With eye on US presidential polls, Chinese firms engaging in ‘Southeast Asia-washing’ brace for more tariffs

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US government data shows it notched a US$14 billion trade deficit with Malaysia across the first eight months of this year, and a US$77 billion trade deficit with Vietnam in the same period. Its trade deficit with Thailand was around US$28 billion. 

Vietnam has been “very successful” in getting firms to look at locating some or all of their production processes in the country, explained trade expert Deborah Elms.

“As Vietnam is well connected to key markets via free trade agreements, it has been an important spur to new inbound investment,” said Ms Elms. 

Some of this investment is currently coming from Chinese firms looking to diversify their risks, lower production costs or avoid high tariffs that apply to goods directly shipping from China. 

“In general, this should not pose a problem. Of course, Vietnam has to educate firms on the rules of these agreements so that firms are following the right steps to legally claim origin,” said Ms Elms of the Asian Trade Centre, a trade-related consultancy in Singapore.

“However, if Trump gets re-elected, Vietnam (especially) may face a problem as Trump is obsessed with the bilateral trade deficit numbers for goods. Vietnam sends way more products to the US than the reverse and he is likely to want to stop this,” she added.  

But American firms with sizeable business interests in, and with, China could wield some influence, believes Dr Oh Ei Sun, senior fellow at Singapore Institute of International Affairs think tank. 

Tariffs and sanctions could be “routinely waived” under heavy lobbying by such firms in the scenario of a second Trump presidency, he said.

“It remains to be seen if a second Trump administration will robustly enforce these hostile measures against China and, by extension, these US tariffs and sanctions-evading destinations in Southeast Asia,” he said.

Additional reporting by Melissa Goh

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Trump 2.0 would be no easy ride for Vladimir Putin – Asia Times

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MOSCOW—Many American elites, their media allies and card-carrying Democrats are convinced that a second Trump presidency would present Vladimir Putin with only opportunities. The reality is that a Trump 2.0 administration would likely bring more problems than the Russian leader has at present.

This soft-on-Putin narrative stems from the “Russiagate” conspiracy theory alleging that Trump was either a full-blown Russian agent or easily manipulated by Putin during his first term. Check the record, though, and it’s clear that Trump imposed more sanctions on Russia than any US president before him until Joe Biden.

Trump failed to implement campaign pledges to improve ties with Russia due to the pressure applied on him by the Russiagate accusation and the way in which some permanent members of the US military, intelligence, and diplomatic bureaucracies, spelled “deep state”, subverted his policy vision.

Trump also bombed Syria early in his presidency in response to what Russia considered to be a false flag chemical weapons provocation, which Barack Obama balked at doing in 2013 and thus called Russia’s bluff from back then.  

Another irritant in bilateral ties was the sanctions that Trump imposed on the Nord Stream II pipeline, motivated by his bid to poach the European energy market from Russia for American producers.

Russia was also displeased that Trump did nothing to encourage France, Germany and Ukraine to implement their obligations under the Minsk agreements to resolve the conflict between Ukraine and Russian-backed separatists in the Donetsk and Luhansk regions of eastern Ukraine.

These and other issues caused Russia to regard Trump’s first presidency as a lost opportunity to enter into a meaningful rapprochement and to be bitter about it in hindsight.

Biden’s term was much worse for bilateral relations, but it didn’t start that way. Biden and Putin met in Geneva in June 2021, shortly after the US leader waived Trump’s sanctions on Nord Stream II, following which Putin publicly defended his American counterpart’s cognitive state in response to a question about them.

But anti-Russian “deep state” hawks ultimately preferred prioritizing Russia’s containment over China’s, sustaining America’s security dilemma in Europe. Putin’s security guarantee requests from December 2021 were rejected, which set into motion the events that would lead to his decision to launch his “special military operation” in Ukraine in February 2022.

It’s beyond the scope of this analysis to rehash the run-up to that fateful decision, but it’s sufficient to say that the events that followed have completely changed the nature of Russia-US relations. If Trump returns to office, he’ll inherit a much more difficult bilateral situation than he did during his first tenure.

The precedent set by his inability to prevent anti-Russian “deep state” hawks from subverting his envisaged rapprochement bodes ill for his possible second term from Moscow’s perspective, considering the much greater power these officials now wield over policymaking on all Russia-related matters.

Russia’s fears that they could stage a major provocation for escalating the Ukraine conflict if Trump wins, whether before or after he’s reinaugurated, explain why Putin endorsed Biden and then Kamala Harris.

