China becomes dominant external power in Southeast Asia ahead of the US

Tariffs, aid cuts, and visa limits tied to Donald Trump’s foreign policy are weakening U.S. standing in Southeast Asia, while China’s pull keeps growing, the Sydney-based Lowy Institute said in a report released Wednesday.

The think tank ranks Washington behind Beijing as the region’s most influential outside partner, pointing to “patchy” U.S. diplomacy. China, it says, has built a steady presence through trade, investment, and regular high-level outreach across capitals in the 10-member bloc and its neighbors.

“China is everywhere in Southeast Asia,” the report says in an assessment that weighs partners on trade, investment, and defense. “The United States, by contrast, shows two differing faces in Southeast Asia.”

“The global policies of the Trump administration on tariffs, aid cuts, and international education are only likely to accentuate the disconnect between the United States and these countries,” it adds.

China leads regional commerce, taking 20% of Southeast Asia’s exports and supplying 26% of its imports, compared with 16% for the United States, according to the study. Bloomberg reports the widest gap shows up in Cambodia, Laos, and Myanmar, where China’s influence is between 60% and 150% higher than that of the United States.

U.S. remains strong only in select defense ties

U.S. sway is firmest in long-time security partners like the Philippines and Singapore, where defense cooperation anchors the relationship. But across mainland Southeast Asia, the study finds Washington is increasingly viewed as peripheral to day-to-day economic priorities.

It attributes the drop to Trump-era tariffs, stricter visa policies, and an 83% reduction in foreign aid. The levies that began in April hurt economies across the region; even after July adjustments, Laos and Myanmar continued to face 40% duties, as earlier reported by Cryptopolitan.

Trump’s second term has also seen the dismantling of USAID alongside deep funding cuts and layoffs at organizations long seen as pillars of U.S. soft power in Asia, notably the U.S. Agency for Global Media, which oversees Voice of America and Radio Free Asia.

The study concludes that Beijing has expanded its reach through a mix of commerce, investment, and diplomacy in a region once led by Washington. At the same time, Southeast Asian governments are spreading risk by widening partnerships to avoid dependence on a single power.

“China leads the United States by a clear margin,” said Susannah Patton, Lowy’s deputy research director. “But we also demonstrate the importance of neighborhood relationships among Southeast Asian countries, which means that China has not drawn the region into an uncontested sphere of influence.”

U.S. pushes to rebuild trade ties with ASEAN

Separately on Wednesday, U.S. Trade Representative Jamieson Greer said the United States expects to finalize trade deals with more Southeast Asian countries in the coming months. He spoke in Kuala Lumpur at the start of talks with economic ministers from the Association of Southeast Asian Nations, where export-reliant members voiced concern over U.S. tariffs.

Most countries in the bloc are facing tariffs of 19% or 20%. Laos and Myanmar are subject to a 40% rate, whereas Singapore’s rate is 10%. Greer said negotiations on the levies have moved forward, with some agreements already announced and others to be completed “in the coming months or even weeks, for some.”

Washington has said it reached agreements with Indonesia and Vietnam on tariffs, though both countries say terms are still being finalized. Vietnam, the world’s sixth-largest exporter to the United States, risks losing $25 billion a year from the 20% tariff on its goods, according to United Nations Development Programme estimates.

U.S. Trade Representative Jamieson Greer said Washington welcomes ASEAN trade but wants it “balanced and reciprocal,” in his first meeting with the bloc.

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