Escalating Trade Tensions and ramification to ASEAN-5 Member Countries

The 2018 US-China trade war, caused global economic uncertainty and weakened international trade, especially impacting ASEAN member countries. Concurrently, the Japan-South Korea trade conflict, disrupted the global value chain. Hence, this study aims to investigate the impact of these trade wars on ASEAN through both quantitative and qualitative approaches. First, this study employs GLS regression to analyze the effect of trade wars on total trade performance among ASEAN-5 member countries. The results indicate that US-China trade war negatively impact ASEAN-5 trade performance, whereas increased Japan-South Korea trade conflicts are associated with higher total trade levels in ASEAN-5. Our results are further supported by focus group discussions with senior officials from the ASEAN Secretariat, who indicate that ASEAN-5 have less direct trade exposure to South Korea and Japan compared to the US and China, mitigating the immediate impact of the Japan-Korea trade conflict. These findings highlight the significance of geopolitical factors in shaping trade patterns.