Trump’s trade barbs push Asian nations closer to China’s orbit

Bloomberg

For years, smaller nations in Asia have looked to the US to provide a counterweight to an increasingly powerful China. Under President Donald Trump, they are learning to fend for themselves.
Trump declared his 12-day swing through Asia a success before heading home, saying that “all Countries dealing with us on TRADE know that the rules have changed.” On each stop, he devoted most of his time to trade deficits, moving away from a US strategy since World War II to enhance economic linkages in Asia as a way of boosting security ties and deterring conflict.
The approach is a sharp contrast with former US President Barack Obama, who announced a pivot to Asia backed up by an increased military presence and the Trans-Pacific Partnership trade deal. Trump subsequently called for US allies to pay more for security, and immediately withdrew from the TPP.
The US’ emphasis on negotiating—and revising—deals that put “America First” is raising alarms in a region where China is already the top trading partner for most countries. As frictions with the US grow under Trump, smaller countries are searching for new solutions to avoid becoming overly dependent on China for economic gains.
That was seen when Japan, in particular, pushed to revive the TPP. The 11 remaining members announced a framework agreement on the pact while Trump was in Vietnam defending his decision to shun such multilateral agreements in favour of bilateral deals.
“The credibility of the US is going down, so regional actors are trying to do their own things,” said Harsh Pant, a distinguished fellow at the New Delhi-based Observer Research Foundation who has written books about defense policy in the region. “That is now the new normal, where regional states will have to come up with new ideas and new solutions to regional problems, and the US will fit in where it can.”
Trump appears to want it that way. In a meeting with Southeast Asian leaders in Manila, he called for a “free and open Indo-Pacific.” The phrase reflects the US desire for India to play a bigger role in its security matters.
“We want our partners in the region to be strong, independent, and prosperous, in control of their own destinies, and satellites to no one,” he said.
Still, Trump’s focus on trade deficits risks doing just the opposite. Already over the past decade, the 10-nation Association of Southeast Asian Nations has grown more reliant on China, which accounted for 15 percent of its total trade last year compared with 9.4 percent for America. Back in 2007, Asean traded more with the US than China.
South Korea, which agreed to revise its bilateral deal with the US, is being pulled towards China under Trump and the longer term consequences are unclear, according to a person familiar with the country’s trade policy who asked not to be identified speaking about internal deliberations. Too much reliance on China is potentially strategically dangerous, the person said.
The South China Sea is another area where China can use its economic might to advance its geopolitical aims. At the Asia-Pacific Economic Cooperation summit in Vietnam, Trump and Chinese President Xi Jinping again laid out competing visions for globalisation. While Trump said he wouldn’t enter large trade agreements “that tie our hands,” Xi painted a picture of a global order that would bring collective benefits.