Can East Asia Lead a Peaceful Global Economic Reset?

Jomo Kwame Sundaram

East Asia, which accounts for two-fifths of the global economy, has the potential to inspire the world through peaceful, fair, and dynamic regional cooperation — particularly in light of recent US tariff threats.

Donald Trump’s Liberation Day tariff announcement on April 2 poses a serious challenge to the world economy. Dismissing it as irrational misses the deeper strategy behind it — one not just about tariffs, but about geopolitical dominance.

His move echoes his first administration’s decision to pressure Canada into arresting the Huawei founder’s daughter — widely seen as a signal in the tech cold war with China. Even before Trump, Barack Obama’s "pivot to Asia" had laid the groundwork for containing China, while simultaneously weakening the multilateral dispute resolution mechanism at the WTO.

Trump’s transactional style focuses on zero-sum calculations, ignoring the possibility of cooperative, win-win solutions. His approach prioritises shock value and quick wins, sidelining longer-term strategic thinking. He avoids multilateral negotiations in favour of bilateral deals where US leverage is stronger, undermining collective bargaining.

ASEAN, founded in 1967, emerged despite internal disputes. Malaysia had clashed with all founding members at some point, and by 1965, Singapore had seceded from Malaysia. Yet ASEAN eventually found common ground and declared Southeast Asia a Zone of Peace, Freedom and Neutrality (ZOPFAN) in 1973.

However, neutrality remains under pressure. While the Philippines expelled US military bases by the 20th century’s end, it now hosts 11 bases — four of them facing Taiwan. Meanwhile, Global North powers continue asserting military influence in the South China Sea.

Worse, several regional leaders have made questionable concessions to the US, possibly in return for leniency in personal legal matters.

The 1955 Bandung Conference, which gave birth to the Non-Aligned Movement, remains relevant in today’s polarised world. Despite celebrating the defeat of Nazi Germany, Europe now appears committed to a prolonged proxy war in Ukraine.

Ironically, military interventions since the Cold War now exceed those during it. Many in the Global South see the world not as unipolar, but multipolar — and wish to stay unaligned.

Major Western powers have steadily sidelined the UN, paying lip service to the Charter while undermining its peacekeeping credibility. ASEAN cannot lead international peacemaking, but it can amplify a principled voice for peace, neutrality, and cooperation.

As the global economy stagnates — largely due to Western policy failures since 2008 — East Asia’s ASEAN+3 format (including China, Japan, and South Korea) has new relevance.

The Chiang Mai Initiative helped Asia respond to the 1997–98 financial crises through regional financial cooperation. The Regional Comprehensive Economic Partnership (RCEP) is another step toward deeper economic integration.

Yet, despite decades of rhetoric, progress on the ASEAN Free Trade Area (AFTA) remains limited. In a rare move, Japan, China, and South Korea met without ASEAN in March to respond to Trump’s new tariff threats.

Unfortunately, some ASEAN leaders still seem stuck in the mindset of signing new FTAs, rather than envisioning deeper regional cooperation.

Trump’s ambition to reshape the world order under American dominance demands more than a defensive response. East Asia must look beyond mere survival to offer a credible alternative vision for regional — and even global — economic cooperation.

While the UN system still largely serves the US, Trump demands even more control. He continues to use multilateral language — calling his tariffs “reciprocal,” for example — even while disregarding cooperative principles.

Thus, East Asia faces a clear choice: passively react or actively lead. The time to go beyond “business as usual” is now.