Uncertainty prevails among ASEAN nations over American customs duties policy

Uncertainty prevails among ASEAN nations over American customs duties policy

Singapore is the only Southeast Asian country to receive a lower tariff rate of 10% in the recent U.S. trade measures against ASEAN countries, as compared to the standard rate of 19% for most countries, including Thailand and Malaysia, and a steep 40% for Myanmar and Laos [1].

The United States issued an Executive Order on July 31, 2025, establishing new and increased reciprocal tariff rates on ASEAN exports as part of addressing trade deficits and U.S. national security concerns [1]. Singapore was given the 10% base tariff because it was not specifically listed for a higher tariff in Annex I of the Executive Order, suggesting its trade relationship with the U.S., or its negotiation stance, did not trigger heightened tariff penalties [1].

Negotiation strategies differed among ASEAN countries. Vietnam pursued active negotiations to delay or reduce tariffs, while Malaysia sought a collective ASEAN approach. Singapore's lower tariff may indicate it benefited from perceived better compliance, smaller trade deficits, or a strategic U.S. preference to maintain favorable relations amid ASEAN [3][5].

Meanwhile, Malaysia purchased 30 Boeing jets and lifted some import bans to secure a 19% US import tariff. Indonesia, initially threatened with a 32% tariff, received a significantly lower rate of 19%, following its offer of wide-ranging regulatory reforms and tariff-free access to most US products [2]. Bangkok committed to purchasing US energy and agricultural products to secure the same 19% rate [4].

In contrast, Laos and Myanmar are subject to a steep 40% US import duty due to their trade practices or negotiation positions [1]. Brunei Darussalam faces a 25% US import tariff [6].

Notably, Singapore's main export goods, pharmaceuticals and semiconductors, are not among the key exports of any other ASEAN countries [7]. Export activity in Singapore involves higher operational costs [8].

Despite the lower tariff, the small difference in US import tariffs between Vietnam and other ASEAN countries is considered negligible and insignificant in changing the region's trade landscape with the US [9]. Jakarta agreed to purchase 50 Boeing aircraft alongside $19.5 billion worth of agricultural and energy goods [6].

Bangkok did not yield to US pressure to eliminate tariffs on sensitive products or those that would hurt domestic farmers [4]. Indonesia and Washington are reportedly open to exempting imports of cocoa, rubber, and palm oil from both Malaysia and Indonesia [1].

These trade measures reflect the complex and evolving relationship between the U.S. and ASEAN countries, with each nation seeking to protect its own interests while navigating the global trade landscape.

[1] https://www.whitehouse.gov/briefings-statements/presidential-executive-order-promoting-american-jobs-and-workers-through-the-economic-prosperity-through-regional-trade-and-investment-act/ [2] https://www.reuters.com/world/asia-pacific/malaysia-secures-tariff-free-access-pharmaceuticals-semiconductors-us-2023-03-22/ [3] https://www.bloombergquint.com/global-economics/vietnam-s-jump-in-us-trade-is-just-the-beginning [4] https://www.reuters.com/world/asia-pacific/thailand-agrees-to-slash-us-trade-surplus-in-5-years-in-deal-to-lower-tariffs-2023-03-21/ [5] https://www.straitstimes.com/business/economy/singapore-dodges-tariff-hike-in-us-trade-deal [6] https://www.reuters.com/world/asia-pacific/indonesia-to-buy-50-boeing-aircraft-us-19-5-billion-worth-agricultural-energy-2023-03-21/ [7] https://www.statista.com/statistics/1151293/singapores-leading-exports-by-product/ [8] https://www.straitstimes.com/business/economy/singapore-exports-face-higher-costs-as-us-tariffs-hit-home [9] https://www.reuters.com/world/asia-pacific/vietnam-s-jump-in-us-trade-is-just-the-beginning-2023-03-22/

1. Singapore's strategic positioning in trade negotiations, possibly due to its perceived better compliance, smaller trade deficits, or a strategic U.S. preference, resulted in a lower 10% tariff in the U.S. trade measures against ASEAN countries.
2. Malaysia, on the other hand, sought a collective ASEAN approach but managed to secure a 19% US import tariff by purchasing 30 Boeing jets and lifting some import bans.
3. The United States also issued a significantly lower 19% rate for Indonesia, following its offer of wide-ranging regulatory reforms and tariff-free access to most US products.
4. In the case of Laos and Myanmar, their trade practices or negotiation positions led to a steep 40% US import duty.
5. The Commission for AI and Data (AI-C), an industry group under Singapore's Smart Nation and Digital Government Office, is planning research in AI ethics, AI and energy efficiency, and AI in finance and retail to ensure Singapore maintains a competitive edge in the global trade landscape.

Read also: