Trump's Victory Set To Reshape Economic And Political Landscape For ASEAN And West Asia, Analysts Say

By Rohani Ibrahim in Kuala Lumpur and Iswandi Kasan Anuar in Jakarta

KUALA LUMPUR, Nov. 15 (Bernama) -- As the world awaits the announcement of the new policies of the United States to be introduced by the Cabinet that is being formed by President-elect Donald Trump, various predictions have started to emerge from international observers.

Among the topics capturing global attention and sparking discussions among analysts are the economic and geopolitical impacts of the Republican candidate’s victory on the Asian region, particularly on China, ASEAN – which represents nearly the entirety of Southeast Asia – and West Asia.

The world still recalls Trump’s previous presidency from 2017 to 2021, during which he championed American economic nationalism and the “America First” stance, inadvertently bringing about negative effects on global trade and geopolitics.

His campaign rhetoric promising a 60 per cent tariff on Chinese products entering the US and his commitment to ending conflicts in Gaza and Ukraine with urgency have raised various questions.

Geostrategist Prof. Azmi Hassan, when contacted by Bernama, said that for Southeast Asia, which largely includes the ASEAN bloc, Malaysia might not be directly affected by Trump’s victory.

This is because Trump has not imposed any significant economic impacts previously, as he had announced a general stance of tariffs between 10 and 20 per cent on all countries, including Malaysia.

“However, China specifically will face a 60 per cent tariff on exports. This will hamper China’s economic growth, consequently affecting other nations with high export levels to China, including Malaysia. The economic impact will be quite severe,” he said.

Azmi also predicted that under Trump’s administration as the 47th President, US-China relations would be more strained than under President Joe Biden and even compared to Trump’s earlier term as the 45th President.

Trump’s commitment to penalising China and his statement that all companies based in the US would no longer be allowed to operate abroad, except in the “Uncle Sam” nation itself, are contributing factors, he said.

When asked about US’ relations with ASEAN and Malaysia, which is set to chair the bloc next year, Azmi noted Malaysia’s intention to join BRICS (the group comprising Brazil, Russia, India, China, and South Africa) and its close ties with China and Russia as factors that could “lead ASEAN further away from the US.”

“Trump does not favour BRICS as there are speculations that the group might abandon the greenback in global transactions. One of Trump’s promises is to boost the US economy by strengthening the dollar. This stance is expected to affect ASEAN and Malaysia, as it assumes the bloc's chairmanship next year,” he said.

In response to questions about Gaza and West Asia under Trump’s administration, Azmi said Trump had indeed pledged to end the war in Gaza, but that plan would likely be influenced by the approach of Israeli Prime Minister Benjamin Netanyahu.

He noted that during Trump’s previous term, he moved the US embassy from Tel Aviv to Jerusalem despite the unresolved status of East Jerusalem, which remains contested between Palestine and Israel.

The move was aimed at justifying that all of Jerusalem belonged to Israel. Therefore, Trump has shown more support for Israel compared to Biden, he said.

According to Azmi, Netanyahu’s desired outcome is for Israel to have 100 per cent control of northern Gaza to establish further illegal Jewish settlements as seen in the West Bank, and for Israel to have full control over the Rafah border crossing between Gaza and Egypt.

He also anticipated that Trump’s administration would aim to dismantle Iran’s uranium processing capabilities to prevent nuclear bomb development, likely by giving Israel the green light to target nuclear facilities in the country.

Meanwhile, Principal Adviser at Pacific Research Center of Malaysia and Senior Fellow at Singapore Institute of International Affairs Dr Oh Ei Sun, when contacted, also concurred with Prof Azmi on the challenges to be expected during Trump’s tenure.

Oh noted that for ASEAN countries in particular – especially the major economies such as Malaysia, Indonesia, Singapore, Thailand and perhaps the Philippines and Vietnam – are going to face a lot of ‘headwinds’ in trying to export various goods to the US.

“Because Trump is determined on imposing high tariffs on both friends and rivals of America. So in terms of  export  to America, I think it is going to take a big hit,” he said.

However, according to Oh, disadvantages often bring opportunities, making this an opportune time to invest in America—such as by establishing factories.

 “I think you will face fewer regulation under Trump’s administration as he wants to create jobs for the Americans and make America great again. That means he welcomes foreign investment into the US,” he added.

Oh forecasts that US-China ties will be more tense on the economic front due to high tariffs on exports from China to the US, but in terms of geopolitical confrontation and ideological differences, he believes Trump will not pay much attention to them.

“Countries in Southeast Asia (SEA) under Biden’s administration are being forced to choose siding China or US geopolitically, but the pressure will be much lesser under Trump administration this time. So economically, we (SEA) are going to face headwinds; but geopolitically, there is a sigh of relief,” he said.

Referring to the development in Middle East under Trump’s administration this time, Oh also concurred with Prof Aziz, saying Trump is a very good friend of Netanyahu in Israel’s  war against Palestine, in Lebanon, Syria, Yemen and Iran.

“Of course those countries better watch out because Trump’s administration is going to redouble effort in supporting Israel and favour Israel’s side,” he said. 

SIDE BAR

INDONESIAN OFFICIALS AND ANALYSTS SHARE SIMILAR OPINION ON TRUMP  

Meanwhile, in Jakarta, Indonesian analysts and a former official also shared similar views on the consequences of Trump’s return to the White House.   

They believe Trump’s victory could directly impact Indonesia with potential changes to trade policies –including a review of the Generalised System of Preferences (GSP) and new tariffs that could affect Indonesian exports to US.

Abiyan Dzakwan, a researcher at CSIS Indonesia, explained that while on paper the GSP can be seen as beneficial for Indonesia in providing a trade surplus, it may not be the case.

The reason is that Trump’s proposed 20 per cent universal tariff, along with an additional 60 per cent tariff on China, could harm Indonesia due to its strong economic ties with China, particularly in global supply chains.

However, Abiyan is hopeful that "Trump’s transactional leadership style could work in Indonesia's favour. “As long as we hit the right note, we may be able to get what we want or need", he said,

"Additionally, Trump seems to favour strongman leadership, so Indonesia’s leadership under President Prabowo Subianto, which shares similar characteristics, may allow for better negotiations with Trump," he was quoted as saying by CNN Indonesia.

On the South China Sea, former Indonesian Foreign Minister Marty Natalegawa also warned that a Trump presidency could exacerbate uncertainty among US allies in the region, particularly regarding security commitments.

"Regional allies may be driven to develop their own defence capabilities, including in missile technology and maritime security," Marty said, as quoted by BBC News Indonesia, adding that this could lead to an "action-reaction" cycle, increasing the risk of conflict.

In the final analysis, the greatest concern among analysts in Southeast Asia is that the Trump administration might fulfill its campaign rhetoric, creating economic and geopolitical repercussions worldwide.

While some countries, including Malaysia and Vietnam, might experience mixed effects from Trump’s policies, shifts in the US-China relationship could cause significant economic harm if tensions escalate into a broader conflict.

-- BERNAMA