US tariffs, economic sovereignty set to dominate high-level Asean meetings in KL

The revised US tariffs are expected to dominate discussions among Southeast Asian leaders at several high-level meetings today, held in conjunction with the 58th Asean Foreign Ministers’ and Post-Ministerial Conference in Kuala Lumpur.

Two Asean member states – Brunei and the Philippines – are the latest among eight nations to receive tariff letters from US President Donald Trump, sent out on Wednesday. The others are Brazil, Sri Lanka, Algeria, Iraq, Libya, and Moldova.

Brazil received the highest tariff rate at 50 per cent. Algeria, Sri Lanka and Iraq were each slapped with a 30 per cent rate; Brunei, Libya and Moldova with 25 per cent; while the Philippines was hit with a 20 per cent tariff.

All eyes will be on US Secretary of State Marco Rubio, who arrived in Kuala Lumpur this morning. Malaysia’s Prime Minister Datuk Seri Anwar Ibrahim confirmed yesterday that he would be meeting Rubio, following the announcement that Malaysia would face a 25 per cent tariff – one per cent higher than the initial rate announced by Trump in April. The new tariff rates are scheduled to take effect on Aug 1, unless affected nations reach trade agreements with Washington.

Speaking at the opening of the annual meeting of Asean foreign ministers yesterday, Anwar warned that global trade is being weaponised against weaker nations.

“Across the world, tools once used to generate growth are now wielded to pressure, isolate, and contain. Tariffs, export restrictions, and investment barriers have now become the sharpened instruments of geopolitical rivalry,” Anwar said.

“This is no passing storm. It is the new weather of our time.”

Malaysia has reiterated it will continue “negotiating” with the US, with International Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz stating that there are “specific red lines that we will not compromise on“.

In its 2025 National Trade Estimate Report on Foreign Trade Barriers, the Office of the US Trade Representative (USTR) highlighted that Malaysia’s halal requirements exceeded international norms, requiring halal-only facilities and complex registration processes that increased costs and caused delays. The report also cited Malaysia’s Bumiputera equity requirements as trade barriers. Environmental and labour law issues were also raised.

Anwar also called on Asean member states to begin investing in one another.

The Asean geoeconomic task force was established during an economic ministers’ retreat in February. Its preliminary recommendations include boosting intra-Asean trade and advancing the Regional Comprehensive Economic Partnership.

The Asean Digital Economy Framework Agreement is also expected to be a game changer for the region. Once concluded, Asean could become the fourth-largest economy in the world by 2030, with a projected digital economy worth US$2 trillion.