The article discusses the significant impact of Donald Trump's tariffs on Southeast Asian economies. These tariffs, imposed despite the region's high trade dependence on the US, are causing widespread economic concern and potential political instability.
Southeast Asia, particularly ASEAN members, have exceptionally high trade-to-GDP ratios. The tariffs, calculated based on trade surpluses with the US, disproportionately affect countries with larger surpluses. This has led to significant economic shocks across the region, varying in intensity based on each country's trade dependency.
Many countries, anticipating a deal with Trump, have attempted appeasement, offering tariff reductions on US goods. However, Trump's trade advisor, Peter Navarro, maintains this is not a negotiation, but a response to trade imbalances.
The article highlights the potential for political ramifications. Southeast Asian governments have historically linked their political stability to economic growth fueled by globalization. The economic shock from the tariffs could destabilize this model, potentially mirroring the political upheaval seen during the 1997-98 Asian financial crisis.