By Joseph Rachman
Welcome to Foreign Policy’s Southeast Asia Brief.
The highlights this week: U.S. Undersecretary of Defense for Policy Elbridge Colby travels the region, the Myanmar military junta’s Rohingya repatriation sham, and Indonesia’s naval exercises mess-up.
The message that U.S. Undersecretary of Defense for Policy Elbridge Colby delivered on his Southeast Asia tour last week was fairly simple.
“America’s interests are more engaged than ever in the Indo-Pacific,” he said in Manila on Aug. 10. “But it is also coupled with a newfound but common sense expectation of much greater effort and contribution by our allies and partners.”
Colby, who also visited Indonesia, Thailand, and Cambodia, added that the United States would be less ideological than previous administrations, “which were hidebound by outdated convention or rigid adherence to liberal dogma.”
Notably missing from the speech was any mention of China, let alone the South China Sea. The omission was pretty glaring since this was his host’s biggest security concern.
Still, as messages go, “we’re interested in you and won’t preach about human rights” is something that many in the region could welcome. Even the lack of a China mention might be welcomed by some capitals inclined to think that U.S. hawkishness only raises tensions.
The problem is that the U.S. government’s other actions have undermined Colby’s credibility. On Thursday, the Trump administration released a report called “The Great Transshipment Scam,” which called out several Southeast Asia nations. Then, on Sunday, it was announced that the United States would have no aircraft carriers in the Pacific for a couple of months as the USS George Washington would be leaving the region to relieve the USS Abraham Lincoln in the Gulf. Also on Sunday, Trump ordered military exercises with South Korea to be cut back, citing Seoul not helping out against Iran and the U.S. president’s “very good relationship” with North Korean leader Kim Jong Un.
The overall impression matters more than the details. As Aaron Connelly of The Economist pointed out, there have been periods without U.S. carriers in the Pacific before. But as Connelly wrote, the problem is less the capacity in the region and more “the perception that the president wants summits with Kim Jong Un and Xi Jinping more than he wants to deter an attack by either one on American allies.”
Colby praised the Philippines as a “model ally.” What does this mean when South Korea, also praised as a “model ally” in May by U.S. Defense Secretary Pete Hegseth, is now treated thus?
Colby’s tour was not fruitless. In Manila, he and Marcos announced new U.S.-Philippine Coast Guard patrols in the South China Sea.
Still, Colby did not address Marcos’s complaints about how the war in Iran has created an energy crunch for the Philippines. At a press conference on Friday, Marcos again brought up the possibility of joint energy exploration with China in the South China Sea.
Marcos also clarified that if there was a war in Taiwan, he would not allow the United States to conduct strikes from Philippine soil. This seems like a deliberate distancing from his remarks last year, when he said that the Philippines would “inevitably” be dragged into a war in Taiwan, though he later clarified that he was referring to the large number of Filipinos in Taiwan.
In Bangkok, Thai Prime Minister Anutin Charnvirakul refuted a Bloomberg report that Thailand was planning to threaten to scale down the annual Cobra Gold military exercises with the U.S. as leverage in tariff negotiations. Hegseth is expected to visit Bangkok at some point to sign a new security agreement.
In Phnom Penh, Cambodia and the United States confirmed that they would be restarting joint military drills in 2027, which were canceled in 2017. Cambodia’s small rapprochement with the United States continues.
The Indonesian leg of Colby’s trip was more disappointing, producing no visible results. The day after his visit, Indonesia’s navy confusingly participated in a joint exercise with China in waters east of Taiwan.
SCAMMERS!!! On Thursday, the U.S. government published a report entitled “The Great Transshipment Scam,” an investigation into Chinese goods routed via other countries to evade tariffs. It estimated the value of goods illegally transshipped at approximately $60 billion.
The report identified more than 40 countries “associated with elevated illegal transshipment risk.” Nine of those are in Southeast Asia.
Indonesia, Malaysia, Thailand, and Vietnam are classified as countries that “combine significant illegal transshipment volumes with deeper integration into China-linked supply chains.” Cambodia, Laos, Myanmar, the Philippines, and Singapore are classified as “smaller economies with lower absolute illegal transshipment volumes but specific weak-link advantages.”
What does this mean concretely? Not much for now. The report merely flagged plans to step up enforcement against transshipment.
Yes, transshipment does appear to occur in a big way in Southeast Asian economies—though fuzzy definitions mean agreeing on the scale is hard.
However, this is not Trump’s first trade war, when Chinese goods could avoid high duties by routing via other countries. Everyone is getting hit by unpredictable tariffs nowadays.
Even if China has the highest tariffs for now, the gap with other countries is smaller than before Trump’s 2025 tariffs salvo. Some companies that left China for Southeast Asia are now looking at going back as marginally higher tariffs are offset by China’s enormous efficiency.
