In the bustling, air-conditioned halls of Kuala Lumpur’s convention center, the 2025 ASEAN Summit unfolded from October 27 to 29, drawing in world leaders, trade ministers, and a throng of journalists eager to catch every diplomatic nuance. While the summit’s official theme was “sustainability and inclusivity,” the real drama played out in the shadow of great-power rivalry—namely, the evolving contest between the United States and China for influence over Southeast Asia’s economic future.
According to Foreign Policy, the defining feature of this year’s summit was the cautious progress in U.S.-China trade talks. On the sidelines, negotiators from both countries edged toward de-escalation, temporarily pausing China’s sweeping controls on rare earth exports and the United States’ threatened 100 percent retaliatory tariffs. These moves set the stage for a much-anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping in South Korea on October 30, with the world watching closely for signs of lasting détente.
Yet, for many in ASEAN, the mood was anything but celebratory. As Foreign Policy reported, the region’s initial relief at a cooling trade war was tempered by a gnawing sense of trepidation. ASEAN’s 11 member states—now including Timor-Leste, which was officially welcomed into the bloc after nearly two decades of effort—have long walked a diplomatic tightrope between their two largest trading partners. The trade war had already left Southeast Asia in a bind: U.S. pressure to reduce Chinese ties often clashed with local interests, while cheap Chinese goods, barred from American markets, flooded Southeast Asian shelves, squeezing local manufacturers.
Some ASEAN officials, speaking off the record, voiced a nightmare scenario: what if a U.S.-China deal left China with a better arrangement than any ASEAN member could secure? Trump’s unpredictability and eagerness for a deal with Beijing only stoked these anxieties. As one summit attendee put it, “Trump is unpredictable and clearly very keen for a deal with China—which is not reassuring.”
The summit was also a flurry of bilateral deal-making. The United States inked agreements with Malaysia and Cambodia, while Thailand and Vietnam signed framework agreements with Washington. Malaysian Trade Minister Tengku Zafrul announced that his country had secured tariff exemptions for 1,711 product categories—ranging from palm oil and rubber-based products to aircraft components and pharmaceuticals—representing about 12 percent of Malaysia’s exports to the U.S. However, details on semiconductor exports, a Malaysian specialty, remained scant. Both Malaysia and Cambodia agreed to consult with the U.S. before entering new digital trade agreements that might jeopardize American interests, a clause that raised eyebrows and speculation, especially with the European Union building its own trade links in Southeast Asia.
Meanwhile, China was busy advancing its own vision for the region. As Reuters highlighted, Beijing and ASEAN signed an upgrade to their trade agreement—the China-ASEAN Free Trade Area (CAFTA) 3.0 framework. This new iteration emphasizes multilateralism, the green economy, and sustainable development, setting it apart from the U.S. preference for bilateral deals. With China-ASEAN trade reaching a staggering $771 billion in 2024, the framework’s focus on next-generation issues such as digital economy governance, green investment, and services liberalization could have global ramifications.
China’s approach reflects its evolving domestic and international priorities. Its latest five-year plan, as noted by AWANI International, explicitly calls for a transition away from coal and oil—a first in top-level Chinese policy. By embedding sustainability in CAFTA 3.0, China is positioning itself as a global leader in green technologies like solar panels and batteries, while also strengthening its economic links with Southeast Asia. This integration of climate and trade policy allows Beijing to project soft power and hedge against diversification efforts by other global players, such as the so-called “China Plus One” strategy.
The contrasting strategies of the U.S. and China—one leaning on tariffs and bilateralism, the other on multilateralism and sustainability—underscore a deeper contest over the region’s future. As Foreign Policy and AWANI International both observed, ASEAN’s pragmatic blend of collective and individual bargaining has enabled it to preserve national interests while complicating efforts to maintain the bloc’s central role in regional integration. The summit saw ASEAN flex its diplomatic muscle, inviting the European Union to attend for the first time and signaling its intent to remain a neutral broker amid intensifying U.S.-China competition.
“The invitation from ASEAN to the European Union to be present at this summit is a signal that they are different global actors that do not accept this disruption of the multilateral and the rules-based order,” European Council President António Costa told Foreign Policy. The EU, for its part, is seeking to conclude trade talks with Malaysia, the Philippines, and Thailand by 2027, though a broader EU-ASEAN deal remains elusive.
Beyond trade, the summit was marked by other significant events. On October 26, a U.S. fighter jet and helicopter from the USS Nimitz crashed into the South China Sea within 30 minutes of each other. All five personnel were reported safe and stable, according to the U.S. Navy. The incident prompted a Chinese Foreign Ministry spokesperson to offer humanitarian assistance—while simultaneously criticizing U.S. operations in the region for creating instability.
Tragedy also struck Thailand, as the queen mother, Sirikit, passed away at age 93 on October 24. Revered for her charitable works and political influence, her death sparked national mourning and led to changes in summit attendance, with Thai officials arriving late and leaving early to honor her memory. Anutin, Thailand’s prime minister, even ordered price controls on black cloth as citizens scrambled to find suitable mourning attire.
The summit’s inclusivity theme was given real substance with the admission of Timor-Leste as ASEAN’s newest member. President José Ramos-Horta, in a conversation with Foreign Policy, reflected on the challenges ahead: “The difference is once you’re in heaven, everything is taken care of for you. It’s not exactly a workers’ paradise.” He outlined priorities such as improving domestic governance, boosting the economy, and leveraging ASEAN membership to facilitate scholarships and investment. Ramos-Horta also expressed hope that ASEAN could play a role in supporting peace and democracy in Myanmar, given Timor-Leste’s history of struggle and advocacy for human rights.
Despite concerns over Timor-Leste’s stability—recent demonstrations, worries about organized crime, and questions over the country’s gas revenues—Ramos-Horta remained optimistic. He described the protests as “extremely limited” and “inflated on social media,” noting that swift government concessions led to a rare moment of unity: “The students and the police join hands, dance in the street, celebrating their agreement.”
As the summit drew to a close, it offered a snapshot of a region at a crossroads. The official theme of sustainability and inclusivity, while sometimes overshadowed by the spectacle of power politics, remains deeply relevant. The choices ASEAN makes—whether through collective action or pragmatic bilateral deals—will not only shape its economic trajectory, but also its contribution to global climate goals and the delicate balance of power in the 21st century.