Council on Foreign Relations | Joshua Kurlantzick
The recent Trump-Xi summit in Beijing, despite producing modest substance, signaled that the U.S.-China bilateral relationship had not completely derailed, a critical point for Southeast Asian states. However, regional states were largely disappointed, particularly regarding the Iran war and Strait of Hormuz. China did not commit to keeping the Strait open, and Iran continues collecting fees, exacerbating Asia's energy crisis, which is pushing regional states into recession and causing widespread anger. This situation also prompts Southeast Asian states to reconsider tolling the Strait of Malacca, risking instability. Furthermore, Trump's amenable approach to China and the “constructive strategic stability” framing worry regional states like Indonesia and Japan, fearing they will be cut out of discussions on issues like the South China Sea and Taiwan. The lack of progress on AI and rare earth export controls also leaves regional companies in uncertainty, compounding economic woes already worsened by the Iran conflict, with the UN Development Program projecting $299 billion in economic losses for the Asia-Pacific.
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