NATIONAL
Feeding the eagle: How Trump rewrote the global tariff game and left ASEAN with only resilience
US President Donald Trump reshapes global trade by turning tariffs into psychological tools while Malaysia navigates strategic concessions and regional risks. - REUTERS/Filepic
ON July 31, 2025, U.S. President Donald Trump signed a pivotal executive order under his so-called “reciprocal tariff” policy, imposing duties of between 10% and 40% on dozens of trading partners. For the core ASEAN exporters—Malaysia, Indonesia, the Philippines, Thailand, and Cambodia—the final negotiated rate landed at 19%. This was a familiar shift: Malaysia originally faced 24% in April, then 25%, before that last-minute adjustment to 19%—framed by media as relief, but in truth a compressed retreat under pressure.
AI Brief
This is not negotiation. It is narrative control.
Trump did not dismantle WTO rules. He effectively reprogrammed global trade psychology. By threatening extreme tariffs and then offering relatively lower ones, he conditioned countries to internalize punishment as policy and gratitude as compliance.
For decades, under WTO frameworks and major FTAs, most industrial tariffs among advanced economies were gradually reduced to average effective rates between 0% and 5%. This low-tariff environment formed the psychological baseline of post-war global trade. Trump shattered that baseline. In its place, he imposed a new normal—where 10% or 20% duties are no longer punishments but perceived compromises.
The theatre was set by U.S. economic tensions. In June 2025, core PCE inflation unexpectedly surged to 2.8% year-over-year, while consumer spending stalled. That created room for Trump to blame imported goods for domestic strain, and frame tariffs as both command and scapegoat. Policymakers turned import duties into tools of political leverage—on both home and abroad.
Malaysia’s 19% outcome looks moderate—but the structural Achilles’ heel remains. Although semiconductors were momentarily exempt, they account for nearly 20% of Malaysia’s exports to the U.S. The rest—from electronics to furniture, rubber, and chemicals—remained exposed. Worse, that “relief” came paired with a RM 40.6 billion Boeing deal, broader pharmaceutical commitments, and investment concessions. While critics may frame this as submission, aircraft purchases have long been used by major economies—including China and France—as instruments of strategic engagement. In this light, the Anwar administration’s move should be understood not as capitulation, but as a calibrated effort to keep economic channels open while resisting disproportionate coercion.
The tariff architecture was neither random nor abstract. Countries were tiered: some experiencing the harshest levels (up to 40%), others “granted” symbolic thresholds. Singapore maintained a static 10%, effectively becoming a rhetorical foil amid ASEAN fragmentation. Trump’s strategy was not to unify—but to stratify.
This is no longer a policy debate. It is a performance.
Trump never exited global institutions. He theatre-ized them. Rules were not rewritten; they were repurposed. WTO names remained, but functionality shifted to choreographed obedience. Trade volumes became scripts; compliance became currency.
Malaysia’s 19% is neither a victory nor defeat—but a critical inflection point. The Anwar administration preserved key economic sectors and avoided escalation. Now the question is whether Malaysia will use this breathing room for structural reform: accelerating green manufacturing zones, deploying AI-first investment strategies, integrating with financial-tech corridors, and reinforcing its role within ASEAN frameworks.
Because the wider battle is not national—it is regional. Trump’s strategy is divide and govern: by tagging each ASEAN country with its own tier and side-conditions, he shattered their collective negotiation capacity. ASEAN is the real theatre, not the individual.
What ASEAN must now decide is clear: will it continue signing isolated deals, surrendering collective bargaining for temporary relief—or rebuild shared trade architecture, data-standard platforms, and sovereign negotiation channels?
This is more than a trade skirmish. It is a test of narrative sovereignty.
Trump may have fed the eagle with fear. But ASEAN—and especially Malaysia—must choose: remain scattered feathers in his storm, or root deeply into structural resilience.
AI Brief
- Trump uses extreme tariff threats to redefine global norms, making high duties seem like compromise.
- Malaysia secured a 19% tariff rate while protecting key sectors and making strategic concessions like aircraft purchases.
- ASEAN's unity is fractured by tiered tariffs, challenging its collective bargaining power and trade sovereignty.
This is not negotiation. It is narrative control.
Trump did not dismantle WTO rules. He effectively reprogrammed global trade psychology. By threatening extreme tariffs and then offering relatively lower ones, he conditioned countries to internalize punishment as policy and gratitude as compliance.
For decades, under WTO frameworks and major FTAs, most industrial tariffs among advanced economies were gradually reduced to average effective rates between 0% and 5%. This low-tariff environment formed the psychological baseline of post-war global trade. Trump shattered that baseline. In its place, he imposed a new normal—where 10% or 20% duties are no longer punishments but perceived compromises.
The theatre was set by U.S. economic tensions. In June 2025, core PCE inflation unexpectedly surged to 2.8% year-over-year, while consumer spending stalled. That created room for Trump to blame imported goods for domestic strain, and frame tariffs as both command and scapegoat. Policymakers turned import duties into tools of political leverage—on both home and abroad.
Malaysia’s 19% outcome looks moderate—but the structural Achilles’ heel remains. Although semiconductors were momentarily exempt, they account for nearly 20% of Malaysia’s exports to the U.S. The rest—from electronics to furniture, rubber, and chemicals—remained exposed. Worse, that “relief” came paired with a RM 40.6 billion Boeing deal, broader pharmaceutical commitments, and investment concessions. While critics may frame this as submission, aircraft purchases have long been used by major economies—including China and France—as instruments of strategic engagement. In this light, the Anwar administration’s move should be understood not as capitulation, but as a calibrated effort to keep economic channels open while resisting disproportionate coercion.
The tariff architecture was neither random nor abstract. Countries were tiered: some experiencing the harshest levels (up to 40%), others “granted” symbolic thresholds. Singapore maintained a static 10%, effectively becoming a rhetorical foil amid ASEAN fragmentation. Trump’s strategy was not to unify—but to stratify.
This is no longer a policy debate. It is a performance.
Trump never exited global institutions. He theatre-ized them. Rules were not rewritten; they were repurposed. WTO names remained, but functionality shifted to choreographed obedience. Trade volumes became scripts; compliance became currency.
Malaysia’s 19% is neither a victory nor defeat—but a critical inflection point. The Anwar administration preserved key economic sectors and avoided escalation. Now the question is whether Malaysia will use this breathing room for structural reform: accelerating green manufacturing zones, deploying AI-first investment strategies, integrating with financial-tech corridors, and reinforcing its role within ASEAN frameworks.
Because the wider battle is not national—it is regional. Trump’s strategy is divide and govern: by tagging each ASEAN country with its own tier and side-conditions, he shattered their collective negotiation capacity. ASEAN is the real theatre, not the individual.
What ASEAN must now decide is clear: will it continue signing isolated deals, surrendering collective bargaining for temporary relief—or rebuild shared trade architecture, data-standard platforms, and sovereign negotiation channels?
This is more than a trade skirmish. It is a test of narrative sovereignty.
Trump may have fed the eagle with fear. But ASEAN—and especially Malaysia—must choose: remain scattered feathers in his storm, or root deeply into structural resilience.
CW Sim is Chief Strategic Advisor on Greater China, Strategic Pan Indo-Pacific Asia (SPIPA)
** The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the position of Astro AWANI.
