Donald Trump would leave Asia with only bad options
Subscribe to enjoy similar stories. At the 39th ASEAN Roundtable, hosted by a research institute in Singapore on October 28th, the room was split. With Asia riven by an assertive China and a protectionist America, some attendees called for hard-headed thinking about trade-offs.
Choices will have to be made; allegiances declared, they warned. A Donald Trump victory might, after all, bring brutal tariffs. Most of the luminaries were unconvinced, however.
“On the ground, two supply chains are developing," a former Indonesian trade minister remarked. “We choose both." Asia has so far gained from the America-China trade war. “China plus one" strategies, in which firms add supply-chain nodes outside China, are common.
The result has been a boom in foreign direct investment (FDI). In Vietnam, the biggest winner, realised FDI (ie, actually deployed projects) has risen by 22% since 2021. Although few doubt Mr Trump would be disruptive, more sanguine scenarios are plausible.
China would be the White House’s main target, and the rest of Asia could benefit from the superpower’s difficulties. Blowback from business and the courts could rein in Mr Trump. To understand the divide in opinion, begin with Mr Trump’s most dangerous idea: a 10-20% across-the-board tariff, accompanied by a 60% levy on all Chinese imports.
This would undoubtedly batter Asia. America is the leading export destination for Asean countries, India and Japan, as well as the second-biggest destination for South Korea and Taiwan. Asean’s trade intensity, measured as the ratio of trade to GDP, is twice the global average.
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