Bullying Southeast Asia with Tariff Threats

Admin's note: This is a corrected version of the article, which originally appeared on IPS on 29 July here.

By Jomo Kwame Sundaram and Nadia Malyanah Azman

KUALA LUMPUR, Malaysia, Jul 29 2025 (IPS) - US President Trump has successfully used tariff threats to achieve economic, political and even personal goals. These threats, reminiscent of colonialism, have secured submission and concessions.

Indonesian template?

After hearing the 2024 US election results, Indonesian President Prabowo Subianto respectfully stood up in his Jakarta office to call to congratulate the winner.

Trump bragged about his tariff offer to Indonesia in mid-July 2025, profusely flattering its president. After initially hesitating, former General Prabowo agreed to join BRICS despite Trump’s clear disapproval.

“I spoke to their really great president, very popular, very strong, smart. And we made the deal. We will pay no tariffs … they are giving us access to Indonesia … the other part is they are going to pay 19% and we are going to pay nothing.”

An Indian commentator noted, “Those words say it all. This deal is clearly one-sided, and it should bother the whole world.” Americans, not Indonesians, will pay tariffs on imports from Indonesia.

The US is Indonesia’s second-largest export market, importing apparel, palm oil, footwear, and cosmetics. Initially, Trump had threatened a 32% tariff on such imports.

This has been reduced to 19%, still almost four times more than last year! In 2024, Indonesian exports to the US were taxed at 5% on average. The Indonesian president has not complained but instead seemed relieved.

Indonesia will lose not only exports, but also growth and jobs. As Trump loves to brag, he added insult to injury as he could not resist reiterating: “They will pay 19%, and we will pay nothing.”

Guaranteed sales

Indonesia will also buy $15 billion of US oil and gas, $4.5 billion of farm produce, and 50 Boeing jets. But the 2019 Lion Air plane tragedy, which the US plane manufacturer quickly blamed on Indonesian pilots, is still alive in the national memory.

Boeing’s reputation worldwide has not recovered from the investigation into the Nairobi air crash involving the same plane model, which led to its grounding.

Indonesia is among the US’s top 25 trade partners. The deal secures American access to the Indonesian market, allowing US goods to be sold tariff-free.

Last year, Indonesia shipped $28 billion worth of goods to the US. Higher tariffs are now expected to cut Indonesian exports by a quarter, GDP growth by 0.3%, and many jobs!

Other Southeast Asian lessons?

The Philippines’ Marcos II government is the most pro-US in Southeast (SE) Asia, hosting 11 American military bases.

Yet it was the only one without a US tariff offer before Secretary of State Rubio’s SE Asian visit earlier this month. The Philippines has since been offered a new US trade deal with the same 19% tariff rate despite its loyalty to Washington.

Loyal long-term support for the US, 11 military bases and serving as an additional ‘unsinkable aircraft carrier’ just south of Taiwan did not secure a better trade deal for the other archipelagic nation in SE Asia.

Trump wants trade deals even more favourable to the US than existing ones. With deadlines passing, the US is expected to announce more trade deals.

The tariff threats have been more effective for Trump, thanks to decades of trade liberalisation forced on the Global South, undermining earlier import-substituting industrialisation and food security measures.

Washington has already revised earlier demands, sometimes not just once, but typically to the chagrin of US trade partners. Vietnam’s Communist Party leader was initially thought to have negotiated a better deal than other SE Asian governments.

Lessons for others?

Will the US offer to Indonesia become a template for others? Or even for countries of comparable significance in the world economy? Nobody knows Trump’s strategy, let alone how it may still change.

Perhaps it begins with the threat of high tariffs, shock and awe. Then, a less painful deal is offered, dressed up as a concession.

This may be worse than the status quo ante, but it still seems preferable to the original threat. Nations will also be required to buy US goods that may not be needed or offer the best value for money.

Thus, US offers to SE Asia are being studied worldwide for lessons on better negotiating with Washington. Meanwhile, the US refuses to negotiate collectively except with the European Union.

All over the world, policymakers will continue to debate Trump’s tariff war strategy after Monday’s agreement in Scotland, which included a 15% baseline tariff on most EU exports to the US.

The US-EU deal makes clear the West, including Europe, has never really been committed to a rules-based international order, including multilateral trade liberalisation.

As American buyers pay the tariffs, imported goods become more expensive. US trading partners will lose exports, related growth and jobs. This will mean less expansion, employment and exports worldwide, deepening stagnation.

Meanwhile, most SE Asian governments believe they have little choice but to continue negotiating with the US, which is driving them to others willing to engage them on more favourable, if not fairer, terms.

Related IPS Articles

·                   Trump Undresses Rival Trade Myths

·                   Trump Accord Sows Discord in US Empire

·                   Trump’s ‘Shock and Awe’ Tariffs

·                   Weaponizing Free Trade Agreements

·                   Trade, Currency War Weapons Double-Edged

·                   What’s different about Trump’s tariffs?

