In geopolitics, there are no permanent friends or enemies, but there are permanent interests. While many Southeast Asian countries have tried to maintain their economic ties with the United States and China, US President Donald Trump’s economic and tariff plans are inadvertently helping China strengthen its position in Asia.

On April 2, Trump announced a new round of tariffs, calling it “Liberation Day”. These tariffs include a 10 percent universal tariff on all imports and higher rates for several Asian countries such as China (34 percent), Vietnam (46 percent), Cambodia (49 percent), Laos (48 percent), Thailand (36 percent), Indonesia (32 percent), Malaysia (24 percent), and the Philippines (17 percent).

These “reciprocal” tariffs are the highest US taxes on trade since 1909. House Minority Leader Hakeem Jeffries called April 2 the “Recession Day”, highlighting the potential negative impact on the US economy. Many economists forecast these wide-ranging tariffs will accelerate inflation, resulting in stagflation as economic growth falters and prices remain painfully high.

Global stock markets reacted sharply on April 3 and 4, wiping out more than 5 trillion dollars in value. Subsequently, China retaliated by imposing 34 percent tariffs on US goods, and Trump responded with an additional 50 percent tariff on Chinese imports, bringing the total additional tariff to 104 percent on April 8 and further to 125 percent on April 9. In response, China pushed back by increasing its levies on US imports to 84 percent on April 9.

The US stock market continued to react negatively to the ongoing tit-for-tat tariff war between the US and China before a steep rebound on Wednesday after Trump announced  a 90-day pause on the “reciprocal” tariffs that are above the universal 10 percent baseline rate for most countries. This dramatic sell-off was driven by investor fears over the potential economic impact of the tariffs, which are expected to raise consumer prices and disrupt global supply chains.

Trump’s view on China has been consistent since his first term when he launched the trade war against Beijing, including tariffs and export controls since 2018. He claims that the trade policy with China has been unfair.

Among all nations subject to the new “reciprocal” tariffs, Trump singled out China as a major target.

Aside from imposing 125 percent additional tariffs on Chinese goods so far, Trump also signed an executive order to eliminate the so-called de minimis provision for low-value parcels from China, effective May 2.

Companies like Shein and Temu have leveraged the $800 de minimis rule to ship low-value packages from China to enter the US duty-free. The elimination of this rule will significantly impact Shein and Temu, which ship over 1 million packages daily to the US.

Higher tariffs on countries such as Vietnam would close the backdoors that China has used for final assembly operations to change the country of origin to Vietnam and circumvent high tariffs on goods imported from China.

The combination of higher tariffs on China and other countries in Asia and the elimination of the de minimis rule will affect China’s economy, which is experiencing slower growth. However, Trump’s tariffs can help China to strengthen its economic ties with other Asian countries.

The high tariffs will reshape regional trade among Southeast Asian countries. Geopolitically and economically, many Southeast Asian countries have tried to balance relations between the West and China. Vietnam, in particular, has a complex history with both powers. Despite past conflicts, Hanoi now fosters good relations with Beijing while rapidly opening up to Western businesses and investments.

Vietnam and other Southeast Asian countries leverage their strategic location and significant economic potential to make them attractive partners for China and the US. For example, countries such as Vietnam, Indonesia, and Malaysia use their burgeoning tech industries, growing consumer markets, and substantial manufacturing sectors to draw considerable interest.

Trump’s tariffs could encourage Southeast Asian nations to solidify their alliances within the Association of Southeast Asian Nations (ASEAN) and leverage regional trade agreements such as the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement involving 15 countries including the 10 ASEAN member states, Australia, Japan, New Zealand, and South Korea, to boost regional trade as intended.  

The high “reciprocal” tariffs imposed by the US can catalyze China to strengthen its ties within Southeast Asia.

First, China can expand its influence through the RCEP and leverage its BRICS membership to enhance trade relations. Additionally, China is unlikely to lower its tariffs to appease Trump. Instead, it has retaliated with 84 percent tariffs on US goods. The increased tariffs from both countries will reduce bilateral trade.

While China can survive without importing most of the $125 billion in US goods, the US and many other countries will continue to rely on China for various parts and components. Even if the US imports goods from other countries, those countries will still depend on China for parts.

Furthermore, as China leads in electric vehicle (EV) battery production, Trump’s tariff policy could encourage Southeast Asian countries to deepen their economic ties with China. Chinese carmaker BYD, for instance, has established new factories in Thailand and Indonesia, offering affordable EVs for regional markets.

Trump’s reciprocal tariffs will likely cause a self-inflicted recession in the US.  Also, it could create confusion and unintended consequences.

For example, Trump reported that he had a call with Vietnam leader To Lam, who expressed a desire to cut Vietnam’s tariffs on US goods to zero in exchange for the removal of the 46 percent “reciprocal” tariff on Vietnamese goods. If this happens, it would contradict the “dubious” formula that Trump used to compute the “reciprocal” tariffs based on the country’s trade deficit divided by its exports to the US times one half. For example, the US’ trade deficit with China in 2024 was $295.4 billion, and the US imported $439.9 billion worth of Chinese goods. That means China’s trade surplus with the US was 67 percent of the value of its exports — a value the Trump administration labeled as “tariff charged to USA”. And half of that is 34 percent as announced.

Even if Vietnam’s tariffs on US goods are reduced to zero, it is unlikely that Vietnam’s trade surplus with the US would disappear based on the “reciprocal” tariff formula. This is because Vietnam’s consumption capacity for US-made products is not comparable to the American consumer demand for electronic goods assembled in Vietnam.

Trump’s global tariff plan puts the US at risk, nudging other Asian countries to strengthen their ties with China.

Christopher Tang is a distinguished professor at the UCLA Anderson School of Management.

The views do not necessarily reflect those of China Daily.