Europe is attempting to woo Southeast Asia — however it received’t win it over the U.S. or China

European leaders need to Southeast Asia with renewed curiosity amid Washington’s aggressive tariff agenda, however consultants warn that the state of regional commerce ties makes it difficult to disrupt the U.S. or China’s maintain.

Southeast Asia is in a predicament: its ally China is ramping up its advances within the South China Sea, with state-of-the-art Chinese bomber planes. noticed within the disputed Paracel Islands within the area late final month as tensions flare with the Philippines. In the meantime, its different ally, the U.S., hangs the specter of tariffs over the world, with uncertainty mounting as a 90-day reprieve is set to expire in July.

Europe is now seizing the chance to floor as a substitute ally to rising Asian nations, with French President Emmanuel Macron calling for stronger ties between the blocs on the 2025 Shangri-La Dialogue that wrapped up earlier this month.

Southeast Asia brings Europe the chance to entry one other marketplace for its protection sector, in response to Bob Herrera-Lim, managing director at Teneo. Ifri’s Pajon provides that the area might additionally present Europe a diversified provide chain to hedge towards financial reliance on the U.S. or China and important uncooked materials reserves important for the EU’s inexperienced and digital transition.

Europe is bold in its hopes for rising Asia, however analysts however doubt it might probably overtake the U.S. or China’s affect within the area.

“Europe, by itself, can provide Southeast Asia a useful choice to hedge towards the dangers of overdependence on both China or the US,” Céline Pajon, head of Japan and Indo-Pacific Analysis at Ifri’s Middle for Asian Research, advised CNBC by electronic mail.

Whereas ties span greater than half a century, Southeast Asian and European relations have been mired in numerous challenges that Teneo’s Herrera-Lim attributes to components similar to geographic distance and diverging views over politics or the surroundings.

In his keynote speech on the 2025 Shangri-La Dialogue, Macron known as for stronger ties between Europe and the Indo-Pacific’s “new particular relationship.” He confused that each blocs are dealing with the “potential erosion of long-time alliances” and the specter of international locations vying for management or resorting to pressure, drawing direct parallels between China’s advances within the South-China Sea and Russia’s invasion of Ukraine. 

But related experiences alone won’t be sufficient to sway rising Asia away from the U.S. or China, in response to Herrera-Lim.

“Kind follows perform in Southeast Asia,” he advised CNBC in a name, “Relationships are constructed on financial ties in Southeast Asia, greater than anything.”

Whereas the EU has commerce ties with Singapore and Vietnam, talks for different bilateral offers or an EU-ASEAN huge free commerce agreements (FTA) have been stalled for years, and Ifri’s Pajon mentioned that the bloc “nonetheless has progress to make” in growing its presence and funding within the area.

In the meantime, Beijing stays the Southeast Asia’s largest buying and selling accomplice since 2009, with complete items in commerce reaching $982.3 billion in 2024. The U.S. follows behind in second place, with an estimated $476.8 billion items in commerce final yr. The EU trails behind in third place, with roughly 258.7 billion euros ($299.7 billion) of products in commerce over the identical interval.

With none significant reform or the promise of elevated commerce sooner or later, Herrera-Lim mentioned that it will likely be troublesome for Europe to compete towards the bloc’s established buying and selling companions. 

“If within the subsequent week or subsequent month, China says, ‘We’re doing reforms in order that home markets are opened up in China for Southeast Asian items,’ [then] Southeast Asian international locations would line as much as get entry to the Chinese language market. Impartial of their politics round many of those points,” he mentioned.

Whereas Europe won’t be capable of change the U.S. or China in rising Asia, it might probably however provide clear, dependable partnerships that are not about zero-sum competitors, Lizza Bomassi Analysis Analyst on the European Union Institute for Safety Research (EUISS), advised CNBC by electronic mail.

“Europe’s worth proposition lies in being a dependable accomplice in essential areas like vitality safety, inexperienced infrastructure, and digital governance,” she mentioned, “These are areas the place Southeast Asian international locations wish to diversify and construct resilience, particularly given issues about overdependence.”

Ifri’s Pajon mentioned that strengthening ties with Europe would permit Southeast Asia to diversify its strategic partnerships and improve their capability to withstand hegemonic pressures.

“The presence of extra companions, together with Europe, raises the diplomatic and reputational prices for China to escalate [territorial disputes in the region], significantly given Beijing’s emphasis on a ‘peaceable rise’,” Bomassi mentioned. 

“On this context, the EU-ASEAN partnership is not about onerous navy deterrence, however it serves as a vital symbolic defence mechanism. It reinforces that Southeast Asia is not remoted and has a number of companions, making the area extra resilient to coercion,” she added.