“This is our problem now, not China’s,” an Indonesian interlocutor noted amid a lengthy delay late last year on board Southeast Asia’s first high-speed railway linking the Indonesian cities of Jakarta and Bandung, which was built by China and began operation in late 2023. The comment highlights the complexities of the response to U.S.-China competition among elites and publics across Southeast Asia, which go beyond speculation about issues such as China’s responses to potential U.S. commitment shifts to the region in the second administration of President Donald Trump. Trips to 10 of the 11 Southeast Asian states in the past year suggest that a more fundamental question to watch in U.S.-China-Southeast Asia relations under Trump II is how we are likely to see asymmetric competition evolve in the coming years across key domains. This will depend not just on what Washington and Beijing do, but also the responses by Southeast Asian states and other major, middle, and small powers.
The Trajectory of Asymmetric U.S.-China Competition
U.S.-China competition in Southeast Asia is more asymmetric than symmetric, despite hype at certain points about how the actions of one may influence the other. This can be seen across all four letters of the acronym DIME – diplomatic, informational, military, and economic. Within the economic domain, for instance, China has outpaced the United States as Southeast Asia’s largest trade partner since 2009 and has an almost two-to-one advantage, but the United States has maintained a narrowing edge in investment, which is more private sector-led.
On the security side, while China’s security partnerships over the past decade or so deserve attention, the United States still outpaces China nearly four to one in metrics such as the number of military exercises, many of which are much more complex in nature. The regional challenges for Washington and Beijing are also distinct. The dominant U.S. challenge is translating its influence into sustainable commitments, while China’s long-running issue is bridging an influence-trust gap reflected across both years of polling as well as the wariness privately expressed by policymakers in more sensitive security areas.
As expected, the second Trump administration has not simply been a repeat of the first. Its initial months have raised questions about not just the future shape of U.S.-China-Southeast Asia dynamics, but also wider U.S. domestic politics and foreign policy in areas like tariff implementation and foreign assistance. At the same time, it is still early days and policy effects are still playing out on key variables like resourcing for the Indo-Pacific theater amid extra-regional conflict management as well as the direction of the U.S. economy, where fears of a downturn have clouded an impressive post-COVID 19 recovery.
As the administration takes shape, it will be important to mind the signal-noise gap between what the administration says and what actually concretizes and then sustains beyond the midterm elections at the end of 2026 and the next U.S. election in 2028. In particular, it will be critical to watch for signals in four specific areas: the U.S. commitment and value proposition; China’s evolving approach; the exercise of agency by Southeast Asian states; and the role of other regional and global actors.
The U.S. Commitment and Value Proposition in Southeast Asia
The first signal is how the United States sees its commitments in Southeast Asia as benefiting its interests and how this translates into a clear U.S. value proposition amid U.S.-China competition. The structural trend here is that the confluence of intensifying global U.S.-China competition and greater domestic scrutiny on U.S. resourcing in recent years has challenged the rising attention Southeast Asia received as a region within the more Asia-first (or Indo-Pacific-first) foreign policies of the 2000s and 2010s. As such, under both the first Trump administration and the presidency of Joe Biden, we saw more ideas emerge about how to prioritize within Southeast Asia, be it the need to focus narrowly on “swing states” like Indonesia and Vietnam or to adopt more sector-wide framings emphasizing areas like defense and artificial intelligence.
It is clear that the Trump administration is asking more of U.S. partners and is more willing to transact in certain sectors. But the extent of continuity and change in the U.S. value proposition is still unclear. A narrower focus on those regional states that are perceived to contribute the most to U.S. objectives would see more attention on security partners like the Philippines and Singapore. New policies around energy, artificial intelligence and critical minerals may also raise hopes for deals already sought by regional states, including a U.S.-Indonesia critical minerals agreement.
But there may also be greater scrutiny on countries that have been boosting ties with Washington but are nonetheless seen as advancing China’s interests with specific policies, be it on strategic infrastructure, transshipment, or human rights. This has already been clear to policymakers in countries like Cambodia, Malaysia, Thailand and Vietnam. More generally, the outlook on the three principal drivers of U.S. commitment – power, threats, and capacity – is uncertain. While some Asia hands in the administration appreciate the centrality of the Indo-Pacific, there is contestation around the extent to which U.S. policy should appreciate the reality of a multipolar region, the relative amount of attention given to China relative to other challenges, and the need for U.S. resourcing to deliver on commitments lagging since the pivot to Asia nearly two decades ago.
China’s Evolving Approach to Southeast Asia
The second signal is how China approaches the region both independently and in response to the United States. To be clear, China’s influence has been growing steadily in the region for decades under administrations of both U.S. political parties, and independent of the ebbs, flows, and imbalances in U.S. commitment. Nonetheless, some Chinese interlocutors have indicated privately and publicly that they do see a window of opportunity to accelerate advances in Southeast Asia and the wider Global South if the Trump administration is distracted from focusing on the region. Chinese officials have also been intensifying the focus on contrasting U.S. and China choices for Southeast Asian states. “It is self-evident which choice truly aligns with the interests and expectations of countries and people in this region, and which force moves against the historical trend,” China’s ambassador to ASEAN Hou Yanqi told a forum recently in one striking data point that did not go unnoticed by close regional watchers.
