By Victor Ferguson, Viking Bohman and Darren Lim
Policymakers across the Asia Pacific were rattled by the sweeping global tariffs announced by US President Donald Trump in April 2025. The measures generated significant trade uncertainty and dealt another costly blow to the already fragile rules-based multilateral trading system that has been instrumental to the region’s prosperity.
Complicating things further was the fact that when officials met with their US counterparts, they faced demands that seldom featured in the trade negotiations of the past. Not only did Washington seek traditional concessions — such as addressing the balance of trade and improving market access for US firms — it also pressed for commitments tied to security. This included placing restrictions on outbound investment, addressing supply chain dependencies and aligning export controls.
Such priorities were made clear from Trump’s first ‘deal’ with the United Kingdom in May, which included a specific section on ‘Strengthening Alignment and Collaboration on Economic Security’ and provisions widely interpreted as targeting China. Similar issues were also subsequently reported to have been a factor in US negotiations with other trading partners, including Japan, South Korea and Vietnam.
These dynamics reflect a wider trend that predates Trump’s return to office. The negotiation and conclusion of traditional free trade agreements — those focused on regional integration, market liberalisation and reducing barriers to trade and investment — have slowed globally, while the use of protectionist measures has risen sharply. As governments increasingly prioritise ‘economic security’ and geopolitical alignment over openness and efficiency, the modality of economic cooperation is changing to reflect new objectives.
US–China rivalry, the COVID-19 pandemic, wars in Europe and the Middle East and increasingly frequent natural disasters have all served to highlight the potential perils of unmanaged economic interdependence. There are growing concerns about issues such as economic coercion, foreign ownership of critical infrastructure, the transfer of advanced technologies to adversaries and the risks of supply chain disruption. These have prompted an increasing number of governments to introduce new laws, strategies and policy frameworks for managing these risks at home.
Few states seem to believe that it is possible to build resilience in a globalised economy without partners abroad. Since 2015, governments have begun entering a wide range of bilateral and minilateral cooperative arrangements, focusing on mutually adjusting economic policies to advance security objectives.
Nowhere are these dynamics stronger than in the Asia Pacific. In research to map global economic security cooperation we identified more than 250 separate arrangements that were concluded between 2018 and 2025 in which states have agreed to cooperate on issues they describe as linked to security. Approximately half of these involves states in Asia and Oceania, with key actors like Japan, South Korea, Australia and China occupying central positions in the global network of agreements.
The most prominent domain of cooperation concerns supply chains. Agreements centre on building entirely new networks or reinforcing the resilience, stability and transparency of existing supply chains between economies for specific inputs or final products — especially for raw materials such as critical minerals.
Given its geological endowments and strategic alignments, Australia is an important player involved in a number of bilateral arrangements — including partnerships with India, Japan, South Korea and the United States — and minilateral arrangements such as the 2022 Mineral Security Partnership and the Indo-Pacific Economic Framework Supply Chain Agreement.
A second domain relates to countering economic coercion. G7 states attracted headlines when they announced the creation of a Coordination Platform on Economic Coercion at the 2023 Hiroshima Summit, and Asia Pacific states have continued to reach other arrangements on coercion. States targeted by Western sanctions, like China and Russia, have developed a separate web of similar agreements.
A third area involves cooperation on industrial policy regarding economic activity linked to national security. The bulk of this activity has involved agreements jointly to research or produce critical or dual-use technologies. Discussions of shipbuilding cooperation in Asia between the United States, South Korea and Japan increased, following a 2024 agreement between the United States, Finland and Canada to cooperate on producing icebreaker ships.
A fourth domain concerns the development of critical infrastructure, including via joint financing and construction. Many agreements concern undersea cables, on which Australia has collaborated with Japan and the United States in the Pacific.
A smaller set of arrangements has emerged that deal with coordinating economic sanctions, enforcing export controls and regulating foreign investments. Most governments in Asia and the Pacific appear to be followers, rather than leaders, in these other domains, with initiatives largely emerging from Washington or Brussels.
Unlike traditional trade agreements, one of the most striking features of these cooperation arrangements is the almost complete absence of binding rules. The Indo-Pacific Economic Framework and other formal arrangements are explicitly framed as non-binding.
Substantively, most agreements are either aspirational or primarily commit states to regular consultation on relevant issues. But a growing number do involve more meaningful action, including active coordination of policy implementation and joint action — such as the financing of an increasing number of critical minerals projects.
Patterns of participation suggest the emergence of two loosely organised and overlapping networks: one centred on the United States, and the other on China. US allies including Japan, South Korea and Australia are more deeply integrated into the US network. In contrast, many other economies in South, Southeast and Central Asia appear to be adopting a more cautious posture, engaging both networks but less substantively and with fewer arrangements.
While this bifurcation poses challenges to the ideal of a singular, open, rules-based regional economic order, some separation need not necessarily mean instability. As these arrangements enable countries to mitigate exposure to coercive dependencies through diversification rather than outright decoupling, they may also help sustain openness on more resilient terms. But the risk lies in hard alignment and exclusive blocs. The eventual text and enforceability of Trump’s trade deals will help determine the long-term direction of international cooperation.
Victor A Ferguson is Assistant Professor at the Graduate School of Law, Hitotsubashi University.
Viking Bohman is a PhD Candidate at the Fletcher School of Law and Diplomacy, Tufts University, and Associate Analyst at the Swedish National China Centre.
Darren J Lim is a Senior Lecturer at the School of Politics and International Relations, The Australian National University, and host of the Australia in the World podcast.
