The recent ASEAN Summit in Kuala Lumpur, Malaysia — held against the backdrop of rising U.S. protectionism and U.S. President Donald Trump’s second-term tariffs — was an opportunity for Southeast Asian nations to coalesce and deepen their existing trade and economic ties.
The theme of Malaysia’s 2025 ASEAN chairmanship is ‘inclusivity and sustainability,’ with an emphasis on ASEAN centrality and economic integration. At their May 26–27 Summit, ASEAN leaders adopted and signed the Kuala Lumpur Declaration on ASEAN 2045: Our Shared Future, a 20-year roadmap to guide the bloc in navigating global ‘megatrends’ while reinforcing its role as a community.
The goals, as articulated in the declaration, include significantly increasing intra-ASEAN trade and investment, making ASEAN “the industrial and manufacturing hub of the Indo-Pacific with dynamic micro, small and medium enterprises (MSMEs),” and using the ASEAN Digital Economy Framework Agreement (DEFA) to double the value of the region’s digital economy to US$2 trillion by 2030.
ASEAN meetings have long been criticized for failing to deliver meaningful progress, stemming from members’ adherence to the principles of consensus and non-interference. Nevertheless, the recent summit stood out in a number of ways.
One of its most significant achievements was the first-ever ASEAN-GCC-China Summit, which took place at the same time as the ASEAN Summit. (Members of the GCC, or Gulf Cooperation Council, include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.) This linkage with the GCC is significant: its total commodity trade with China was nearly US$298 billion in 2023 and it accounted for 36 per cent of China’s total crude oil imports that year. It is also ASEAN’s seventh-largest trading partner.
This bringing together of three of the world’s fastest-growing regions for a trilateral meeting was historic, in that it blended old trading ties with present-day geopolitical urgency. While ASEAN and the GCC had previously held formal meetings, it was the first time China was brought into the fold. This three-way intersection melds financial leverage from the Gulf, technological capabilities from China, and the ASEAN market’s dynamic demand and supply chain linkages. Among the commitments made by the three partners were enhanced economic collaboration, improved connectivity, co-operation on sustainable development, and a more active role for the Global South in global governance.
The talks also touched on de-dollarization and financial self-reliance, with delegates advocating for interoperable cross-border payment systems to buffer against external volatility. Collectively, these developments indicate that the Global South is responding to what it perceives as an increase in U.S. trade isolationism. Less than two months after Trump’s April 2 ‘Liberation Day’ reciprocal tariff announcement, the implications are already reverberating in this region, with new trade and geoeconomic relationships rapidly developing as a way to hedge against overdependence on the U.S.
That China featured prominently was no surprise; Premier Li Qiang, who attended the trilateral summit, said that China is willing to join hands with ASEAN and the GCC to “fully harness the synergy of one plus one plus one being greater than three” to share “common Asian values of peace, cooperation, openness and inclusiveness.”
This statement comes on the back of Chinese President Xi Jinping’s recent Southeast Asia tour, described as a ‘charm offensive’ at a time when the U.S.-China trade war was heating up. Although talks between Washington and Beijing have just concluded, the uncertainty that has pervaded 2025 is sufficient to force ASEAN states to forge new friendships elsewhere. Hence, the bloc’s member states have advanced negotiations on both the ASEAN Trade in Goods Agreement (ATIGA) and the ASEAN-China Free Trade Agreement 3.0 (ACFTA), both major steps toward deeper economic integration and greater supply chain resilience. Specifically, the ACFTA upgrade introduced nine new chapters on the digital economy, green economy, and supply chain connectivity, and aims to build a “China-ASEAN mega market” premised on a shared future and promoting “common prosperity and development.”
However, geopolitical positioning notwithstanding, questions remain as to whether anything substantial and concrete was achieved at the recent ASEAN Summit. For instance, Malaysia, as ASEAN Chair, had previously encouraged bloc members to take a common ASEAN stance in response to the U.S tariffs, but Vietnam, among the hardest hit in the region, sent negotiators directly to Washington, D.C., with Malaysia following suit.
In the end, the ASEAN Summit’s position was to reaffirm its commitment to refrain from imposing any retaliatory measures in response to U.S. tariffs. While individual members will proceed with bilateral negotiations with Washington, ASEAN leaders have also formed a task force to co-ordinate the regional response. Malaysian Prime Minister Anwar Ibrahim has also reached out to Trump to hold a U.S.-ASEAN Summit. Further negotiations and strategizing, rather than a hardline position, seem to be the likely approach.
Other challenges include Myanmar and the South China Sea. During the summit, there was a renewed push for the Five-Point Consensus (5PC) for resolving Myanmar’s crisis. A statement on “an extended and expanded ceasefire” was endorsed, urging all parties to build on the temporary April 2025 ceasefire following that country’s devastating earthquake the previous month. As for the more delicate South China Sea issue, the summit statement reaffirmed strong support for a legally binding ASEAN-China Code of Conduct based on international law, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS).
