In response, Asia has been busy implementing a range of measures, from restricting energy use to introducing fuel subsidies, re-starting coal plants, and imposing export restrictions. While the crisis looms large over Asia, the U.S. trade agenda appears to move forward unabated. Adapting U.S. trade asks to reflect the pressures partners are facing — and offering financial support or other cooperation — would build meaningful goodwill in a region Washington cannot afford to lose.

With more than 80% of the oil and gas usually passing through the Strait of Hormuz bound for Asia, the region’s energy vulnerability is stark. Energy prices in Asia have risen by almost 70% in some places since the start of the war, forcing countries like Cambodia and Vietnam to ration energy and introduce fuel subsidies. Pakistan and Bangladesh have closed schools, and, across Southeast Asia, officials are working from home and curtailing travel.  For tourism-dependent economies like Thailand and Vietnam, surging jet fuel costs and airline service cuts are compounding the damage. In addition, the current situation has prompted several countries in Asia to accelerate their shift to green technologies, which China is well positioned to benefit from given its dominance in this area.

Fertilizer supply has also been impacted by the crisis, as one third of global fertilizer supply comes through the Strait of Hormuz. Compounding this, China, another major supplier, has imposed export restrictions.  Shortages now threaten countries across South and Southeast Asia, where agriculture employs a large share of the workforce — raising food security risks for economies already under strain.

In Japan, there is growing concern about the reduced access to naphtha, a raw material from the Gulf that is needed to make critical medical supplies. Purchasing restrictions have been announced, and Japanese Prime Minister Takaichi has released medical gloves stockpiled for use in a pandemic to alleviate sourcing problems. The semiconductor industry is also not immune, with roughly 45% of sulfur, which is required in chip production, usually coming from Gulf producers.

Projections for economic growth across Asia, particularly emerging economies, have already been scaled back. In April, the International Monetary Fund revised its numbers downwards, citing the Middle East conflict as halting recent momentum. Asia’s economic growth is now expected to slow by 0.6% from 2025, with India, Vietnam, and Thailand predicted to slow beyond this level. If the conflict drags on, economic growth through 2027 is predicted to reduce cumulatively by 1% to 2%.

Despite this, Washington’s trade requests appear unwavering. With Indian officials continuing to negotiate elements of a bilateral trade deal, New Delhi’s ability to show flexibility on key U.S. asks — such as increased agricultural market access — will likely narrow as its population faces rising food costs and input-price pressures mount for farmers and manufacturers.  Malaysia and Indonesia may be finding it increasingly difficult to move forward the implementation of their bilateral trade deals given the necessary focus on addressing the immediate economic impacts from the conflict.

In addition, as businesses prioritize securing energy and other critical inputs, identifying prospective investments in the U.S., required as part of certain recent trade deals, is likely being pushed off to a future date.

At a special meeting this week, ASEAN economic ministers stressed the need for greater regional cooperation and coordination to address the far-reaching economic impacts. The Singapore-New Zealand Agreement on Trade in Essential Supplies — a little-known but relevant model —helps to maintain the supply of essential goods between these countries during moments of crisis and is an example of Asia leading the way with collective responses. The Philippines has also suggested a regional study on joint oil stockpiling, while Japan has provided financial assistance to help Asian partners secure energy supplies and bolster stockpiles. 

U.S. policymakers would be well served to acknowledge the limited bandwidth Asian partners have for Washington’s trade priorities right now — and to adjust accordingly. Moreover, Washington could take a page from Japan’s playbook and provide support to those economies particularly hard hit by the conflict.  By doing so, the U.S. could build valuable trust and confidence at a time when relationships between our partners and the U.S. need a boost.

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