Key facts
- Southeast Asian nations continue to implement trade agreements with the U.S. despite a judicial ruling invalidating them.
- The U.S. expects governments to abide by reciprocal trade pacts, as outlined in the 2026 trade policy agenda.
- Agreements on reciprocal trade (ARTs) were signed with Malaysia, Cambodia, and Indonesia, with framework deals in place for Vietnam and Thailand.
- The U.S. possesses leverage through its market size and security partnerships, and can use mechanisms like Section 301 investigations to enforce trade terms.
- Tariff rates vary across the region, with some countries negotiating lower duties while others face significant potential losses due to existing tariffs.
Southeast Asian nations are continuing to implement aspects of trade agreements with the United States, despite a recent judicial ruling that declared many of these pacts invalid. According to a U.S. business leader, countries are proceeding with these measures due to considerations beyond trade, such as security and the benefits of access to the U.S. market.
The U.S. Supreme Court's February 20 ruling may have invalidated most of President Donald Trump’s tariffs, but the White House maintains expectations that governments will adhere to reciprocal trade agreements. This stance is reflected in the U.S. trade policy agenda for 2026, which states that the administration expects to continue working with partners to implement these deals, even as the tools for maintaining tariffs are subject to judicial review.
These agreements on reciprocal trade (ARTs) were established following the imposition of significant tariffs on foreign imports. The U.S. has signed ARTs with Malaysia, Cambodia, and Indonesia, and has framework deals with Vietnam and Thailand that it aims to upgrade. The current U.S. tariff rate is 10 percent and could increase to 15 percent, a measure that can be enacted under Section 122 of the 1974 U.S. Trade Act to address balance-of-payments deficits or currency depreciation.
Analysts suggest that governments will likely continue to comply with these agreements, potentially due to security considerations or a prior acceptance of the terms despite the risk of legal challenges. For instance, the ART with Indonesia includes zero import duties on a substantial list of Indonesian products entering the U.S. While some nations, like Malaysia, are seeking clarity on recent U.S. legal and policy developments, the U.S. retains other enforcement mechanisms, including Section 301 investigations into unfair trade practices.
Experts believe that the U.S. market's size and its security partnerships provide significant leverage. Any attempt by governments to use the Supreme Court ruling to renegotiate or abandon trade deals could result in harsher retaliation from the Trump administration. The administration reportedly views the ruling as a minor setback, with officials prepared to use different legal authorities to maintain tariff policies.
Earlier, U.S. Trade Representative Jamieson Greer had indicated that the U.S. expected to finalize trade deals with more Southeast Asian countries in the months leading up to September 2025. At that time, tariff rates for most of the region were set at 19 percent and 20 percent, with higher rates for Laos and Myanmar, and a 10 percent rate for Singapore. Agreements were being finalized, with some expected within weeks. Indonesia and Vietnam had already negotiated deals for lower tariffs. However, Vietnam, a major exporter to the U.S., faced significant annual losses due to a 20 percent tariff, making it the most affected economy in the region according to UN estimates. The bloc might adopt a more unified stance amid concerns over potential steeper tariffs on key industries like semiconductors.