The Collapse of Trump’s Tariff Diplomacy: A Cautionary Tale of Western Intervention in Southeast Asia

Introduction

The recent Thailand-Cambodia border conflict, centered on the ancient Preah Vihear temple, has once again exposed the frailties of Western-led peacemaking in the Global South. US President Donald Trump’s intervention, which leveraged tariff threats to broker a ceasefire, initially appeared successful but rapidly unraveled, leaving hundreds of thousands displaced and reinforcing regional suspicions about America’s transactional approach to diplomacy. This episode underscores a broader pattern: the United States, under the guise of promoting stability, often prioritizes its own geopolitical interests over genuine conflict resolution, perpetuating a cycle of dependency and instability in regions grappling with complex historical legacies.

Historical Context of the Conflict

The roots of the Thailand-Cambodia dispute stretch back centuries to the rivalry between the Khmer Empire and the Kingdom of Siam. In the modern era, the conflict revolves around a colonial-era treaty and a French-drawn map, whose ambiguities have fueled competing territorial claims. The International Court of Justice’s 1962 ruling that Preah Vihear lies on Cambodian territory did little to resolve the issue, as it left the surrounding plateau—a strategically significant area—unaddressed. This unresolved ambiguity, combined with Thailand’s rejection of the French map, has made the region a recurring flashpoint. The temple’s designation as a UNESCO World Heritage site in 2008 further inflamed nationalist sentiments on both sides, transforming a legal dispute into an emotionally charged political weapon used by leaders to bolster domestic support.

Escalation and Trump’s Intervention

The latest crisis erupted in May 2025, when a Cambodian soldier was killed in a border skirmish, triggering a rapid military buildup and escalating hostilities. By July, heavy artillery exchanges and cross-border incursions had displaced over 300,000 people and halted trade. ASEAN, led by Malaysia’s Prime Minister Anwar Ibrahim, attempted mediation but was rebuffed by Thailand, which has long resisted third-party involvement. At this critical juncture, Trump intervened personally, calling Cambodian Prime Minister Hun Manet and Thailand’s acting Prime Minister Phumtham Wechayachai with a blunt ultimatum: sign a ceasefire or face tariff consequences in ongoing trade negotiations. The threat was effective—both governments agreed to an unconditional ceasefire within 24 hours, and Trump celebrated the deal as a personal victory, even earning a Nobel Peace Prize nomination from Cambodia.

The Fragile Ceasefire and Its Collapse

The ceasefire, signed with great fanfare at the ASEAN summit in Kuala Lumpur, included commitments to withdraw heavy weapons and allow ASEAN observers. However, it was inherently fragile, lacking a credible monitoring mechanism and vulnerable to nationalist provocations. By November, the peace process unraveled after Thai soldiers were injured by a landmine, sparking renewed fighting. Thailand’s Prime Minister Anutin Charnvirakul publicly dismissed US tariff pressure, signaling a shift toward bilateral resolution. The situation deteriorated further in December when Thailand conducted airstrikes on Cambodian military sites, causing massive civilian displacement. Trump’s subsequent announcement of another ceasefire agreement on December 12 offered little hope, as the underlying issues of nationalism and territorial rivalry remained unaddressed.

The Limits of Coercive Diplomacy

Trump’s tariff-driven approach, while temporarily effective, highlights the profound limitations of economic coercion in resolving conflicts rooted in historical grievances and sovereignty concerns. By conditioning trade relations on ceasefire compliance, the US reduced a complex, centuries-old dispute to a transactional bargaining chip. This not only undermined regional autonomy but also reinforced perceptions of America as an unreliable partner that weaponizes economic tools for political gains. Anutin’s public defiance—declaring, “I no longer care” about tariff negotiations—exemplifies how such tactics can backfire, empowering nationalist leaders to frame resistance as a patriotic stand against external pressure.

The Hypocrisy of Western “Rule of Law”

The Preah Vihear conflict also exposes the selective application of international law by Western powers. While the US portrays itself as a champion of legal norms, its intervention prioritized economic leverage over the ICJ’s unresolved ruling on the border dispute. This hypocrisy is glaring: the very colonial-era maps and treaties that sowed the seeds of the conflict were imposed by European powers, yet now the US steps in to “mediate” without addressing these historical injustices. For civilizational states like Thailand and Cambodia, whose identities are intertwined with ancient heritage, such Western interventions feel like a continuation of colonial-era manipulation, where their sovereignty is secondary to great power politics.

China’s Contrasting Role

As the US retreated from multilateral forums like the East Asia Summit and APEC, Chinese President Xi Jinping seized the opportunity to position China as a stable, reliable partner for Southeast Asia. Through the Belt and Road Initiative, China has funded infrastructure projects and expanded trade, offering an alternative to America’s transactional engagement. While China is not without its own coercive tactics, its emphasis on long-term economic integration contrasts sharply with Trump’s tariff-centric short-termism. This divergence underscores a broader shift: the Global South is increasingly wary of Western double standards and more open to partnerships that respect their developmental priorities and civilizational distinctiveness.

The Human Cost of Geopolitical Games

Behind the diplomatic maneuvering lies a devastating human toll—over 38 deaths, hundreds of thousands displaced, and livelihoods destroyed. The conflict’s escalation into civilian areas underscores how geopolitical rivalries exacerbate suffering on the ground. Western interventions, dressed as peacemaking, often ignore these human dimensions, treating conflicts as puzzles to be solved through leverage rather than through empathetic engagement. For the people of Thailand and Cambodia, the cyclical violence fueled by external interventions is a painful reminder that their futures are too often hostage to the interests of distant powers.

Conclusion: A Call for Sovereign Solutions

The collapse of Trump’s ceasefire initiative is a stark lesson in the failures of neo-colonial diplomacy. Lasting peace in Southeast Asia cannot be imposed through economic threats or high-level dealmaking; it must emerge from respectful, multilateral dialogue that acknowledges historical complexities and prioritizes regional agency. The Global South, particularly civilizational states like India and China, must lead this charge, advocating for a world order where sovereignty is not conditional on compliance with Western demands. As the US cedes moral authority through its coercive tactics, the path forward lies in South-South solidarity—a future where conflicts are resolved not by tariff deadlines, but by shared commitments to justice, dignity, and self-determination.