Xi Jinping has cautioned that US protectionism will “lead nowhere” as he begins a tour of Vietnam, Malaysia, and Cambodia to bolster relations with export-dependent Southeast Asian economies affected by Donald Trump’s intensifying trade war. This visit marks Xi’s first international trip of the year and follows the recent increase in US tariffs on Chinese goods, which have now reached up to 145 percent, raising concerns about a potential economic split between the world’s two largest economies and causing a sell-off in global markets.
Ahead of his visit, Xi emphasized the need for increased collaboration with Vietnam and other developing economies to foster an “equal and orderly multi-polar world.” In Vietnamese media, he stated, “Trade war and tariff war will produce no winner, and protectionism will lead nowhere,” urging the countries to “resolutely safeguard the multilateral trading system, stable global industrial and supply chains, and an open and co-operative international environment.”
Numerous Southeast Asian countries, which have significant trade surpluses with the US due to their low-cost exports, have been affected by tariffs as high as 49 percent. In recent years, global supply chains have shifted to the region, notably Vietnam, to diversify away from China and avoid US tariffs.
Although Trump has announced a 90-day reprieve on some tariffs, the ongoing trade uncertainty has unsettled Southeast Asian governments and raised questions about the US’s commitment to the region, where China is already the leading investor and trading partner for many.
Xi’s visit conveys a message that China is committed to defending the current international economic order and removing barriers, ensuring the Chinese market remains open, as explained by Dylan Loh, an assistant professor at Singapore’s Nanyang Technological University.
The uncertainty was further highlighted by the US’s announcement to exclude certain consumer tech products, including smartphones and semiconductors, from steep “reciprocal” tariffs, only for Trump to later clarify that this exemption was temporary, with a separate tariff regime to be established for the sector.
Xi’s tour, commencing in Vietnam, one of the fastest-growing economies, is followed by visits to Malaysia, the current chair of the Association of Southeast Asian Nations, and Cambodia. He will aim to gain favor with Southeast Asian leaders under pressure to curtail the transshipment of Chinese goods through their countries to bypass US tariffs.
Last week, US trade adviser Peter Navarro, writing in the Financial Times, stated a desire to hear commitments from countries like Cambodia, Mexico, and Vietnam to stop facilitating China’s evasion of US tariffs through trans-shipment.
US Treasury Secretary Scott Bessent recently met with Vietnam’s Deputy Prime Minister Ho Duc Phoc, agreeing to initiate formal trade discussions. Independent analyst Yanmei Xie noted that as Washington engages in trade negotiations with various countries, a key expectation would be to further decouple from China in exchange for US market access, describing the situation as a competition to secure alignment with “third” countries.
Spanish Prime Minister Pedro Sánchez met Xi in Beijing, and EU leaders plan a summit in China in late July. Xi expressed a desire to deepen ties with Spain amid ongoing trade tensions, highlighting that the world is experiencing unprecedented changes.
Economists have warned that the newly unveiled US tariffs could adversely affect Southeast Asian countries, with Vietnam facing a 46 percent rate and having nearly a third of its exports reliant on the US market. Consequently, Singaporean bank OCBC lowered its 2025 GDP growth forecast for Vietnam from 6.2 percent to 5 percent, though Hanoi maintains its 8 percent growth target.
Loh suggested that Southeast Asian nations would attempt to navigate a delicate balance between the competing superpowers. Despite benefiting from the manufacturing shift away from China, Vietnam still sees its larger neighbor as its primary source of new investment projects.
Singapore’s foreign minister, in an interview with the Financial Times, expressed concerns that changes in the global trade system could be “very hostile for small nations,” risking their marginalization.
Beijing, having invested significantly in Southeast Asian infrastructure, continues to nurture strong economic and trade relations in the region, even as territorial disputes in the South China Sea persist. James Char, a China expert at the S Rajaratnam School of International Studies in Singapore, noted that the uncertainty resulting from Trump’s trade policies presents Beijing with an opportunity to position itself as a reliable regional partner. However, he also acknowledged that while many developing Southeast Asian economies align more closely with China, there remains widespread apprehension about Beijing’s growing influence.
