Asian Angle | How Asean can turn short-term tariff pain into long-term gain

The tariffs announced by US President Donald Trump on April 2, which ranged from 10 per cent to a staggering 49 per cent on Asean member states, have the potential to severely disrupt food trade, domestic production and the livelihoods of millions of smallholder farmers.

While the 90-day delay in implementing the “reciprocal” tariffs offers a reprieve, it has not alleviated the uncertainty surrounding trade with the United States, with price increases and shortages set to affect all consumers.

This uncertainty, however, could present an opportunity to transform the future of food trade in the Association of Southeast Asian Nations.

The Asean region is highly dependent on imports to meet demand for soybeans, corn and wheat. Data from the International Trade Centre shows that several members also have significant export volumes to the US, particularly Vietnam (seafood), Indonesia (palm oil), Thailand (rice and tropical fruits), the Philippines (coconut products) and Malaysia (palm oil and tropical fruits).

Ongoing discussions indicate that the situation remains fluid, and Asean leaders have wisely avoided knee-jerk reactions, opting for negotiation over reprisal. For Asean members such as Vietnam, which has a significant export market to the US, any reduction in exports caused by the tariffs would result in reduced revenue and diminished production needs.