ASEAN-US Talks In KL Seen As 'Pressure Valve' Amid New Trump Tariffs - Analyst   

By Siti Radziah Hamzah

KUALA LUMPUR, July 10 (Bernama) -- The upcoming ASEAN-United States meeting in the Malaysian capital on Thursday is expected to serve as a useful ‘pressure valve’ following the newly imposed US tariffs on Malaysia and five other members of the 10-nation Association of Southeast Asian Nations (ASEAN).

SPI Asset Management managing partner Stephen Innes said that US Secretary of State Marco Rubio’s first official Asia visit offers a temporary diplomatic outlet to help ease tensions.

"It signals the US still sees ASEAN as more than a pawn in the China game. If ASEAN leaders present trade ties as mutual ballast against global volatility, it could help recalibrate tone, if not terms," he told Bernama in an interview.

Vietnam, Malaysia, and Thailand, he noted, are the most exposed to the new tariffs announced by President Donald Trump, given their deep integration into US-linked supply chains. Under the new measures, Malaysia will face a 25 per cent tariff.

"The tariff hikes, many jumping from near-zero to 10 per cent–25 per cent, are no longer pinpricks. They are blunt tools. The immediate impact is uncertainty - firms freeze expansion, and capital goes on standby. The real cost isn’t trade volume, it’s trade hesitation," he explained.

Trump’s trade tactics follow a familiar rhythm - “provoke, delay, extract” - and reflect a unilateral strategy based on "reciprocity" defined strictly on Washington’s terms.

"It is a power play, using tariffs less as policy and more as poker chips. ASEAN should treat US trade policy like weather - unpredictable, but not unmanageable.

“Diversify trade exposure, deepen intra-ASEAN linkages, and build redundancy into supply chains. Stay close to the US private sector as policy might be political, but profits still speak loudly," he said, adding that the market will price the tail risk quickly.

Looking towards the Aug 1 implementation date, Innes outlined three potential outcomes: another delay, selective application to preserve leverage without severe disruption, or full implementation, risking retaliation, regional fallout, and pressure on emerging markets.

Economist Geoffrey Williams said US engagement in ASEAN is likely to continue, driven by mutual economic interests and the need to revisit tariff decisions.

"I believe Senator Rubio will restate the US position and reassure ASEAN countries that a solution is still available until Aug 1. The best way for ASEAN to influence policy is to cooperate and be pragmatic by reducing tariffs and non-tariff trade barriers and allowing consumers and businesses to decide whether or not to buy US products," he said.

Trade volumes, he cautioned, could slump in the second half of 2025 due to front-loading earlier in the year but in the long term, there will be adjustments but likely trade normalisation, albeit with lower margins.

-- BERNAMA