Contrary to his image in the Western mind, Putin is a very cautious leader who considers himself the consummate pragmatist. That explains why he only authorized conventional military interventions in Syria and Ukraine at what he thought to be the last possible minute before perceived windows of opportunity closed.

He’s even been constructively criticized by nationalistically minded Russians and their supporters abroad for waiting too long with both military interventions, arguing they might have been more successful had they had been launched earlier.

Putin’s endorsements of Biden and then Harris weren’t part of some “5D chess master plan”, like some have speculated, but rather were sincere reflections of his preference for dealing with the proverbial devils that he already knows than a return to Trump uncertainty.

Not only might Russia fear that the “deep state” could stage major provocations to subvert Trump’s stated plan for ending the Ukraine war within months of taking office, but Trump himself might flirt with “escalating to de-escalate” on his own.

These same “deep state” forces have wisely applied a “boiling the frogs” approach to the latest phase of the already over-decade-long Ukrainian conflict by gradually escalating US involvement and always signaling such in advance so that Russia could prepare and not overreact.

This managed warfare has helped Russia and the US manage their worsening security dilemma caused by American mission creep in the conflict, thus avoiding an apocalyptic World War III scenario sparked by miscalculation – at least up until now.

That could change if Trump is re-elected, at least from Russia’s perspective, since either he or the “deep state” could ignore these prior guardrails by escalating to de-escalate in very dangerous ways. The purpose would be to coerce concessions from Russia ahead of a seemingly inevitable grand peace deal.

Putin has staked his reputation on at least obtaining control over the entirety of the four former Ukrainian regions that Russia now claims so he will be very reluctant to freeze the conflict before that is secure on the battlefield.

Perhaps a series of mutually acceptable compromises between Russia and the US (which could coerce Ukraine into complying with whatever Washington agrees with Moscow) might be reached under Trump. But even if the “deep state” doesn’t subvert such a deal, other problems might quickly arise for Russia.

If the aforementioned compromises aren’t paired with sanctions relief for Russia, then Trump might revert to his preferred use of these means to pressure India, Turkey, the UAE and others into sanctions compliance to Russia’s detriment.

His well-known dislike of Iran could also see him repeat his prior “maximum pressure” policy against Tehran at the expense of Russia’s efforts to develop the North-South Transport Corridor (NSTC), which runs through Iran and connects Russia with the Gulf States, India and further afield to Africa and Southeast Asia.

In that scenario, Russia would risk becoming even more disproportionately dependent on China than it arguably already is, which it has sought to hedge and avert by using India as a counterweight in various ways.

A Trump 2.0 presidency would only present opportunities for Russia if none of those three scenarios – “escalating to de-escalate”, doubling down on sanctions enforcement, and choking off the NSTC – transpires, a fair compromise ends the Ukraine war and the US “Pivots (back) to Asia” and out of Europe pronto.

Trump’s plan for NATO, as reported by Politico, could enable Russia to more effectively manage their security dilemma in Europe with a view toward negotiating a new security architecture there.

American troops could thus be freed up for redeployment to the Asia-Pacific to contain China, shifting the center of the New Cold War to the other side of Eurasia and relieving some of the pressure applied on Russia over the past two and a half years.

Moreover, encouraging the Europeans to take more responsibility for their own security could lead to a thaw of sorts in their ties with Russia, as would the lifting of some sanctions.

US prioritization of China’s (and to a lesser extent Iran’s) containment over Russia’s in a second Trump presidency would relieve pressure on Russia in Europe, though at the cost of creating new problems that might threaten its interests further afield.

The heightened risk that a hot war could break out by miscalculation between the China and the US, or at least between China and some of the US’ top regional partners like Japan, the Philippines, and/or Taiwan, would destabilize the world much more than the Ukrainian conflict has over the past two and a half years.

That’s because the Asia-Pacific is the center of global economic growth, and a major conflict there would likely disrupt key supply chains. This is especially so for the tech sector, specifically with regard to the high-end chips that power the so-called “Fourth Industrial Revolution” as well as state-of-the-art military equipment, thus limiting Russia’s supply even more than currently due to US-led sanctions and raise the risk it falls further behind peers and rivals.

Even if a hot Asia war is avoided and supply chains remain intact, Trump would be expected to apply tremendous pressure on Russia to distance itself from China, perhaps through a carrots-and-sticks approach of the sort that he implied during his live interview with Tucker Carlson on Thursday night during a fundraiser in Arizona.

