Southeast Asian countries are choosing diplomacy over confrontation in response to President Donald Trump’s “reciprocal tariffs.”
Rather than retaliate, they’re signaling a willingness to negotiate, aiming to protect their export-driven economies and maintain access to the critical U.S. market.
Vietnam, Cambodia, and Indonesia have expressed a willingness to engage in negotiations, while Singapore, a major finance and trade center, has stated that it does not intend to retaliate.
This comes as countries around the world are grappling with President Trump’s decision to impose tariffs ranging from 10% to 50%.
The move has led to a significant market downturn, wiping out trillions in value and raising concerns of a global recession.
In contrast to China’s immediate retaliation, Southeast Asian nations are opting for negotiation, seeking to avoid further economic strain.
Since Trump’s return to office in January, Vietnam has worked to avoid heavy tariffs, with Prime Minister Pham Minh Chinh even suggesting he’d play golf with Trump at Mar-a-Lago if it helped ease trade tensions.
To maintain good relations, Vietnam has already made concessions, including cutting tariffs on American cars, ethanol, and liquefied natural gas, in an effort to placate the U.S. and safeguard its export interests.
Trump has expressed openness to negotiations if countries present offers that are “phenomenal,” indicating he’s willing to strike deals as long as the terms are significantly beneficial to the U.S.
“The tariffs give us great power to negotiate,” Trump said aboard Air Force One on Thursday, adding that “every country has called us.”
Vietnam seems to have taken the lead, with its leader, To Lam, offering to reduce tariffs on U.S. goods and increase imports to avoid Trump’s 46% tariff.
President Trump called their conversation “very productive” and suggested that the two leaders would meet to discuss further.
Cambodia, one of the poorest countries affected and facing the highest U.S. tariff of any Asian economy at 49%, pledged to reduce its own tariffs on U.S. goods and increase imports from the U.S. in an effort to mitigate the impact of the tariffs.
“Cambodia is a serving a useful purpose, smoking out the level of negotiating ambition of the United States,” said Simon Evenett, founder of the St. Gallen Endowment for Prosperity Through Trade, a group based in Switzerland that tracks trade policies. “If the Americans push too hard, they’ll scare away other bigger fish.”
Meanwhile, Indonesia, facing a 32% U.S. tariff, committed to relaxing trade regulations and is sending a delegation to Washington next week to discuss potential solutions.
The prospect of a deal with Vietnam boosted the stocks of U.S. sneaker and apparel makers, who have grown more reliant on the country due to its skilled, low-wage labour, robust infrastructure, and favorable trade agreements with the U.S.
According to regulatory filings, about half of all Nike brand shoes and 39% of Adidas shoes are produced in Vietnam, making the country the largest supplier of footwear for both companies.
