Escalating Trade Tensions and ramification to ASEAN-5 Member Countries

Chin Mui-Yin, Ong Sheue-Li, Foo Lee-Peng, David Sukardi Kodrat, Damelina Basauli Tambunan and Wendra Hartono
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Chin Mui-Yin: Tunku Abdul Rahman University of Management and Technology, Kuala Lumpur, Malaysia / University of Johannesburg, Johannesburg, South Africa
Ong Sheue-Li: Tunku Abdul Rahman University of Management and Technology, Kuala Lumpur, Malaysia / University of Johannesburg, Johannesburg, South Africa
Foo Lee-Peng: University of Johannesburg, Johannesburg, South Africa / Universiti Malaya, Kuala Lumpur, Malaysia / Guangxi Minzu University, Nanning, China
David Sukardi Kodrat: Universitas Ciputra Surabaya, Jawa Timur, Indonesia
Damelina Basauli Tambunan: Universitas Ciputra Surabaya, Jawa Timur, Indonesia
Wendra Hartono: Universitas Ciputra Surabaya, Jawa Timur, Indonesia

Journal of Economic Integration, 2025, vol. 40, issue 3, 475-495

Abstract: 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.

Keywords: Trade Wars; US-China; Japan-South Korea; Trade Performance; ASEAN-5 (search for similar items in EconPapers)
JEL-codes: F10 F13 F14 (search for similar items in EconPapers)
Date: 2025
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