·                   Trump’s Trade War in Perspective

Original available here: Bullying Southeast Asia with Tariff Threats

Will Europe Wage Peace?

By Jomo Kwame Sundaram

KUALA LUMPUR, Malaysia, May 20 2025 (IPS) - With President Trump’s efforts to end the Ukraine war, Europeans are now mainly responsible for prolonging it. Despite lame protestations of peace, Europe seems committed to fighting ‘to the last Ukrainian’.

Unsustainable peace

As Europe celebrated the end of the Nazi-initiated Second World War earlier in May, it does not seem to know how to sustain peace after war.

Both ‘world wars’ of the 20th century started in Europe as inter-imperialist wars, killing millions. In 1884-5, the Berlin Conference divided Africa among the dominant European powers.

After attending the Versailles palace negotiations following WW1, the young John Maynard Keynes’ The Economic Consequences of the Peace warned the agreement’s terms undermined a sustainable peace, almost anticipating Nazism’s later rise.

Towards the end of World War II (WW2), FDR’s Treasury Secretary, Henry Morgenthau, insisted Germany should not be allowed to re-industrialise after the War.

After starting and losing two world wars, German military aggression seemed unavoidable. For Morgenthau, reindustrialisation would inevitably lead Germany to war again.

For FDR, only postwar recovery for all would ‘win the peace’, not subjugating and destroying the loser.

His WW2 generals, famously Eisenhower, Marshall and MacArthur, imposed ‘pacifist’ constitutions and reforms for postwar growth on Germany and Japan.

Imperial oversight?

Despite his brilliant contemporaneous insights into the unsustainability of the peace secured at Versailles, Keynes ignored its outcome for China.

At Versailles, the Shandong peninsula, previously ruled by the Germans, was not returned to China, but given to Japan instead!

The resulting May 4th (1919) movement culminated in the Chinese revolution. Keynes was as blind to this as to WW2’s three million lives lost to the Bengal famine.

Although invisible in movies, tens of thousands from China were involved in WW1, mainly digging trenches for European troops in a war primarily remembered for trench warfare.

German possessions in southern Africa were not returned to Africans, but instead held ‘in trust’ by European powers, including the white South African regime.

While there have not been more ‘world wars’ since the end of the Cold War, there have been many more wars in the supposedly unipolar/multipolar world.

NATO v the UN

At the UN General Assembly, 141 countries condemned the Russian invasion of Ukraine in 2022. But many also oppose North Atlantic Treaty Organization (NATO) expansion via Ukraine to threaten Russia.

This is reminiscent of broad international support for President John F Kennedy in 1962 when he insisted Soviet missiles be withdrawn from Cuba, just off Florida.

NATO was established for the Cold War and should have been dissolved at its end. Its raison d’être, the rival Warsaw Pact, was gone. Worse, NATO expansion continues while it conducts unlawful wars not sanctioned by the UN Security Council.

German Chancellor Angela Merkel and French President François Hollande have both confessed that the 2014 Minsk deal with the Russians was intended to buy time to arm Ukraine for war later, not to secure peace.

Similarly, British Prime Minister Boris Johnson successfully blocked negotiations between Ukraine and Russia in the last half-year of his tenure. A peace deal would have ended hostilities and saved hundreds of thousands of lives, mainly Ukrainian.

Europe has continued to insist on war despite worsening odds. And when NATO allies blew up the gas pipeline from Russia to Germany, no protests followed.

NATO should have been dissolved at the end of the Cold War, once its raison d’être, the rival Warsaw Pact, was gone.

Despite Europe’s pretensions of leading worldwide efforts against global warming, it quickly reversed earlier commitments, even abandoning its 2021 Glasgow commitment to reject coal less than half a year later.

Unsurprisingly, the Global South remains sceptical of the EU’s carbon border adjustment mechanism (CBAM), perhaps only the latest form of European trade protectionism.

The EU has already worsened world economic conditions by raising interest rates, imposing illegal sanctions, insisting on fiscal austerity and cutting social spending in favour of military expenditure.

European leaders now proudly announce military Keynesian policies, expecting growth from more war spending. Thus, the turn to war has meant less growth and more inequality.

A non-aligned South?

FDR envisaged a peaceful new multilateral order offering progress for all. But such hopes have been squelched by political pressures for informal empire abetted by a resurgent military-industrial complex.

A different world is needed based on much stronger commitments to peace, freedom and non-alignment. It may be time for the West, the Global North and others to learn from the South-East.

In 1955, Indonesia hosted the Afro-Asian summit in Bandung, which boldly spoke for the post-colonial South and made the case for non-alignment as the Cold War began.

Over half a century ago, in 1973, the Association for South East Asian Nations (ASEAN), set up in 1967, committed to creating a zone of peace, freedom and neutrality (ZOPFAN).

Creating the enabling conditions for ongoing cooperation, development, and progress can help sustain the bases for a peaceful and progressive new world order.