Malaysia hosts first ever ASEAN-GCC-China summit under shadow of US tariffs

From the Cradle

The inaugural summit of the 10-member Association of Southeast Asian Nations (ASEAN), the six-member Gulf Cooperation Council (GCC), and China occurred in Kuala Lumpur, the capital of Malaysia, on 27 May.

“From the ancient Silk Road to the vibrant maritime networks of Southeast Asia to modern trade corridors, our peoples have long connected through commerce, culture, and the sharing of ideas,” Malaysian Prime Minister and current ASEAN chair Anwar Ibrahim said during his opening remarks.

The Malaysian leader also noted that the relationships reflect both “immense existing linkages as well as substantial untapped potential.”

Chinese Premier Li Qiang echoed Anwar’s remarks, highlighting “the deep historical ties” that support China’s ambitious Belt and Road Initiative (BRI).

“At a time when unilateralism and protectionism are on the rise and world economic growth is sluggish, [China, ASEAN, and GCC countries] should strengthen coordination and cooperation and jointly uphold open regionalism and true multilateralism,” Li said during his remarks.

Beijing and other participants reportedly proposed exploring the inclusion of the GCC in the Regional Comprehensive Economic Partnership (RCEP), a 15-member trade pact that includes China and ASEAN.

Furthermore, Beijing and others expressed “disappointment” over the trade war initiated by US President Donald Trump.

“I believe the ASEAN–GCC partnership has never been more important than it is today, as we navigate an increasingly complex global landscape marked by economic uncertainty and geopolitical challenges,” the Malaysian prime minister said.

Six of ASEAN’s 10 members were significantly impacted by Trump’s tariffs earlier this year, with Cambodia facing a 49 percent import duty, followed by Laos at 48 percent and Vietnam at 46 percent.

Together, ASEAN, China, and the GCC account for over 20 percent of the global gross domestic product (GDP) and encompass a market of 2.15 billion people.

In 2024, ASEAN’s total trade value with China and GCC countries surpassed $900 billion, almost twice the $453 billion in trade with the US.

Tuesday’s landmark summit occurred just a few weeks after western media reports revealed that the de-dollarization of trade is gaining momentum in Asian markets.

In March 2023, ASEAN finance ministers and central bank governors discussed eliminating the US Dollar, Euro, Yen, and British Pound from financial transactions, opting instead for settlements in local currencies.