By FHA Shibly –
Trump’s unpredicted victory left the world in shell shock. More than shocking, it was disturbing to many countries. It accompanies issues concerning trade and human rights. His victory may reset US’s commitment with other nations. Political analysts feel that period of active US administration engagement with southeast is over.
Trump’s Triumph has led uncertainty across Asia. The countries’ strongmen are eager to know the fate of treaties and partnership between them and US.
Below are some inferences of Trump’s presidency for Asia. They are just opposite to Obama’s Asian rebalancing policy.
America’s engagement with Asian nations under Trump rule
Obama signed alliances and security partnerships with many countries. He underwrote military agreements to give security assurance to the partners.
US has valued human rights, laws and at times even took stand in enforcing political reform to get law and order prevailed. Beyond security and human rights, US has strong economic bond with partner countries, thus, making it the most prominent source of foreign direct investment in ASEAN (US trading partner).
Death of Trans-Pacific Partnership
Trump declared to end TPP in the very initial days of his presidency. Even people supported Trump by opposing TPP with the intentions of getting jobs in American hands. They shouted slogans “Make America Great Again” which went viral.
TPP is a trade agreement with 12 significant countries of the pacific brim. Under Trans-Pacific Partnership (TPP), Obama waived off trade tariffs for 12 countries to make trade sail smooth. The end of TPP will hurt Asia’s GDP growth.
With Trump’s presidency, immigration will be tough and trade would become limited. He will levy tariffs on Imports from Asian countries. This may lead to currency war.
South Asian TPP signatories (Vietnam, Brunei, Singapore and Malaysia) would face a major setback. The countries would have to trade with other advanced economies like Japan and EU.
US is Malaysia’s export market of worth 24 billion USD as reported last year. If TPP ends it will add fiscal woes in Malaysia.
Vietnam is another name to get hit by Trump’s victory. US is vietnam largest export market. With TPP fall it will have to look anywhere else to overcome the economical patch.
Similarly, other Asian TPP signatories will also not go unspared.
Trump’s policies are advancing towards Isolation
Trump feels US is acting as ‘world police’ and is less concerned about internal affairs. He also feels a lot is being spent on military, hindering in infrastructure buildings and country growth. This implies he will have less engagement and iron fisted trade with other nations especially southeast countries.
His isolation will discourage good relations and trade with other nations thus wrecking their economy.
South Asian nations affected by Trump Victory
The most vulnerable will be Phillipines. It will face tighter immigration laws. By now more than 30% of Philippine people working abroad are working in the US. The country also feel threat to its expanding business process outsourcing sector as Trump vows to get jobs back to Americans. BPO sector has a difference of 9 percent of GDP for Philippines, maximum caters from the US.
Donald’s victory is a disaster to those looking for global leadership. Still the impact it will have on China is uncertain. He mentioned China a currency manipulator, stealing jobs, competing by unfair means and vowed to impose 45% trade tariff on Chinese imports. Higher trade barriers and reduced foreign investment may weaken Yuan at rapid rates.
Analysts feels It may happen in near future as US laws allow the president to levy penal duties, 15% tariff inclusive for 150 days. He don’t have to seek congressional consent if the country face balance of payment deficit with other nations.
Other Analysts see trumps victory as China won. TPP withdrawal may benefit China. Also, Trump’s isolation policy may reduce America’s strength in Southeast Asia benefitting China to fill the void.
Under Trump rule, MNCs will be forced to shut down their overseas venture leaving the void to be filled out by China. Already, China is at pace to replace foreign tech-giants and preferring domestic companies. Trump’s isolation policy will accelerate the game.
TPP prevented China from making trade ties with many countries. After the fall of TPP, China would be the one economically benefitted nation. It will pave the way for china to employ trade ties and rule the world economy.
Trump’s isolation policy may drain skilled talent to other countries like China. This is also a win-win to China.With China, easing its immigration rule and US shutting the doors for them, It will be the next option for bright talents from over the world.
Other affected Asian Nations
South Korea will face the same backlash. In 2012 FTA, Trump accused South Korea for snatching one hundred thousand of American jobs. Trump even wants south Korea to pay for security guarantees provided by US.
Japan is also under shadow Trump’s win. The country is majorly dependent on exports and now doubts derailing of the trade pact. TPP breakdown will affect Japan majorly.
It is hard to forecast what coming 4 years will bring to southeast Asia, but even if business continues like previous years. The above drawn context will affect Southeast Asian economic interest. Trump will never take the southeast Asia heartedly like Obama.