Independence Day grumbles. On Monday, Indonesia celebrated its 1945 Proclamation of Independence. For many, the most notable part of the ceremony held in the capital was parachutists deploying a flag with President Prabowo Subianto’s profile emblazoned on it.
The ceremony also took place against a tragic backdrop. On Saturday, an earthquake on the island of Flores left at least 54 dead with many still missing. It was the country’s deadliest quake since 2022. On Tuesday, student protesters described Monday’s lavish ceremony as inappropriate.
Signs of nervousness following last year’s August riots were also on display. Earlier this month, a number of malls put up sturdy new fences around their perimeter, sparking speculation that there was fear of unrest.
Dissatisfaction with Subianto is growing. A July poll showed that his approval rating is 51.1 percent, which is down from 81.2 percent in November 2025.
In a state of the nation address on Friday, Subianto admitted some shortcomings. He also used it, as well as a different speech about the budget later that same day, to throw some bones to technocratic critics. These included promises of lower deficits and scaling back proposals for state control of raw material exports. This was welcomed by investors. Stocks climbed and bond yields fell.
Broadly, though, he promised more of the same, talking up pushes for self-sufficiency in food and fuel, expansive government welfare programs sometimes involving the police and military, and 6 percent growth next year.
That target is ambitious. Growth was strong in the second quarter of this year, but it relied heavily on state expenditure while private investment lagged.
Rohingya repatriation sham. On Saturday, the Myanmar military junta declared that it was ready to accept the return of more than 300,00 Rohingya refugees from Bangladesh once security conditions improve. Experts warn that offer is likely a hollow one.
Attacks by the Myanmar military in 2017, in what the United Nations called a genocide, pushed some 700,000 Rohingya to flee to Bangladesh. There, they joined some 300,000 compatriots who fled during previous exoduses.
In The Diplomat, M.D. Himel Rahman pointed out that Myanmar has made similar pledges before, only for them to come to nought. The pattern is Myanmar makes promises when it is under international pressure that it has no intention on keeping. Frankly, it has little capacity to do so, since most of Rakhine state, where Rohingya fled from, is under control of the Arakan Army rebel group.
Meanwhile, aid cuts mean that conditions in the Bangladesh camps will continue to worsen and more refugees will make perilous voyages to look for better lives.
A person wades through a flooded area due to monsoon rains and rising river water levels in Wetlet, Myanmar, on Aug. 10.AFP via Getty Images
FP’s Most Read This Week
“The crocodiles are kind.” Mara Cepeda profiles the push to protect the world’s rarest crocodiles in the Philippines, in The Straits Times.
Floods are devastating Mekong communities in Myanmar, Laos, and Thailand, according Aidan Jones in the South China Morning Post.
Starlink became vital infrastructure for the Arakan Army’s state-building in Myanmar, and now it is cut off, Aung Marm Oo writes in The Irrawaddy.
In Focus: Indonesia’s Taiwan Mess-Up
Last Wednesday, an Indonesian frigate briefly joined a naval exercise with a Chinese frigate in waters off the east coast of Taiwan. The move sparked a diplomatic protest. It also raised the question of whether Indonesia had fully realized what it was doing.
The outline of the incident is as follows. Indonesian Navy frigate KRI I Gusti Ngurah Rai was traveling back from Vladivostok, where it had participated in a joint naval exercise with Russia. On the way back, the Indonesian navy said that it performed passing exercises with Japan, the United States, and China. These are among the lowest levels of naval exercises. However, the statement by the Indonesian navy failed to acknowledge the drill’s location, which is what made it so controversial.
So, what was Indonesia, which has long prided itself on a nonaligned foreign policy, doing getting drawn into such a geopolitically sensitive issue?
The downplaying has led some to suggest that Indonesia may have failed to fully grasp the sensitivity of its actions at first.
Some analysts see it as a sign of Indonesia’s growing strategic drift. Its foreign-policy apparatus is in chaos as Subianto places his personal, often unpredictable, imprimatur on foreign affairs.
This incident is reminiscent of Prabowo’s visit to China not long after assuming office, when a joint statement mentioning “overlapping [maritime] claims” was issued. This stood in direct contradiction to Indonesia’s long-held refusal to accept China’s South China Sea claims, and it was quickly disavowed.
Mistake or not, last week’s events made for a big diplomatic moment.
Taiwan condemned the exercise as aimed at creating a “false impression” of jurisdiction. It also demanded that Indonesia clarify its actions.
The United States urged a halt to China’s “continuous military pressure against Taiwan.” It further called on “other countries to encourage the peaceful resolution of cross-strait issues instead of amplifying Beijing’s destabilizing narratives,” without naming Indonesia.
Chinese state media also crowed that the event demonstrated China’s sovereignty over the area. Some analysts see the move as prompted not just by China’s growing pressure campaign against Taiwan but also its anger over Japan and the Philippines moving to negotiate a maritime border in waters east of Taiwan.
