US President Trump has confirmed his attendance for the ASEAN Summit in Malaysia this October, according to Malaysian Prime Minister Anwar Ibrahim. An announcement regarding a revised tariffs rate on Malaysian goods is expected soon.
The summit will occur from 26 to 28 October, aligning with the upcoming announcement of a 90-day trade truce extension between the US and China. This timing suggests strategic discussions may take place during the event.
China’s Influence in Asean
China’s influence in ASEAN is increasing, which might lead to high-profile delegations attending the summit in Malaysia. Chinese President Xi Jinping, who visited ASEAN earlier in April, may also attend.
This setting could lead to a meeting between Trump and Xi at the end of October, with possible implications for trade discussions. Observers are encouraged to monitor developments closely.
Based on the upcoming tariff announcement for Malaysia, we should watch for immediate volatility in the Malaysian Ringgit (MYR). The currency market will react first, so any options on the USD/MYR pair will be active. Looking back at the first half of 2025, Malaysia’s trade with the US grew to over $40 billion, so any changes to tariffs will have a significant impact on its currency.
The potential for a Trump-Xi meeting in October creates a clear runway for market uncertainty over the next eight weeks. We should anticipate a rise in implied volatility across major indices like the S&P 500 and the Hang Seng. We saw this exact pattern play out repeatedly during the 2018-2020 trade tensions, where the VIX would climb steadily in the weeks leading up to any high-level talks.
Impact on Markets and Currencies
This sets up a classic play on the Chinese Yuan and the US Dollar. The offshore yuan (CNH) will likely become a barometer for trade sentiment, while the dollar may strengthen on safe-haven demand if tensions rise. Just last month, in June 2025, we saw the CNH weaken sharply on rumors the existing trade truce might not be extended, so that sensitivity remains extremely high.
The location of the summit in Malaysia also brings regional markets into focus. The ASEAN bloc’s economy is now the world’s fourth largest, with a combined GDP projected to hit $4.5 trillion by the end of 2025. A positive outcome could provide a significant lift to ASEAN-focused ETFs and the currencies of key trading partners like Singapore and Vietnam.
For the coming weeks, the most sensible approach is to trade the anticipation rather than the event itself. This means considering buying options now, such as straddles on the Hang Seng Index, to position for a large price swing in either direction as we get closer to October. Acquiring this volatility exposure in August will likely be cheaper than waiting until late September when event risk is fully priced in.