At the event, Trump claimed that Biden “allowed them (China and Russia) to get together. It’s such a dangerous thing. The stupidity of what they have done… I’m going to have to un-unite them, I could do that too.”

Considering the trade war that Trump waged against China during his first term and his explicitly declared goal of ending the Ukraine war “as soon as possible” if he’s re-elected, Trump might try to meld the two initiatives to “un-unite” China and Russia as part of a new divide-and-rule strategy.

This could put Russia in a dilemma of either accepting whatever deal  Trump might propose at the expense of reversing some of the bilateral progress made in with China since 2022, or rejecting it at the cost of Trump dangerously escalating to de-escalate in Ukraine with the potential for a hot war with the US and associated miscalculation risks.

Cautious and pragmatic Putin might thus prefer to retain the presently more predictable trajectory of US-Russian ties in the New Cold War under Harris than risk a new era of global uncertainty under Trump.

Andrew Korybko is a Moscow-based American political analyst who specializes in the global systemic transition to multipolarity. He holds a PhD in political science from the Moscow State Institute of International Relations.” Follow him on X at @AKorybko

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Indonesia adds Google Pixel phones to ban list with iPhone 16

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Southeast Asia’s biggest economy has a young, tech-savvy population with more than 100 million people under the age of 30 that tech companies are seeking to capitalise on. Around 22,000 Google Pixel phones had entered Indonesia this year, according to industry ministry data. Indonesia’s smartphone market shipment share in theContinue Reading

Indonesia Investment Authority and DB Investment Partners form bn partnership | FinanceAsia

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The Indonesia Investment Authority (INA) and investment firm DB Investment Partners (DBIP) have formed a partnership, through an Investment Framework Agreement (IFA), to help Indonesia’s economic development. 

INA and DBIP will collaborate by leveraging each other’s market access and investment expertise to deploy at least $1 billion within the next five years.

This joint investment initiative is looking to address needs across capital structures and strategic sectors in Indonesia or with an Indonesian nexus, according to a statement. 

INA and DBIP will also cooperate to support eligible projects in Indonesia through knowledge and network sharing initiatives to help Indonesia’s sustainable economic development. Both parties are seeking to invest “in innovative financial solutions within key sectors”, according to a media statement. 

The investment framework has been developed to cater to the complex and evolving capital needs within the market.

Ridha Wirakusumah, chief executive of of INA, stated, “This partnership enables us to leverage DBIP’s premier platform while we bring our local knowledge to the table, enhancing our joint investment strategy. This allows us to tailor investments that are not only strategic but also diverse, reflecting the dynamic needs of Indonesia’s growing economy.”

Wirakusumah added: “Through this collaboration, we seek to harness DBIP’s proven capabilities to meet the dynamic needs of Indonesia’s growing economy, and each investment is carefully designed to create bespoke solutions that address needs across capital structures and strategic sectors in Indonesia.”

Raheman Meghji, chief investment officer of DBIP, said: “The Indonesian economy has tremendous growth potential and we look forward to playing our part in the story going forward.”

DB Investment Partners (DBIP) is a Deutsche Bank Group company and a global private capital investment firm, which is independently authorised and regulated by the UK Financial Conduct Authority (FCA).

FinanceAsiia has reached out for more information about the partnership. 


¬ Haymarket Media Limited. All rights reserved.

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Commentary: Najib Razak’s 1MDB apology and the art of redemption in politics

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REDEMPTION IN POLITICS

Redemption in politics is not a one-size-fits-all proposition. A successful strategy lies in the ability to capitalise on the mistakes of others while simultaneously navigating one’s own controversial legacy. It requires a nuanced understanding of historical context, collective memory and the public’s appetite for a good story.

Whether through heartfelt apologies, nostalgia-laden returns, or unapologetic defiance, the strategies employed will invariably speak to a profound understanding of human dynamics – an acknowledgement that, ultimately, voters not only seek leadership free of missteps but also crave authenticity amidst the inevitable failures from simply being human.

As Najib navigates his path to redemption, seeking to reclaim his stature within a political environment that has drastically shifted, he faces formidable challenges. However, with Malaysia’s ever-changing political landscape, and with the possibility of serving the rest of his sentence in house arrest, Najib may find renewed opportunities ahead.  

As for the rest of Malaysia, the electorate will continue wrestling with the complexities of forgiveness and accountability.