While this rhetoric may be headline-grabbing, how the substance of China’s approach to Southeast Asia may change is less clear. On trade, although China is playing up the inclusion of Cambodia and Laos in “zero tariff” initiatives in opposition to Trump tariffs ahead of its hosting of the APEC summit in 2026, China has trade imbalance and overcapacity issues of its own with major economies like Indonesia, Malaysia, and Thailand. Similarly, as much as U.S. aid and media suspensions may be perceived as a blow to U.S. soft power, the idea that China will fill this void should also not be taken too far. Deeper analysis has shown that Chinese state media content has a more mixed record even amid serious disinformation concerns, and statistically roughly 85 percent of Chinese development assistance is issued as debt vs. aid – the inverse of Washington’s distribution. The data points to look for in China’s advances in asymmetric competition may remain its traditionally prioritized levers of influence rather than the spaces Washington is perceived to be ceding. These include high-visibility areas like high-speed rail or digital payments, where innovation can spread quickly but not necessarily as deeply.
The Agency of Southeast Asian States
The third signal is how Southeast Asian states see and shape the value proposition the United States and China offer relative to other powers. As much as the focus may be on how a second Trump administration adjusts the Biden-era “small yard, high fence,” the contours of U.S.-China competition will ultimately be shaped not just by Chinese firewalls or U.S. fences and yards, but by the decisions made by regional states.
While Southeast Asian states are sometimes grouped collectively as smaller powers, they in fact include capable and entrepreneurial countries like Vietnam or the Philippines that are proactive about what they want from China and the United States, whether rail infrastructure projects or partnerships in areas like maritime security. In some cases, beyond the lens of U.S.-China competition, these countries are also themselves driving intraregional competitiveness and attracting international attention in their own right. The headlines in the next few months may be around short-term deals that individual countries may make, such as buying more natural gas to skirt U.S. tariffs or diversifying beyond China in critical mineral opportunities. But the longer-term question is where they see these powers fitting in their wider alignment mixes out to the rest of the 21st century.
A crucial data point in this regard is where Southeast Asian states see both the United States and China fitting into wider, decades-long development visions and strategies. For more developed countries like Singapore, the focus may be on more advanced areas like progressing investment screening mechanisms and shaping global artificial intelligence standards. For other major economies trying to escape the so-called middle-income trap, like Indonesia, Malaysia, Thailand, and Vietnam, the emphasis will be on how to leverage opportunities from both Beijing and Washington to infuse technologies and processes in national economies and innovate new ideas. (By one count, just 34 countries have escaped this trap in over half a century). Doing so will require structuring strategies in key sectors and architectures as well as reconciling longer-term national interests with shorter-term regime interests amid multiple leadership shifts. These strategies would also take into account past lessons, including the recalibration of the Just Energy Transition Partnerships amid U.S. administration transitions or China’s alleged links to Malaysia’s past 1MDB scandal.
The Rest of World’s Variable
The fourth and final signal is how other Indo-Pacific and global allies, partners, and adversaries affect the dynamics of U.S.-China competition. As regional leaders like Malaysian Prime Minister Anwar Ibrahim have noted, the dynamics that are accompanying a second Trump administration are merely another sign that the assumptions of a U.S.-led post-World War II rules-based order are being challenged in an increasingly multipolar world in ways that defy even aggregate simplifications of power centers into terms like the Global North, Global South, or Global East. As these shifting dynamics play out, the intercontinental partner mixes of Southeast Asian countries may also evolve, thereby further complicating choices away from being predominantly focused around either Beijing or Washington and its like-minded partners.
Examples have already been visible to policymakers in the region, and they may proliferate even more in the coming years. One case in point on the economic front is the interest in trade with Southeast Asia from South and North American countries. These include Chile’s interest in joining the ASEAN-led Regional Comprehensive Economic Partnership – already the world’s largest free trade agreement – or Canada trying to conclude a free trade pact with ASEAN, which the United States still lacks. The latter in particular has the potential to reshape North American supply chains which are going through yet another round of recalibration under the second Trump administration.
Another example on the diplomatic front is institutional engagement by Southeast Asian states like Thailand and Indonesia of wider global groupings like the BRICS or the OECD, where China and the United States are members, respectively, but do not drive the agenda alone. The OECD can more substantively help drive domestic economic reforms, while the BRICS serves as a way to signal decades-old support for global institutional change beyond overhyped concerns about challenging U.S. dollar dominance (the dollar still accounts for about 60 percent of foreign exchange reserves by one recent estimate, relative to about 70 percent two decades ago).
To be sure, it is still early days in the second Trump administration and its effects on the nature of U.S.-China asymmetric competition in Southeast Asia. Nonetheless, it will be critical to monitor the evolving dynamics in this space through several lenses rather than one dominated by the dizzying set of developments occurring in Washington, D.C.
