ASEAN's unity is being tested in the age of economic warfare

For Singapore, the current tariff shock is not just a crisis to weather, it could be a catalyst for change.

The 2025 tariff shockwaves present ASEAN with its gravest unity test since the 1997 financial crisis—and its greatest underlying opportunity.

In the face of US President Donald Trump's "Liberation Day" tariffs and global affairs management, major rifts in ASEAN’s regional solidarity had emerged. 

Despite the bloc’s enshrined consensus-driven approach, its members had individually raced to secure bilateral arrangements — a worrying outcome for ASEAN’s collective cohesion. 

Unity must now be restored against the pull of individual survival instincts that have set members adrift. 

With the conclusion of the 47th ASEAN Summit, the bloc now carries the mandate to lead towards concrete integration, safeguarding its strategic autonomy and economic leverage.

How it responds will be vital for its future.

The anatomy of division
Unlike the European Union's supranational authority, ASEAN’s consensus and non-interference principles often impede collective decision-making. Trump’s successive tariff pauses only intensified the frenzy, as the bloc’s export-oriented economies scrambled for bilateral deals with Washington to safeguard their market access.

For Singapore, the ripple effects are keenly felt. Its open economy: exports, trade flows, wealth management, supply-chain nodes are vulnerable to the structural shift away from multilateral trade liberalisation. The 2025 forecast for Singapore was upgraded to 1.5 % to 2.5 % growth, yet the warning came bluntly that “tariff uncertainty” could yet reverse the momentum.

Such ‘every-states-for-themselves’ dynamics expose ASEAN's underlying institutional weakness: collective action can be easily compromised. In other words, Singapore cannot simply sit on the sidelines. If ASEAN falters, Singapore risks both direct and systemic shock.

Formulating the right move for ASEAN
Despite dramatic headlines surrounding de-dollarisation, these efforts remain ‘practical experimentations’. 

US dollars still comprise 58% of disclosed foreign reserves globally. Other major aces up the American sleeves, such as threats of exclusion from SWIFT, will also prolong dollar hegemony against alternative currencies like the renminbi for the foreseeable future. 

Caught between the US’ increasing protectionism and BRICS’ dollar decoupling ambition, ASEAN’s path forward must be grounded in pragmatism to insulate its economic leverage through stronger, more self-sufficient regional financial frameworks.

In light of the latest tariff shocks, ASEAN cannot afford to invest in grandiose currency replacement schemes. Instead, it must continue advancing the Regional Payment Connectivity (RPC) initiative.

For instance, the RPC is gaining momentum. 

Singapore is a participant in the link-up of national QR/real-time payment systems, such as Singapore’s PayNow, across the region and offering lower-friction cross-border payments and less reliance on dollar-centric intermediation.

On the digital front, Singapore is also actively shaping the region’s agenda. Singapore supports turning ASEAN into “a single production zone, a single investment zone” by lowering both tariff and non-tariff barriers.

Collectively, these efforts strategically promote more interoperable financial ecosystems — sustain the momentum for localised currency connectivity and systemic integration within ASEAN.

Strategic autonomy through multilateral partnership and dialogue
Amidst geopolitical divergence, ASEAN must secure its regional autonomy through fostering multilateral dialogues.

For Singapore and ASEAN alike, the current tariff shock is not just a crisis to weather, it could be a catalyst for change. If ASEAN continues as a loose grouping of convenience, its external vulnerabilities will deepen. 

However, through digital payment architecture, intensified regional trade links, and strengthened multilateral platforms, the bloc may finally transform from a reactive to a proactive one.

To transcend traditional bilateral negotiation approaches and deepen regional economic integration, ASEAN stands to gain from advancing its ASEAN Trade in Goods Agreement (ATIGA) and Digital Economy Framework Agreement (DEFA) negotiations to establish supply chain and digital resilience. 

These steps carry exceptional promises for ASEAN’s strategic autonomy on the global stage, as the bloc continues to impartially engage with global powers, without co-opting into bilateral alliances amid geopolitical tension.

Nonetheless, the challenge of devising institutional mechanisms conducive towards long-term unity remains. 

The path forward: Integration through crisis
Singapore’s position demands acknowledgement that ASEAN's traditional consensus-building approach has reached its limits. They are in a position to help build a resilient, integrated ASEAN, or face an era of fragmented trade, diminished leverage and heightened vulnerability. In this age of economic warfare, unity is not optional, it’s a strategic necessity.

The bloc cannot achieve strategic autonomy through diplomatic declarations alone. It requires operational integration that could shift regional mindset from costly fragmentation toward beneficial unity.

This means accelerating key concrete initiatives already underway such as completing ATIGA negotiations by March 2025, operationalising the $1.3t (US$1t) digital economy framework and expanding payment connectivity to encompass the full range of trade finance. 

Most critically, it means creating institutional mechanisms that reward collective action and penalise unilateral defection.

Crisis as catalyst
The tariff crisis of 2025 has revealed both ASEAN's vulnerabilities and its potential. 

Transformational integration is key to navigating global divergence and geopolitical uncertainties. The choice is stark: continue as a loose association of convenience, susceptible to external pressure, or evolve into an integrated economic bloc capable of mobilising collective bargaining tools.

The question isn't whether ASEAN can survive the current crisis, but whether it can use this crisis to finally become what its founders envisioned: a unified regional power capable of shaping rather than merely reacting to external developments.

However, ASEAN has both the economic foundation and the external pressure necessary to forge unity. The window for this transformation is narrow, and the stakes couldn’t be higher. But with Singapore’s steady hand and ASEAN’s shared determination, this crisis could yet become the moment the region finds its collective strength.