It will be an uphill battle, however, to arrive at a common position on the South China Sea, given that individual states have different territorial claims. The Philippines has been singularly vocal in pushing back against China’s infractions in the West Philippine Sea and is calling for ASEAN states to collectively adopt the transparency initiative it launched in February 2023 by publicly releasing photos and videos of a Chinese vessel using a military-grade laser against a Philippines coast guard ship. This transparency initiative is intended to expose China’s actions in the South China Sea, which Manila hopes will unite ASEAN around the desire to defend its territorial waters.
Other ASEAN states, including Malaysia, have been reluctant to sign on to this initiative, which it fears could lead to more aggression from China and run counter to the bloc’s preference for quiet diplomacy. At a dialogue on ASEAN maritime security in Manila in May 2025, ASEAN diplomats, think-tankers, and academics discussed common solutions for this ongoing problem, while upholding a commitment to a UNCLOS- and rules-based order. However, attendees were highly skeptical that the ASEAN-China Code of Conduct would be concluded within the next decade and doubted its effectiveness in maintaining peace and order in the South China Sea.
Considering the group’s ability to make tremendous progress on the trade front, ASEAN could benefit from a stronger and more united position on the South China Sea issue, one that would not provoke China but rather affirm that the Southeast Asian region needs long-term security and defence-related stability to see the greatest returns from its trade and economic integration.
Another major milestone at this ASEAN Summit was an announcement that the regional bloc will admit its newest member, Timor Leste, this year. With Timor-Leste soon becoming a full member of the bloc, ASEAN will now include every sovereign state within the geographic boundary of Southeast Asia. This could support and expand ASEAN’s commitment to multilateralism, as Timor-Leste is a member of the Community of Portuguese Language Countries, which, notably, includes Brazil.
While there was initially some concern about Timor-Leste’s capability and readiness, as a small nation, to join ASEAN, regional neighbours have contributed to its institutional and diplomatic readiness. For example, in the past, Malaysia, Indonesia, and the Philippines have contributed to Timor-Leste’s civil service training and technical capacity. This is therefore a historic moment for ASEAN, welcoming the entry of a nation that fought hard to achieve its independence. Further, Timor-Leste is one of only three Southeast Asia member states — the others being Indonesia and the Philippines — that are part of the international Open Government Partnership platform, a transparency initiative that promotes accountability, inclusion, and participation, and could encourage other ASEAN member states to participate and reinvigorate their commitments to transparency and accountability.
These developments are significant to ASEAN’s dialogue partners, including Canada, the European Union, and other Western powers. As global trade uncertainties continue, ASEAN will present itself as a hub in an increasingly multipolar world. As the ASEAN-GCC-China Summit shows, ASEAN can harness its ability to bring together communities across the globe.
For Canada, this is an opportunity for its new prime minister, Mark Carney, to deepen relationships with the region. In October 2024, then-prime minister Justin Trudeau joined ASEAN leaders at an ‘ASEAN-Canada Special Summit on Enhancing ASEAN Connectivity and Resilience.’ In May 2025, at the 22nd ASEAN-Canada Dialogue, held in Laos, Canada reaffirmed its commitment to its strategic partnership and co-operation across areas such as maritime co-operation, cybersecurity, and combating transnational crime. As the Joint Declaration on ASEAN-Canada Enhanced Partnership (2021-2025) expires at the end of this year, Canada’s leaders should anticipate the adoption of the new ASEAN-Canada Plan of Action for 2026-2030, especially in the run-up to the partner summit in late 2025.
It should be noted that the U.S. is still a major player in ASEAN’s foreign direct investment (FDI), accounting for 32 per cent of the total as of 2023. Because of this, and because of other geopolitical and geoeconomic factors, ASEAN will not shut its doors on negotiating on tariffs or anything else trade-related with the U.S. However, as the U.S. has shown itself to be an increasingly unpredictable and unreliable partner, Canada is well-placed to position itself differently.
Canada can do so while reaffirming its commitment to a rules-based international order, which ASEAN also supports. For decades, Canada’s international position has been tied so closely to that of the U.S. that for partners outside of North America, the two countries have been nearly indistinguishable. For the benefit of Canada’s international relations, it should brandish its own credentials, standing strong on its foundations as a middle power, and foster stronger and deeper relationships with ASEAN through various means. Encouraging ASEAN’s commitment to multilateral free trade, international rules-based order, and strategic neutrality is one way to do so; introducing concrete strategic pathways to develop economic and trading relationships would accelerate this further.
• Edited by Erin Williams, Director, Programs, Vina Nadjibulla, Vice-President Research & Strategy, and Ted Fraser, Senior Editor, APF Canada
