Economic and security alliances as a defense against a “tariff war”

By: Ina Stašević, Croatia, Europe

For the past ten years, the world has been constantly striving to reduce tariffs and double taxation of goods in order to facilitate their flow and ensure equal economic development. This idealistic approach to international economic relations was abruptly disrupted by the re-election of Trump as US President. The world is faced with a new challenge, a kind of tariff war. In order to alleviate inequalities in the export and import of goods, Trump has decided to impose high tariffs on those countries with which the US has a negative trade balance. But not only on them. This is a kind of pressure on countries that threaten the position of the US as the largest economic power, primarily China and India, but also the European Union. After repeated threats, an agreement was reached with some countries on the level of the tariff rate (which is not less than 15%), while extremely high tariffs (of 60% and more) were unilaterally imposed on others, and even 100% for strategic raw materials. The fundamental idea of Trump is to return production to the USA and maintain the leading position of the most powerful country in the world.

A kind of defense against rampant tariff rates are the existing security and economic alliances. Among the most significant is ASEAN (Association of Southeast Asian Nations), a regional international organization that includes ten Southeast Asian countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The reason for the association is to promote economic growth, social progress, cultural development, and regional peace and stability. ASEAN was founded on August 8, 1967 in Bangkok, with the signing of a declaration by the five founding countries. The main goal is accelerated economic growth and social progress, regardless of the existing significant differences between the members (differences in population size: less than half a million - Brunei to 283.5 million - Indonesia; differences in GDP per capita: about $ 1,500 - Myanmar and Cambodia to 60,000 - Singapore).
Promoting economic cooperation among ASEAN member states involves reducing trade barriers and creating an integrated regional economy. With a population of 678 million and a GDP of over USD 10 trillion (accounting for 6.5% of global GDP), ASEAN is a globally significant market. For this reason, cooperation agreements with ASEAN have been signed by major countries such as China, India, Australia, Japan, South Korea and New Zealand. However, the latest tariffs imposed by the US are expected to affect several export-dependent economies in the region.
Of course, the association faces some challenges, such as different socio-political systems and resolving disputes between member states. For example, over the situation in Myanmar and different interests in the South China Sea. Regardless of existing disagreements, ASEAN plays a key role in the economy, security and development of the entire region.
On the occasion of the 58th anniversary of the founding of ASEAN at the residence of the Indonesian Ambassador in Zagreb, H.E. Suwatrini Wirta, a commemorative program was held, attended by the ambassadors of Japan, South Korea, China, and the charge d'affaires of the Malaysian embassy, along with other diplomats.
In a roundtable discussion, Ambassador of the Republic of Korea, H.E. SEUNG-BUHM LEE, emphasized that fair and free trade is essential for global economic growth and is in the interest of all. South Korea has achieved remarkable economic development over the past few decades within this fair and free international trading order. South Korea will actively participate in collective efforts to establish and advance an international order that upholds this principle.

The Charge d’Affaires of Malaysia, JOHAN IKRAM BIN AHMAD RUSLI, commented as follows:
In response to the imposition of tariffs by the United States effective 1 April 2025, Malaysia has adopted a proactive and resilient strategy to protect its economy, with an emphasis on constructive diplomacy and strategic investments while safeguarding national interests. Through negotiations, Malaysia successfully reduced its tariff rate from an initial threat of 25% to 19%, effective 8 August 2025, aligning it with several ASEAN countries and providing exemptions for key sectors such as semiconductors and pharmaceuticals, which are key to Malaysia’s export-led growth. To address the bilateral trade imbalance and prevent wider repercussions, Malaysia has committed to more than US$240 billion in deals, including US$150 billion in procurement of semiconductors, data centres and aircraft over five years by multinational companies; US$70 billion in investment in the US over a decade; a $42.6 million annual purchase of coal by Tenaga Nasional (Malaysia's national power company); $3.4 billion of liquefied natural gas by Petronas; and a $19 billion order for Boeing aircraft by Malaysia Aviation Group as part of a fleet renewal. Malaysia has mutually agreed to eliminate tariffs on 98.4% of US imports and to ease non-tariff barriers, fostering mutual benefits without compromising sovereignty.