While Canadians will no doubt be sighing a breath of relief at having been given a temporary reprieve from Donald Trump’s tariff threats, this will also be tempered by uncertainty about what comes next. It’s an issue that the world is watching – including in Southeast Asia.
With Trump having come to view tariffs as a mechanism to assert dominance over states, he may very well choose to double down on threatening tariffs in the near future in order to make further demands. He’s flagged broader tariffs on steel and aluminium, with Canada the largest source of US steel imports. Most troublingly, Trump may see tariffs as a way to coerce Canada into becoming America’s “51st state”, with Trump having made known his desire for American expansion. As noted by Professor Roland Paris for Chatham House, “there is a sober realisation in Ottawa that this episode may be the prelude to four years of threats, coercion, and chaos”.
In light of new threats to not only its economy but its very sovereignty, the most obvious protection for Canada would be to diversify its international partnerships. While Canadian foreign policy has long been influenced by Euro-Atlantic ties, in recent years Canada has also sought to build up a presence in the Indo-Pacific. This could be gleaned from Canada’s Indo-Pacific Strategy (IPS) released in November 2022, which seeks to provide the blueprint to strengthening Canada’s footprint in the region.
In particular, the ten countries of the Association of Southeast Asian Nations (ASEAN) should warrant attention from Ottawa as a broader market. The bloc represents the world’s fifth-largest economy, with a combined GDP of US$3.3 trillion in 2021, characterised by high growth rates and an expanding middle class. Collectively, ASEAN represents Canada’s fourth-largest merchandise trading partner, with total merchandise trade between Canada and ASEAN reaching CA$40.7 billion in 2021. Analysts have noted that ASEAN’s growing economies serve as ready markets for Canadian agriculture, mineral goods, and cleantech.
In November 2021, ASEAN and Canada opened negotiations for an ASEAN-Canada Free Trade Agreement (FTA), with talks anticipated to conclude by end-2025. In light of present circumstances, ASEAN and Canada should seek to ensure that talks are not derailed over disagreements over advanced areas such as labour, government procurement, or anti-corruption. As argued by Suryo Nugroho from the Asia Pacific Foundation of Canada, a staggered approach to the FTA may help conclude talks as expeditiously as possible. Signing an FTA would also signal both parties’ commitment to globalisation in the face of Trump’s “America First” stance.
As Canada-US ties deteriorate, Ottawa may increasingly come to appreciate the value of strategic autonomy in lieu of traditional Western-style balance-of-power geopolitics, in which smaller states are pressured to “pick sides”.
However, the benefits of fostering greater ties with ASEAN go beyond immediate economic concerns. As a fellow middle power heavily dependent on global trade, Canada shares a common interest with ASEAN in upholding the rules-based international order. In this sense, the value of ASEAN is its “centrality” to the Indo-Pacific regional order. What ASEAN brings to the table is its ability to act as an “honest broker” of a diverse group of regional players with often opposing interests. In a world marked by increasing uncertainty, ASEAN remains one of the main institutional hubs through which the norms of regional multilateral diplomacy are set.
The convening power of ASEAN centrality is something that should be recognised by Canada. However, Ottawa’s commitment to ASEAN centrality remains debatable. Canada’s IPS, for example, is criticised for largely paying lip service to the concept of ASEAN centrality. Canada’s IPS ultimately aligns closely with the US approach to the Indo-Pacific, insofar as it’s driven more by an adversarial approach to China, which the IPS dubs as an “increasingly disruptive global power”.
This puts Canada’s IPS in contrast to the more inclusive and cooperative security approach to regional order favoured by ASEAN. ASEAN states have in the past expressed discomfort in viewing the region through a zero-sum, ideologically infused, democracy-versus-autocracy lens, preferring instead broad-based engagement that avoids conflict and includes all regional partners (including China).
As Canada-US ties deteriorate, Ottawa may increasingly come to appreciate the value of strategic autonomy in lieu of traditional Western-style balance-of-power geopolitics, in which smaller states are pressured to “pick sides”. In the case of Canada, picking sides with a country that vocally wants to annex you may make little sense anyway. Canada may find that strategic autonomy can be best achieved by working through ASEAN-led regional institutions anchored by ASEAN centrality. Indeed, the network of summits and meetings overseen by ASEAN can provide Ottawa with one of the rare opportunities to engage all regional parties and hedge its bets accordingly. As such, Ottawa should seek to ensure that its implementation of the IPS is supportive of ASEAN centrality.
For ASEAN itself, Canada’s current travails should be recognised as a chilling foreshadowing of Trump’s newfound appreciation for economic coercion in the name of asserting American dominance. It is in the interests of ASEAN members that Canada - a fellow middle power and Pacific state - survives future threats of punitive assaults on its sovereignty.
After all, should Canada be forced to concede to Trump’s bullying, what’s to stop Trump targeting other smaller states as well? At the very intersection of Sino-US tensions, ASEAN remains particularly exposed to future American pressures. Both parties should recognise this convergence of interests.