Dr Sophie Lemiere is a political anthropologist who specialises in Malaysian politics, and has held research and teaching positions in major universities across Europe, the United States and Southeast Asia. She is currently Adjunct Fellow at the Center for Strategic and International Studies, a Washington-based think tank, as well as Research Fellow at College de France in Paris. She is the founder of SoCO, a political consulting firm in Kuala Lumpur.

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Whether Trump or Harris wins, US must redefine its Asia strategy – Asia Times

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This article was orginally published by Pacific Forum. It is republished with permission.

Just days away from what appears to be an extremely close US election, pundits are hastily trying to make sense of both major candidates’ potential foreign policy platforms. In the battle between Vice President Kamala Harris and former President Donald Trump, each has sought to portray the other as somehow weak on China in an effort to out-hawk the opposition.

Trump has called for 60% tariffs on all of Chinese imports, thereby threatening global financial markets that are still reeling from Covid-19 pandemic recovery and struggling to adjust to US-China decoupling in critical technology sectors.

Harris has insisted that her goal as president would be “making sure the United States of America wins the competition for the 21st century.”

To some national security commentators watching from Asia, there is little difference between two candidates. Both, after all, view American power as indispensable and see their country locked in zero-sum competition with China.

That view is at odds with and keeps them and their political parties from coming to terms with two difficult truths, recognition of which is prerequisite to construction of a more successful Asia strategy:

  • The United States no longer enjoys unrivaled status as the world’s sole superpower.
  • China is not universally viewed with suspicion – let alone hostility – throughout the region.

True, by most objective measures the United States’ position in Asia at the end of 2024 is more secure than it was in 2020.

The Biden administration has secured access to nine bases in the Philippines as part of the Enhanced Defense Cooperation Agreement put on hold under Rodrigo Duterte (2016-2022). In the span of one month in 2023, the administration established a new US-Japan-South Korea trilateral with its two East Asian allies and concluded a double upgrade in the US-Vietnam Comprehensive Strategic Partnership.

The Lowy Institute’s newly released Asia Power Index confirms this positive trendline, finding that the United States remains the most powerful country in Asia, and that while Beijing continues to chip away at Washington’s lead, “China’s power is plateauing” rather than surpassing that of the United States.

Despite those noteworthy accomplishments, however, the longer-term trendline for the United States is concerning.

As Washington continues to project a strategy that implicitly assumes American primacy while it abstains from the evolving regional economic architecture by rejecting free trade deals, the United States is increasingly losing influence in Asia.

Official inattention and inconsistency are largely to blame for the current situation and can be corrected – but time is running out.

While US policymakers frequently make the point that the United States is the largest source of foreign direct investment in Southeast Asia, this is only true if you consider total investment stocks. According to new data from the Lowy Institute, over the last decade China has invested significantly more in the region than has the United States ($218 billion to $158 billion).

Wary of alienating a country that is their biggest trading partner and an inescapable geographic reality, Southeast Asian states are unwilling to join what they perceive as US-led efforts to contain China.

According to a recent survey by the ISEAS-Yusof Ishak Institute, more Southeast Asian states now say that they would choose China over the United States if forced to pick between the two, the first time Beijing has eclipsed Washington as the partner of choice.

Increasingly bellicose anti-China rhetoric in Washington – never more evident than in an election year in which each party seeks to outbid the other as tougher on China – has not been balanced by a positive vision for regional stability that embraces economic statecraft or conventional tools of diplomacy.

Whether Democrat or Republican, the next administration has an opportunity to reframe Washington’s Asia policy in response to regional demand for a more active and balanced US role in the region. The incoming president should consider three guiding principles to get the balance right.

First, Asian states want a more benign and sustainable US presence, one not simply predicated on security partnerships and military bases but capable of delivering much needed public goods such as economic investment and development finance to meet the needs of Asia’s rapidly growing middle classes.

Asia’s middle class is expected to grow to 3.5 billion by 2030, making it the largest in the world. A 2019 report by the Asian Development Bank estimated that the infrastructure needs of developing countries in the Indo-Pacific would amount to $1.7 trillion a year through 2030 when climate change adaptation was factored in.

Yet according to one recent study, official development finance to Southeast Asia in 2022 was at its lowest level since 2015 in real terms.

Secondly, it’s not necessary for the United States to be the single most powerful player for it to make positive contributions to regional order. Washington policymakers are deluding themselves if they are crafting regional strategy from an assumption that the US still enjoys unchallenged primacy in Asia.

