The Indonesian government views the recent U.S. tariffs as a “wake-up call” to enhance intra-ASEAN trade. Finance Minister Sri Mulyani Indrawati highlighted that the proposed tariffs could reduce Indonesia’s economic growth by 0.3 to 0.5 percentage points. In response, Indonesia plans to implement measures such as deregulation, tax cuts, and relaxed import policies to mitigate the impact and strengthen regional economic resilience.
ASEAN member states are collectively addressing the challenges posed by U.S. trade policies. Malaysia’s Foreign Minister Mohamad Hasan announced plans for a summit with the United States to present the region’s concerns regarding the proposed tariffs, which include a 25% levy on automotive, semiconductor, and pharmaceutical imports. This initiative aims to ensure that the tariffs do not unduly burden ASEAN economies.
The broader ASEAN region is also taking steps to bolster economic integration and resilience. At a recent ASEAN Economic Ministers’ Retreat in Malaysia, discussions focused on upgrading the ASEAN Trade in Goods Agreement (ATIGA) and finalizing the ASEAN Digital Economy Framework Agreement (DEFA). These efforts are designed to liberalize trade further and foster digital innovation, positioning ASEAN as a neutral trade hub amid global uncertainties.
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Context & Background
The United States has recently proposed tariffs of approximately 25% on imports of automotive, semiconductor, and pharmaceutical products, aiming to protect domestic industries. These measures have raised concerns among ASEAN countries, which have significant trade relationships with the U.S. For instance, Malaysia’s electrical and electronics products constitute 60% of its trade with the United States. In response, ASEAN nations are seeking to strengthen regional trade agreements and digital economy initiatives to mitigate potential economic disruptions. ([bangkokpost.com](https://www.bangkokpost.com/business/general/2964891/asean-plans-us-summit-to-discuss-tariff-concerns-says-malaysian-foreign-minister?utm_source=openai))
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ASEAN (Association of Southeast Asian Nations)
A regional intergovernmental organization comprising ten Southeast Asian countries, promoting economic, political, and security cooperation.
Indonesia
A Southeast Asian nation made up of thousands of volcanic islands, known for its diverse cultures and economies.
Malaysia
A Southeast Asian country occupying parts of the Malay Peninsula and the island of Borneo, known for its beaches, rainforests, and mix of Malay, Chinese, Indian, and European cultural influences.
United States
A country primarily located in North America, comprising 50 states and known for its significant global economic and political influence.
Sri Mulyani Indrawati
The Finance Minister of Indonesia, serving since 2016, and previously the Managing Director of the World Bank Group.
Mohamad Hasan
The Foreign Minister of Malaysia, commonly known as Tok Mat, serving since 2024.
