ASEAN nations have long been preparing to abandon the US dollar. The alliance, which encompasses ten nations, has lately stressed intracultural unity to bolster its collective strength.
With Trump’s latest announcement concerning laying tariffs on countries moving away from the dollar, perhaps the clue of the move was already in the air for ASEAN nations to sense in the long haul. Here’s how.
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ASEAN Possible Counter Plan
ASEAN nations have always been called strong, resilient nations, a bloc capable of developing groundbreaking alternatives and solutions. The bloc can successfully be labeled as visionary, as it has always propagated the idea of multipolar currencies or bolstering local currencies on a global scale.
Within the multipolar narrative, several ASEAN nations revealed their intentions to deploy trade in local currencies to help their local money gain worldwide momentum. The steps to move away from the US dollar were always in the mix, with a subtle hint of a de-dollarization narrative.
At the same time, ASEAN’s closeness with China and increased usage of the Yuan in the trading sector were already suggestive of the alternate scenarios the bloc could explore soon.
However, one of the most significant coincidences happened when Indonesian PM Joko Widodo shared his stance on the fragile US dollar. In one of his meetings, Widodo urged that ASEAN promote local currencies.
He later explained that the USD is no longer dependable in the long run. With the US dollar constantly weaponized, Widodo would like to shield Indonesia from possible geopolitical disruptions.
Moving away from Western payment systems is necessary to protect transactions from “possible geo-political repercussions,” Widodo said.
Serendipitous as one may note, these incidents had long been brewing before Trump officially announced his 100% tariff plan. As ASEAN continues to bolster its local currency trade while forging close ties with China and BRICS, they may already have a plan. This plan may eventually help the bloc safeguard itself if Trump’s tariff plan comes into action shortly.
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Trump’s Tariff Plan: Will It Truly Work?
Trump’s tariff plan has been a source of constant discussion lately. Bloomberg’s John Micklethwait recently asked Trump about the repercussions of this tariff plan. The Bloomberg journalist told Trump how this plan may erode the US dollar’s prestige. This development may cause great distress to the US economy and its trade order.
“That is going to have a serious effect on the overall economy,” Micklethwait said.
However, Trump stayed adamant and responded that it would be a positive change for the USD.
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“It must be hard for you. To spend 25 years talking about tariffs as being negative. And then have somebody explain to you that you’re totally wrong.” Donald Trump shared.