. He also announced trade agreements with Cambodia, Malaysia, and Thailand. Despite these noteworthy deliverables, it may be too late for Washington to prevent the region’s wholesale efforts to de-risk itself from the US in light of Trump’s unilateral tariffs and erratic policy choices, which have prompted Southeast Asian heads of state to reconsider their alignment options.
Malaysia, the Chair of ASEAN for 2025, rolled out the red carpet for the American president, eager to set a positive tone for trade negotiations last weekend. Judging by Trump’s relaxed appearance and impromptu dance moves, the gesture succeeded. Malaysian Prime Minister Anwar Ibrahim and Trump appeared to enjoy good personal chemistry as well, sharing a ride in the president’s limousine in breach of security protocol. Anwar joked to reporters that Trump “was delighted to break the rules. We share lots of things in common. I was in prison, he almost got there”.
Ongoing trade negotiations continue to fuel uncertainty
Despite the apparent bonhomie and smoothness of the president’s trip overall, regional leaders remain anxious about the negative impact US tariffs are having on their countries’ economic growth prospects. The Asian Development Bank recently revised its 2025 growth forecast for the region from 4.7 per cent down to 4.3 per cent, pointing to a “new global trade environment, shaped by tariffs and updated trade agreements” as the main factor for slower growth.
With the Trump administration fixated on bilateral trade deals with individual countries, rather than the large multilateral trade deals that have shaped the region’s economic architecture in recent years, the US appears to be yesterday’s story, while Asia has moved on with the new rules of the road.
Compounding slowing growth is a recognition that various trade deals and agreements announced at the ASEAN Summit do not guarantee Southeast Asian countries’ protection from further Section 232 investigations relating to US national security. At the same time, Southeast Asian countries remain vulnerable to penalties associated with transshipments of Chinese goods, a term which is yet to be clearly defined. The Trump administration has threatened 40 per cent tariffs on countries found to be re-exporting Chinese goods such as solar panels, bicycles, or textiles.
The race for critical minerals
Lost in the news commentary covering events in Kuala Lumpur, which has largely focused on the trade deals announced, was the fact that the US and Malaysia took the significant step of upgrading their comprehensive partnership. Originally established during Barack Obama’s administration in 2014, it was upgraded to the level of comprehensive strategic partnership. The two sides also announced several deals, including an agreement that Malaysia would purchase up to USD 3.4 billion in American liquified natural gas (LNG) annually, 30 aircraft from Boeing, and roughly USD 150 billion in US semiconductors, aerospace equipment, and technology for data centers.
Kuala Lumpur and Washington also signed an MOU on critical minerals, though the details remain unclear. According to Reuters, Malaysia only agreed that it would not ban or restrict exports of critical minerals or rare earths to the US. Washington appears to be struggling to catch up to Beijing, which controls supply chains across most critical minerals given its refining capacity and first mover advantage over other contenders like US firms. China and Malaysia reportedly held talks in early October for a Chinese state-owned company to build a refinery in Malaysia to process rare earths.
While the US has a number of competitive advantages over China, for instance in producing advanced semiconductors, it is years or even decades behind China’s ability to process the raw materials that go into those products. Examples are gallium and germanium, exports of which China has restricted to the US. Washington is now trying to secure supply chains for these critical minerals as Beijing cuts deals with developing countries to dominate the market.
Southeast Asia seeks to de-risk from the United States
The Trump administration’s more unilateral America First policies risk fraying relations with many of the countries Washington hopes to court in order to access critical minerals and stimulate American manufacturing capacity with new investments. The quickest way for Southeast Asian nations to adjust their trade “imbalances” with the US is to make large purchases of US goods from American firms like Boeing or Nvidia. A number of ASEAN countries have announced plans to buy more American oil and gas, and to lower tariffs and non-tariff barriers on US exports. Thailand, for instance, pledged to purchase 80 US aircraft (worth USD 18.8 billion) and USD 5.4 billion in LNG and crude oil.
At the same time, the region is seeking to diversify trade and investment ties with other partners to “de-risk” from the US, fearing that ongoing uncertainty related to the US market will spell more economic pain in the future. Southeast Asian states gave up long ago on hopes that Washington would rejoin the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) or signal interest in joining other regional multilateral trade deals, such as the Regional Comprehensive Economic Partnership (RCEP) – both ASEAN-based trade agreements that include Japan, Australia, and a handful of other members.
With the US absent from these 21st century trade agreements, Southeast Asian states are not waiting around for someone else to set the rules and norms that will dictate the region’s future. They are also wary of China’s expanding economic dominance throughout the region. Thus, they have established new partnerships with Australia, the European Union, Canada, Japan, and New Zealand, among others, to offset reliance on either China or the US.
Has Washington lost Southeast Asia?
Surveys of regional opinion in recent years have seen a decline in US economic and political influence despite relatively stable demand for the US to play a greater role in the region. According to the Lowy Institute’s Southeast Asia Influence Index, China has been the most influential power in the region since 2017, largely owing to its dominant economic role, though it lags behind the US’ defense ties.
Over the course of the past decade and a half, since the Obama administration first announced its “pivot” to Asia, the US role in the region has become increasingly hollow, relying on the depth and breadth of its defense partnerships while letting economic strategy flounder. The American business community recognises Southeast Asia’s growing importance, massive markets, and promising demographics. But, without adequate finance and lending support for investments in the region, the US will continue to see its economic relevance wane.
Many American companies still view Southeast Asia as a relatively risky investment destination compared to their Chinese or Japanese counterparts, which enjoy more support from their national governments or the Asian Development Bank to finance projects. With the Trump administration fixated on bilateral trade deals with individual countries, rather than the large multilateral trade deals that have shaped the region’s economic architecture in recent years, the US appears to be yesterday’s story, while Asia has moved on with the new rules of the road.
President Trump may have stemmed some of the damage his administration’s America First policies have done to US influence in the region with his generally well-received visit to Kuala Lumpur over the weekend, but the bigger picture is more concerning. If the US cannot uphold the rules it once championed or at least offer an alternative, it will see itself a bit player and ultimately of less importance to Southeast Asia’s future.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent those of the 9DASHLINE.com platform.
Author biography
Dr. Hunter Marston is an Associate with 9DASHLINE and an Adjunct Fellow with the Southeast Asia Program at the Center for Strategic & International Studies. He holds a PhD in International Relations from the Australian National University. Image credit: Flickr/The White House (cropped).