Lawmakers and witnesses warn U.S. tariff moves and trade gaps risk ceding economic ground in ASEAN

Ranking Member Barra and witnesses told the subcommittee that U.S. trade measures and uneven economic engagement risk pushing ASEAN countries closer to China unless Washington offers predictable, reciprocal economic partnerships.

“I wanna thank the witnesses for being here on what is the timely conversation in an important region, Southeast Asia,” Ranking Member Barra said, stressing that the choices Congress makes about trade and partnerships matter to a region of “more than 650,000,000 people.”

Panelists described immediate political and economic consequences from recent U.S. tariff moves and aid pauses. “ASEAN countries stood to benefit directly from these diversification efforts … But the U.S. imposition of tariffs has created anger and confusion in ASEAN regarding their relations with The United States,” Barbara Weisel, nonresident scholar at the Carnegie Endowment for International Peace, testified. She said tariffs have driven some countries to accept closer economic ties with China and recommended a strategy based on “carrots, not just sticks.”

Key economic themes and proposals from testimony: - Trade architecture: Witnesses criticized the withdrawal from the Trans‑Pacific Partnership and said the Indo‑Pacific Economic Framework (IPEF) lacked meaningful market access. Weisel recommended pursuing targeted, modular agreements that include market access in key sectors and layering commitments to create a regional framework. “IPEF … was in my view more of a political agreement than an economic agreement,” Weisel said. - Digital trade: Weisel and Dr. Lynn Kuok urged the U.S. to lead on digital‑trade rules before alternative models become entrenched. Kuok warned that “once those norms, the technology and the norms are embedded, it becomes quite difficult to reverse.” - Critical minerals and supply chains: Witnesses noted China’s dominant position in refining and processing for metals important to batteries and defense. Weisel pointed to Japan’s approach to diversifying supplies as a model and urged negotiating trusted critical‑minerals agreements with select ASEAN partners. - Development finance and aid: Members and witnesses urged full funding and reauthorization of the U.S. International Development Finance Corporation (DFC), reauthorization of the Export‑Import Bank, and consistent USAID funding. Representative Amo of Rhode Island noted, “In the 3 and a half years of the Biden administration alone, the DFC advanced over $1,400,000,000 in private sector investments in the ASEAN countries.”

Panelists emphasized predictability and reciprocity. Several members and witnesses said ASEAN countries want trade and investment arrangements that provide market access in return for policy commitments. They warned that unilateral U.S. tariff measures and abrupt aid changes undermine that trust.

The subcommittee asked witnesses for follow‑up materials and signaled interest in drafting legislation or funding proposals to implement several of the ideas discussed, including digital trade chapters, customs cooperation initiatives, targeted critical‑minerals agreements, and sustained funding for DFC and Ex‑Im Bank.