Trump tariffs aimed at 'America First' are making China great again

By Karishma Vaswani

 

Be nice to allies, departing US ambassador to China Nicholas Burns said, when asked how Washington might beat Beijing in the global game of power. It’s advice Donald Trump should take if America wants to remain relevant in Asia. 

 

For now, Asian nations are falling in line to negotiate their way out of his tariffs. In the long term, they’ll work toward strengthening cooperation with each other. They’ll also weigh the benefits of drifting back toward the superpower that isn’t punishing them with new levies, although China’s expansionist moves in the Indo-Pacific have taken some of the shine off its allure. Washington is missing an opportunity to exploit that regional disquiet over Beijing’s actions.  

 

 

Going after rivals like China makes sense, as Mr Trump seeks to right perceived wrongs inflicted on America by trading partners. But some of the other decisions are bewildering. Almost no country was left untouched, not even allies like Australia, India, Japan and South Korea. Alienating Indonesia, Taiwan, Vietnam, Singapore and the Philippines, which have all been useful in helping Washington combat Beijing’s rise in the region, is also counterproductive. 

 

The damage to American credibility won’t happen overnight but will be felt for decades. It will be seen in decisions about who to trade with, create security alliances with, buy weapons from, seek development aid from, and share intelligence with. 

 

The US has been the biggest beneficiary of these ties. As a maritime power, it grew its economy through international trade and maintaining open sea lanes, which contributed to overall world stability, as Sally Paine, a professor at the US Naval War College, notes. Washington now risks losing this advantage. A recent study of over 2,000 Southeast Asians, conducted by the ISEAS-Yusof Ishak Institute before the latest tariffs were unveiled, highlights this. It found that more people would choose the US if forced to pick between Washington and Beijing, primarily over concerns the latter is flexing its military might in places like the South China Sea. That’s a reversal from last year.

 

It’s plausible the responses would be quite different if those surveyed were asked the same question today. Asian governments are already weighing their options. Countries like Malaysia and Singapore, both huge beneficiaries of globalisation, have already spoken out about the damage the tariffs will do. Singapore Prime Minister Lawrence Wong warned of the possibility of a more dangerous world akin to “the 1930s,” when “trade wars escalated into armed conflict, and eventually the Second World War.” 

 

In contrast, Beijing is showing it knows how to treat its friends. In December, it lowered tariffs to zero on certain products from all least-developed countries it has diplomatic relations with. It’s also a leading driver of the Regional Comprehensive Economic Partnership, the world’s largest free trade agreement, encompassing 15 countries that account for 29 per cent of global gross domestic product based on 2022 figures. More Asian nations are likely to want to join to blunt the impact of Washington’s economic policies. 

 

Beijing has also been on a regional charm offensive. China, Japan and South Korea met in March, renewing their call for an open, fair flow of goods, and pledging to deepen economic ties, despite their historic hostility. There is no pact yet, but the fact that the meeting took place at all is a sign of how the three countries could be willing to strengthen relations as they face US antagonism. 

 

Security ties usually follow economic ones, but for now no one can replace the US consumer. American household spending in 2023 reached $19 trillion, double the level of the European Union and almost three times that of China. When pushed against a wall, nations will adapt and Beijing is offering them precisely what they need to navigate a changed global trade landscape. 

 

To protect themselves against further economic fallout, Asian nations will have no choice but to work more closely, while preserving their relationship with the US. It’s an alliance they will want to nurture despite the current unpredictability, as it has helped to lift incomes and living standards across the region.

 

Reaching out to other partners affected by the whims of Washington, like the European Union, would also be wise given shared grievances. 

 

Defence and military relationships could be recalibrated, too. Some of this is already under consideration, with Japan and North Atlantic Treaty Organization, in discussions to step up information sharing and defence-industrial cooperation.

 

Mr Trump’s trade war is just beginning. With both superpowers behaving badly, countries stuck in the middle are attempting to limit their losses. Asian nations are trying to find a way to muddle through, but in the long run, there will be a realignment of strategic priorities toward Beijing.  What began as a battle over global trade, stands to reshape the geopolitical map in the Indo-Pacific with China at its centre.