For decades, Southeast Asia prided itself on maintaining a balance between economic interests and security concerns, famously holding to the principle that "economics is economics, and security is security." However, recent developments, such as China's strong warnings to Malaysia and Cambodia, show that this divide is no longer sustainable.
The shift is stark: today, the US uses trade agreements as a leverage to demand alignment on security issues, while China, leveraging its economic might, insists on political loyalty.
ASEAN countries, traditionally neutral in their foreign policies, are now caught in a web where economic choices are increasingly tied to geopolitical pressures. This transformation marks the convergence of economic deals with national security interests, forcing Southeast Asian nations to reassess their positions.
US Strategy: Turning Trade Incentives into Security Demands
The US has long used economic incentives and tariffs as tools to influence global politics, but its strategies have taken a more targeted turn in Southeast Asia. Countries like Malaysia and Cambodia recently found themselves facing the choice of either complying with US demands or facing tariffs, including potential penalties of up to 19% as announced during Donald Trump’s presidency.
The US strategy involves offering trade benefits such as tariff exemptions and special market access in return for commitments to align on security issues. This approach is not simply economic; it’s about securing geopolitical loyalty. The threat of tariffs, once a purely economic measure, is now deeply intertwined with security obligations. In effect, trade agreements are becoming tools of political leverage.
Another critical aspect is the technology control clause often embedded in these agreements, particularly regarding the export of sensitive technology. The US has pressured countries like Malaysia and Cambodia to follow strict export controls, preventing them from sharing sensitive technologies with China.
In this way, trade becomes an instrument of control over technological ecosystems, especially in fields like semiconductor manufacturing, where countries like Malaysia are seen as vulnerable points in the global supply chain.
China's Economic Leverage: Demanding Political Loyalty
On the other side of the geopolitical divide, China uses its economic influence to demand loyalty from its trading partners. In recent months, China’s diplomatic warnings to Malaysia and Cambodia have underscored the tension between economic cooperation and political alignment.
The phrase "grave concerns" used by Beijing in reference to Malaysia’s potential alignment with the US is not just a diplomatic complaint; it’s a clear message to ASEAN countries about their economic and political choices.
China’s vast market and investment capacity are potent tools for influencing regional politics. Through its deep integration into ASEAN economies, China has made it clear that political loyalty comes at a price. If countries in the region lean too far into the US camp, China is not afraid to withdraw economic support, impacting everything from trade flows to tourism. For countries heavily dependent on Chinese investments and exports, this puts them in a difficult position.
This creates a dilemma: ASEAN countries must now balance the risks of alienating one global power while simultaneously weighing the potential consequences of economic retaliation from the other.
Navigating the New Normal: ASEAN’s Tough Choice
For Southeast Asian countries, the increasing intertwining of trade with security has created an environment of difficult choices. The benefits of deeper ties with both China and the US are undeniable, but these economic advantages come with increasing political obligations.
ASEAN nations can no longer enjoy the luxury of maintaining neutral relations with both sides without facing significant political and economic consequences.
This new reality compels ASEAN countries to weigh the costs of maintaining neutrality against the potential loss of access to either market. Countries must now consider not only the immediate economic returns but also the long-term political implications of their choices. The challenge moving forward will be to navigate this complex landscape, where economic decisions are inevitably tied to global power dynamics.
The Weaponization of Trade and the Future of ASEAN
The recent trade agreements between ASEAN countries and the US or China show that economic partnerships are no longer just about the exchange of goods. They have become tools of geopolitical maneuvering, pushing countries to make hard choices between economic interests and security alignments. The days of simply separating trade from politics in Southeast Asia seem to be over.
As the US and China continue to use economic leverage to shape alliances, the future of ASEAN lies in how these nations adapt to a world where trade is as much about political allegiance as it is about profit.
The growing interdependence of economics and geopolitics will force ASEAN countries to refine their strategies and create new alliances, or risk becoming pawns in the great geopolitical game between superpowers.
