13 February 2025
Southeast Asia is poised to be one of the most stable regions in 2025, however, it is at a crucial juncture and must navigate the uncertainty of geopolitics and global economic growth. The region weathered the repercussions of United States President Donal Trump’s first administration between 2017-2020, but the return of Trump in 2025 demands adaptability and resilience from the members of Association of Southeast Asian Nations (ASEAN).
In charting out Southeast Asia regional security outlook in 2025, there are three critical development worth scrutinising:
1) Securitisation of the South China Sea (SCS).
Tensions over overlapping claims in the SCS will remain a major security concern in 2025. ASEAN and China signed a Declaration on the Conduct of Parties in the South China Sea in 2002, but there have been no substantive developments on a Code of Conduct since. At this moment, reviving the Code of Conduct is seen to be too ambitious and most likely will not happen in 2025.
In 2012, ASEAN failed to produce a joint communique in response to China’s presence in the area and its effort in expanding the 9-dash line, a segment in the South China Sea that marks China’s territorial claim. Since then, tensions have escalated between Manila and Beijing over the disputed Second Thomas Shoal, Scarborough Shoal, Sabina Shoal and Pagasa Island. ASEAN has called on its member states to exercise restraint when approaching the SCS dispute.
Complicating the issue is the presence of the U.S. The Philippines deepened their military cooperation with the U.S. after tensions with China escalated, and resulting to Enhanced Defence Cooperation Agreement (EDCA) that allowed the U.S. to expand its rotational access to four new strategic sites surrounding The Philippines. This puts the SCS and ASEAN members at the centre of the Great Powers Competition.
Towards the end of 2024, the U.S. and China signed a military intelligence-sharing deal to address China’s presence in the SCS. A more confrontational stance towards China is likely in 2025, judging by the Trump administration’s actions during its first term, when they tried to contain China’s rise. Trump 2.0 might re-evaluate its activities in the SCS, especially if they are expensive and causing financial implications to the U.S.
2) Regional Resilience Through ASEAN Centrality
The concept of ASEAN Centrality (AC) is not new among ASEAN scholars and policy makers. Numerous campaigns have been launched to support the doctrine, which advocates for a single unified regional voice that can guide external actors to align with the interests of ASEAN. Over the years, however, the region has not been able to put the concept into practice, which is especially troublesome in responding to Chinese patrols in ASEAN member state waters.
If the Great Powers Competition intensified as expected, ASEAN Centrality could be affected. During the first Trump Administration, China utilised its China Plus One (C+1) strategy, which encourages firms to reduce manufacturing in China as a way to fight trade wars and lower costs by locating in countries with cheaper labour and operational costs. China Plus One resulted in big and multinational corporations relocating portions of their manufacturing from China to Southeast Asia. This gave ASEAN members economic leverage to realign their political, security, and economic relations with any of the consensus, the bloc cannot dictate the bilateral relations of its members. Member countries still have the liberty to deepen or sever ties with other nations. As a result of the U.S.-China rivalry, ASEAN has become more polarised than before.
To weather the complexities of 2025, Southeast Asia should be resilient, adopting strategic foresight and agility in its regional policymaking. ASEAN Centrality should be at the forefront of this resilient approach to ensure that the region sustains its voice. It is also important to note that multi-polarity has replaced unipolarity in the world order. Like-mined nations are forming blocs that are mutually beneficial. This change represents a risk to ASEAN, whose members could choose new alliances outside of the region.
3) Adapting to Trump 2.0
There is a high likelihood that the second Trump administration will be similar to the first, which means the return of American isolationism and protectionism. Trump 1.0 showed no interest in multilateralism, withdrawing from the Trans-Pacific Partnership (TPP) and not attending the East Asia Summit (EAS). Many have predicted that outgoing President Joe Biden’s Indo-Pacific Economic Framework for Prosperity (IPEF) will also be slashed by the Trump administration.
Trump has advocated for new tariffs against key trading partners, announcing on social media that he plans to impose a 25% tariff on all products from Canada and Mexico and a further of 10% on Chinese products. In 2017-2020 administration term, he imposed tariffs on more than US$360 billion worth of goods from China, mostly on steel and aluminium.[i] This policy will have negative and positive impacts on ASEAN.
Chinese firms will shift more of their production to Southeast Asia to enjoy lower tariffs, and this will attract more investment and create more employment for the region. During Trump 1.0, Malaysia, Thailand and Vietnam received extra investment when firms relocated some of their operations away from China.
If Trump incentivises American corporations to reinvest domestically, however, this will have a negative impact. Between 2012 to 2021 total U.S. Foreign Direct Investment amounted to US$346 billion[ii], and in 2023 alone, U.S. FDI into ASEAN was recorded at US$74.36 billion.[iii] This number is expected to decline if Trump’s tariff hikes and localisation policies are enforced, luring companies to return to U.S. soil for manufacturing. Goods imported into the region will also be pricier to accommodate tariff hikes, especially if any of the supply chain involves U.S. or Chinese manufacturing.
Southeast Asia is still a relatively stable and sustainable region. Although it is sandwiched between rival powers, the region has not seen serious conflict, but polarisation remains a risk to ASEAN. Measures need to be taken to address the issue.
[i] Stein, J (2025). Trump Aides Ready ‘Universal’ Tariff Plans – with one key change, https://www.washingtonpost.com/business/2025/01/06/trump-tariff-economy-trade/
[ii] Cyrill, M (2024). Southeast Asia’s Balancing Act in a Second Trump Presidency, ASEAN Briefing https://www.aseanbriefing.com/news/southeast-asias-balancing-act-in-a-second-trump-presidency/
[iii] Ibid.
