KUALA LUMPUR: Malaysian Prime Minister Anwar Ibrahim warned Wednesday that global trade is being weaponized as Southeast Asia’s foreign ministers held annual talks ahead of the looming threat of U.S. trade tariffs.
Concerns about U.S. tariffs have jolted the Association of Southeast Asian Nations, a 10-member bloc that includes some of the world’s most trade-dependent economies.
Six ASEAN members are among the 14 countries that could see duties on their exports to the U.S. skyrocket on Aug. 1.
Launching the group’s foreign ministers’ meeting, Anwar said the world is now witnessing an era where “power unsettles principle” and “tools once used to generate growth are now wielded to pressure, isolate and contain.”
Without mentioning the U.S. by name, he again urged ASEAN to work together to respond to trade threats.
“Our cohesion must not end at declarations,” he said, calling for members to increase intra-ASEAN trade, invest in regional integration, and reduce strategic dependencies on external powers. “This is no passing storm,” he said. “It is the new weather of our time.”
Trump first announced tariffs in April, but then delayed them for 90 days to allow for deals to be negotiated. On Tuesday, he announced new tariffs with rates of between 25%-40% on 14 countries, which will go into effect Aug. 1 unless new deals are struck. He also threatened to increase tariffs if any countries retaliate.
Many ASEAN members have launched bilateral talks with the U.S., but officials have said they plan to hold an ASEAN-U.S. summit later this year to seek a common position.
So far, only Vietnam has secured a deal, bringing down its tariffs from 46% to 20%.
The list threatens 36% tariffs for Thailand and Cambodia, 32% for Indonesia, 25% for Malaysia, and 40% for Laos and war-torn Myanmar.
Reacting to the economic headwinds, Malaysia’s central bank on Wednesday cut its benchmark interest rate for the first time in five years.
Separately, Trade Minister Zafrul Aziz said Malaysia will continue tariff talks with the U.S. but won’t compromise on issues impacting national interest and sovereignty. He referred to U.S. requests on policy and laws in areas such as government procurement, halal certification, medical standards and digital tax, without giving details.
“It has to be fair … if the deal does not benefit Malaysia, we should not have a deal,” he said.
In addition to confronting trade fallout, the bloc faces mounting internal challenges including the ongoing civil war in Myanmar and a border dispute between Thailand and Cambodia.
The gathering in Malaysia will be immediately followed by a series of critical meetings with ASEAN’s major trade partners, including the U.S., China, Japan, Russia, India, and the European Union, scheduled for Thursday and Friday.
U.S. Secretary of State Marco Rubio, who last week cancelled trips to Japan and South Korea, will arrive Thursday for the talks on his first visit to Asia. Others visiting foreign ministers include China’s Wang Yi and Sergei Lavrov of Russia.
