Trump's ‘America First’ Policies Will Hit Asia

By N. GUNASEKARAN

The President-elect’s rhetoric of “America First“ and “Make America Great Again,” in relation to issues surrounding the US strategic and economic policies, are now the important themes in the debates in various forums in Asian countries.

Will Trump continue Obama’s “Asia pivot” policy? Indeed, the “Asia pivot” was aimed at greater American military and diplomatic strength in the region to contain the Chinese influence in Asia. The American corporate establishment will not give up its drive for hegemonic ambitions in Asia and hence there will be no basic changes in the policy direction under the Trump administration.

However, Trump promised to withdraw from the Trans-Pacific Partnership (TPP) and asked other countries to shoulder more of the economic burden of protecting them. The working people in the region have nothing to gain from TTP, but Trump’s suggestion may, indeed, lead the concerned governments to impose more burdens on the working people due to their compulsions for increased military spending.

The economic and strategic fallout of Trump’s future Southeast Asian policy may have serious consequences in South Asia. Stricter trade protectionism and the resulting higher tariffs will have negative impact on the countries that rely on the US for their export revenue. For instance, Vietnam earns $30.5 billion from its exports to the US and Singapore would lose close to 30% of its export revenue. The Association of Southeast Asian Nations (ASEAN) region, being the US’ fourth-largest trading partner, will be seriously affected by the new wave of protectionism in the US.

The immigration policy suggested by Trump also would result in great losses for the Philippines, since four million Filipinos reside in the US. Abrupt loss of their remittances, which significantly contribute to the Philippines’ GDP, would affect the economy of the country.

Trump appears to be thinking of strengthening the US-Japan alliance in spite of his questioning of its utility on the campaign trail. His suggestion that Tokyo might be better off acquiring nuclear weapons to defend itself is an inducement for escalation of militarization in the region.

In an article in Foreign Policy, Alexander Gray and Peter Navarro, advisers for Trump, criticized Obama’s policy of “pivot” or “rebalance” to Asia. Gray and Navarro declared that “This pivot has also turned out to be an imprudent case of talking loudly but carrying a small stick, one that has led to more, not less, aggression and instability in the region.” What is, then, their own remedy? Will the US stop its ever widening military bases in the Asian region and its vast expansion of the US military? The advisers don’t have definite answer and so flexing of its military muscle by the US in the Asian region appears to be continued.

While repeatedly denouncing China, Trump promised to impose tariffs of up to 45% on Chinese exports to the US. Imposing tariffs on Chinese exports is not a new development. The Obama administration had already taken such steps, including huge tariff increases on certain types of Chinese steel of up to 522%, and on some Chinese steel corporations of 266%. However, Trump’s plans for a dramatic expansion of blatantly protectionist measures would have serious consequences, including the negative impact on US manufacturing sector.

Attacking the One China policy and directly contacting Taiwanese president showed Trump’s willingness to confront China. That would have serious effects on trade and economy.

From 1980s, Chinese exports to the US have grown from a modest US $14 billion in 1989 to almost US $500 billion in 2015. The US exports to China, grew by considerably less, reaching a peak of US $164 billion in 2014. So,the US trade deficit with China has risen to an annual average of over US $300 billion during 2011-2015. The negative balance with China accounted for more than half of the US trade deficit in the last decade.

In this context,Trump’s move to label China “a currency manipulator,” which might pave the way to imposing high tariffs on Chinese imports, would draw retaliatory steps from China. It could bar state-owned companies from doing business with American businesses. It could limit access to essential commodities, i.e., by stopping exports of so-called rare earth minerals essential to the electronics industry. And, such steps may accelerate trade wars, resulting in negative effects on global economy.

A team from Deutsche Bank released a note about the negative risks of the Trump trade agenda, which stated that “the biggest threat to growth is a possible protectionist turn, which could depress global trade and even trigger trade wars.”

Trump’s nationalistic, right-wing conservative approach may draw many ruling elites in Asian countries much closer to the new US government. But it may intensify a right-nationalist surge in the region. And it would never safeguard the interests of the working people in Asia.

N. Gunasekaran is a political activist and writer based in Chennai, India.

From The Progressive Populist, February 1, 2017

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