April 3, 2025—President Trump holds a reciprocal tariffs chart at the White House. Image Source: Chip Somodevilla (Getty Images)

While the administration frames the tariffs as an effort to “rebalance American trade,” their selective application and sudden recalibrations reveal a more strategic use of economic levers to reinforce geopolitical priorities.

A Calculated Tariff Strategy

The tariffs—initially announced last week, in early April—targeted dozens of U.S. trading partners, with country-specific increases tied loosely to trade imbalances, national security concerns, and alignment with American strategic interests. Vietnam and Thailand, for instance, faced punitive rates nearing 49%, reflecting their lack of close defense cooperation with the U.S. In contrast, Malaysia (24%) and the Philippines (18%) were assigned comparatively moderate tariffs, consistent with their roles as U.S. security and trade partners.

However, in a partial reversal announced on April 9, the Trump administration imposed a 90-day pause on these country-specific tariffs, reducing all rates temporarily to a flat 10%—with the notable exception of China, whose tariffs increased to 125%. This pause underscores a main premise: these tariffs are not static trade policy, but adaptable tools for diplomatic leverage. Their rapid adjustment, devoid of clear criteria, reinforces the perception that economic policy is being wielded selectively to reward allies and pressure rivals. As the U.S. administration itself noted in the original Executive Order, countries that take “significant steps to remedy non-reciprocal trade arrangements and align sufficiently with the United States on economic and national security matters” may be granted tariff relief.

Regional Ripples and Economic Recalibration

This tactic has sent ripple effects through ASEAN, where governments are reevaluating both their exposure to U.S. markets and the durability of their strategic ties. While the 90-day pause offers temporary relief, its transience serves only to heighten uncertainty. As Dr. Jayant Menon of the ISEAS-Yusof Ishak Institute observed, “These tariffs may look like economic tools, but they’re really diplomatic ones.” His assertion rings especially true in the case of countries spared the harshest penalties—typically those seen as aligned with U.S. geopolitical interests.

The pause has not eliminated the threat; rather, it has bought time. Malaysia and the Philippines, while breathing a temporary sigh of relief, must now prepare to negotiate under implicit pressure. Prime Minister Anwar Ibrahim has already called for a coordinated ASEAN response, and regional finance ministries are scrambling to model potential outcomes once the 90 days expire.

Malaysia: Energy Losses and Strategic Caution

In Malaysia, particularly in Sabah, the impact has been most acute in the energy sector. Although U.S. tariffs have had minimal direct effect on Sabah’s exports, the resulting global market volatility has driven down oil prices—Sabah’s principal source of revenue.

While Malaysia has avoided the highest tariff levels, experts suggest this reflects strategic U.S. interests. “Maintaining cordial relations with Malaysia is a strategic choice for the U.S.,” said a Southeast Asia expert from the University of Malaya. “Disrupting trade could destabilize regional supply chains or exacerbate maritime disputes.”

This volatility has also complicated ongoing sovereignty narratives. The heirs of the Sultanate of Sulu continue to seek U.S. support for their historical claim over Sabah. But the United States, focused on maintaining a stable relationship with Malaysia, is unlikely to entertain claims that could destabilize a regional partner. In a context where economic stability is paramount, reopening territorial disputes is not only diplomatically unviable—it’s strategically reckless. For the 20,000 Sabahans tied to oil and gas employment, safeguarding economic continuity outweighs the politics of historical grievances.

Maintaining cordial relations with Malaysia is a strategic choice for the U.S.

Philippines: Navigating Economic Dependence and Diplomatic Silence

In the Philippines, the U.S. tariffs have reignited debates about economic dependence. Although initially assigned an 18% tariff, the country now benefits from the temporary reduction to 10%. This reprieve reflects its long-standing military alliance with the U.S.—but also reveals a deeper dynamic. As Philippine officials move to cut tariffs on American goods in return, a former diplomat noted, “The U.S. consistently pursues its interests first. Support for the Philippines often comes with strings attached.”

The challenge for Manila lies in deciphering the next move. Meanwhile, the southern region of Sulu watches closely. Long marginalized and historically connected to Sabah, Sulu’s political actors have limited leverage in the face of a U.S. administration committed to its own self-interests. Any overt support for the Sulu claim would likely undermine relations with ASEAN alliances. Given regional sensitivities and economic uncertainty, Washington is expected to maintain its position of strategic silence toward claimants without formal recognition.

Strategic Selectivity: A Familiar Pattern

Trump’s tariff policy reflects a broader pattern in American foreign policy: the use of economic tools to reinforce geopolitical priorities. Countries seen as cooperative—such as Malaysia and the Philippines—face reduced penalties and reprieves. In contrast, China continues to face broad, punitive tariffs, reflecting its status as both a commercial competitor and strategic rival.

This approach shows how tariffs are being used not just to address trade imbalances but to shape regional power dynamics. It also helps explain why the U.S. avoids entanglement in complex sovereignty disputes like the Sabah question.

In this context, regions with unresolved territorial claims—such as Sulu—are finding themselves sidelined with fewer avenues for international support. As ASEAN nations recalibrate in response to shifting trade, regions like Sulu—while historically significant—must come to terms with a sobering reality: legacy alone does not command international leverage. In the current geopolitical landscape, it is modern strategic alliances and economic cooperation—not ancestral claims—that shape recognition and relevance.

REFERENCES

Bloomberg News. (2025, April 7). Philippines mulls cutting tariffs on US products, trade chief says. https://www.bloomberg.com/news/articles/2025-04-07/philippines-mulls-cutting-tariffs-on-us-products-trade-chief

Foreign Policy. (2025, April 7). Trump’s tariffs cause panic in Southeast Asia. https://foreignpolicy.com/2025/04/07/trump-tariffs-asean-southeast-asia-free-trade/

Masidi, M. (2025, April 5). Sabah faces revenue hit as oil prices slump, says Masidi. The Star. https://www.thestar.com.my/news/nation/2025/04/05/sabah-faces-revenue-hit-as-oil-prices-slump-says-masidi

Politico. (2025, April 8). ‘We are all waiting for a reply.’ Countries say White House hasn’t responded on tariff talks. https://www.politico.com/news/2025/04/08/trump-tariffs-talks-countries-00279959

Reuters. (2025, April 3). The tariff levels Southeast Asia faces under Trump plan. https://www.reuters.com/markets/asia/tariff-levels-southeast-asia-faces-under-trump-plan-2025-04-03/

The Borneo Post. (2025, April 5). Sabah fears major revenue loss as US tariffs crash oil prices. https://www.theborneopost.com/2025/04/05/sabah-fears-major-revenue-loss-as-us-tariffs-crash-oil-prices/

The Borneo Post. (2025, April 6). US tariffs have little direct impact on Sabah exports. https://www.theborneopost.com/2025/04/06/us-tariffs-little-impact-on-sabah/

The Guardian. (2025, April 9). Trump announces 90-day pause on tariffs for most countries, spares allies from full brunt. https://www.theguardian.com/business/live/2025/apr/09/stock-share-markets-us-china-trade-trump-tariffs-business-news-live-updates