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; Wendra, Hartono

doi:2025.40.3.475

The Journal of Economic Integration 2025 September;40(3) :475-495.
DOI: https://doi.org/10.11130/jei.2025004

Escalating Trade Tensions and ramification to ASEAN-5 Member Countries

Mui-Yin Chin^1,2, Sheue-Li Ong^2,3,4, Lee-Peng Foo¹, Sukardi Kodrat David⁵, Basauli Tambunan Damelina⁵, Hartono Wendra⁵

¹Tunku Abdul Rahman University of Management and Technology, Kuala Lumpur, Malaysia
^1,2Tunku Abdul Rahman University of Management and Technology, Kuala Lumpur, Malaysia / University of Johannesburg, Johannesburg, South Africa
^2,3,4University of Johannesburg, Johannesburg, South Africa / Universiti Malaya, Kuala Lumpur, Malaysia / Guangxi Minzu University, Nanning, China
⁵Universitas Ciputra Surabaya, Jawa Timur, Indonesia

Corresponding Author: Mui-Yin Chin ,Email: chinmy@tarc.edu.my

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.

JEL Classification

F10: General
F13: Trade Policy; International Trade Organizations
F14: Empirical Studies of Trade

Keywords: Trade Wars | US-China | Japan-South Korea | Trade Performance | ASEAN-5