What in the world?
A new column from Professor José Mora, PhD
How Kentucky feels the impact of changes to Southeast Asian economies
This is a new column that aims to address current world affairs with an eye toward what is in the interest of Kentuckians. In it, I will try to discuss the relevance of international events for our daily lives. To keep the column focused on Kentucky, I am open to comments or questions from you, the reader. Please feel free to send me a note: jose.e.mora.torres@gmail.com.
We’ll start with President Trump’s recent visit to Kuala Lumpur in order to attend the 47th Annual Summit of the Association of Southeast Asian Nations — better known as ASEAN. You may wonder why the US should invest time and attention in a region that feels far from Kentucky. The short answer: trade, geography, and China.
Southeast Asia is an economic powerhouse. The region moves more than $4 trillion in trade each year, sits along some of the world’s busiest sea lanes, and has become a central battleground for U.S.–China competition. This matters directly to Kentucky. A resent study found that as a percentage of GDP (gross domestic product), our state is the number-one importer of foreign goods among all US states (mostly automotive and pharmaceutical products), the third-largest exporter behind Louisiana and Texas, and about one-third of Kentucky’s GDP and jobs depend on trade.
When global shipping rules shift in Southeast Asia, the effects eventually reach the Commonwealth.
What is ASEAN?
ASEAN was created in 1967 in Bangkok, Thailand when a group of five Southeast Asian nations came together to deal as one with other world economies. The nations were: Indonesia, Malaysia, the Philippines, Singapore and Thailand.
ASEAN now has eleven members, including Brunei, Cambodia, Laos, Myanmar, Timor-Leste and Vietnam, plus the original five nations.
While ASEAN began as a security partnership, today it is most important as an economic bloc. Collectively, ASEAN reports that its 678 million people trade about $476 billion a year with the United States. But U.S. influence in the region has slipped. Cuts to foreign aid and sudden changes in U.S. trade policy have caused ASEAN governments to question whether we are still a reliable partner.
Meanwhile, China has been working hard to expand its presence in the region. It provides billions of dollars in development assistance, invests heavily in regional infrastructure, and keeps a constant diplomatic presence. Even though China behaves aggressively at times, especially in the South China Sea, many ASEAN nations now see Beijing as the more predictable player.
To understand why, it helps to know how ASEAN makes decisions. It is not like the European Union. ASEAN has a small headquarters, rotates leadership annually, and follows three core rules: no interference in each other’s internal affairs, decisions by consensus rather than voting, and a commitment to keep regional cooperation centered around ASEAN. These rules slow things down but make the region attractive for major countries to engage with, including the US and China. China became a comprehensive strategic partner status with ASEAN in 2021 (the highest level of engagement), while the US reached the same level the following year.
The economic picture
ASEAN focuses on three areas: political-security, economy, and socio-cultural issues. However, its economic coordination is the most successful, with decades of high steady growth across the region. Still, not all countries are equal in wealth or capabilities, and this shapes how they view outside partners.
Federal trade data show that the US invests about $230 billion and trades about $475 billion annually with ASEAN. China, however, has built deeper ties through free-trade agreements and major regional economic partnerships. By 2024, China’s trade with ASEAN reached roughly $975 billion, more than double the US total, according to an international trade report. That imbalance matters. Southeast Asia is now more economically tied to China than to the United States, giving Beijing more influence.
The US withdrew from the Trans-Pacific Partnership several years ago, leaving China as the primary driver of regional trade architecture. Instead of joining multilateral trade deals (ASEAN’s preferred format) the US has relied on individual, bilateral agreements. ASEAN nations see this as less dependable.
Why the region matters
Geography also marks the importance of Southeast Asia. The countries border the South China Sea and the Strait of Malacca, two waterways that carry over $3.37 trillion in goods every year, according to the China Power Project. The US has long-standing security relationships with several regional countries, including Japan, South Korea, the Philippines, Thailand, and others. China, however, claims large parts of the South China Sea, overlapping with claims by Vietnam, the Philippines, and Malaysia. Those challenges compel the US to become involved, aiming to counter aggressive Chinese actions.
While the US has recently strengthened its military support for the Philippines, other Southeast Asian nations still question whether Washington will remain consistently engaged in the long run. They have seen U.S. foreign policy shift dramatically from one administration to the next.
What does this mean for Kentucky?
It may seem odd to claim that affairs in such a distant region can have an affect here, but it does. Our state relies heavily on global trade. Manufacturers in Kentucky build everything from automotive parts to aerospace components to bourbon, and Southeast Asia is one of the fastest-growing consumer markets in the world.
But trade stability requires consistent leadership from the US When Washington’s policies swing back and forth, or when allies abroad are unsure what the US will do next, Kentucky businesses feel the ripple effects through slower exports, and less predictable markets.
Southeast Asian nations think in the long-term, not election cycles. China is their neighbor and top trading partner. The US is a valuable but distant partner whose engagement appears less predictable. Rebuilding trust in the region will require steady, long-term US commitment.
For Kentucky, that commitment is not abstract. It is about protecting jobs, supporting exporters, and ensuring that our state remains competitive in a fast-changing world.
Jose E. Mora, PhD, is a former Professor and Chair of Global Affairs of the American University of Phnom Penh in Cambodia. Mora and his wife, Melissa, recently moved to Berea in order to be closer to their four adult children who also live here.