Primacy should no longer be the lodestar of US strategy and is an unrealistic goal anyway. A foreign policy based on primacy squanders scarce resources and overstretches policymakers at a time when American voters are most concerned with the economy and healthcare.

Third, smaller states want options. While it has become cliché, the reality is that Asian states do not want to be forced to choose between China and the US. China has been the dominant economic partner for the entire region for some time, and it isn’t going away.

By contrast, the United States is seen as fickle and often a source of instability. In Indonesia and Malaysia, citizens have boycotted American companies such as McDonald’s and Starbucks to express their outrage over US support for Israel’s war in Gaza.

Indonesia and Malaysia are both significant regional partners for Washington and proverbial “swing states,” whose populations frequently put pressure on their political leaders to distance their countries from the United States. Policymakers in Washington therefore need to be more cognizant of how their country is perceived in the region.

In light of these limitations on US power and influence, the next president should recognize the value of America’s alliances and partnerships across the globe, which act as a force multiplier when rowing in the same direction. Washington should continue to empower partners and allies that are willing to play constructive roles in preserving a rules-based (not necessarily liberal) international order.

Ultimately, neither candidate is likely to follow these prescriptions to a tee. Neither party shows any sign of abandoning the current trajectory, which privileges rivalry with China at all costs with a vaguely defined goal of “winning” that competition.

Primacy may be too baked into the cake for any US leader to let go of. In a climate of great power competition globally and political brinkmanship at home, no candidate sees anything short of US dominance as a viable platform.

However, the next American leader may be forced to reconcile with shifting voter preferences. While foreign policy is never a priority issue in any US election, a large percentage of Americans say that it ranks relatively high on their list of concerns: 62% of all voters indicate that foreign policy is very important in determining whom they will vote for (that breaks down to 70% of Trump supporters and 54% of Harris supporters).

Each candidate has sought to be seen as the candidate of change. While the rest of the world is unlikely to view this election that way (both are incumbents to varying degrees), change is precisely what US Asia strategy needs. The election provides a valuable opportunity to reimagine US goals in light of 21st-century global realities.

Hunter Marston (@hmarston4), a PhD candidate at Australian National University, is a Southeast Asia associate with 9DASHLINE and an adjunct research fellow with La Trobe Asia.

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Silver screen success

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Over the past three years, Thailand’s film industry has gained momentum following the pandemic restrictions. People are spending more time outside and returning to cinemas.

Jina Osothsilp, Chief Executive Officer of GDH 559 Co, Ltd.

Jina Osothsilp, Chief Executive Officer of GDH 559 Co, Ltd.

This year, the Thai blockbuster family drama Lahn Mah left millions of filmgoers across Southeast Asia in tears.

Known in English as How to Make Millions Before Grandma Dies, it was selected as Thailand’s entry at the 97th Academy Awards.

Since it premiered six months ago, the movie has raked in almost 2 billion baht worldwide.

It was the highest-grossing Thai film of 2024, with 184 million baht in combined receipts in Bangkok and Chiang Mai alone as of early October.

The National Federation of Thai Film Associations has selected it to represent Thailand as its submission for the best international feature film category at the 97th Academy Awards.

Not only is the selection the latest achievement for the blockbuster, but it also represents the culmination of the work of GDH studio head Jina Osothsilp and her team, powered by the backing of its studio.

Ms Jina, chief executive of GDH 559, whose name stands for gross domestic happiness, said GDH has been pushing Thai films to screens abroad since its inception in 2016, especially in Southeast Asian countries such as Singapore and Malaysia as well as other Asian markets such Taiwan, Hong Kong and South Korea, to great acclaim.

The films shown abroad were mostly horrors and thrillers, genres seen as having universal appeal.

But the company has recently been trying to push out comedies and local thrillers such as How to Make Millions Before Grandma Dies, a film which explores concepts such as filial piety and patriarchy through a story about love and relationships across different generations in a family, as another step to raising the popularity of Thai films.

“Our company was founded on the principle of producing quality films that meet international standards, elevating the Thai film industry for future generations,” said the GDH executive. She reminisced about her early days at an advertising company, where she and her team pushed creative boundaries to deliver impactful commercials.

These principles remain unchanged at GDH, where the team strives to think outside the box, creating entertaining films that balance commerce and art.

“The company does not solely target mass-market films for guaranteed box office success; we also embrace diverse ideas,” said Ms Jina.

Moreover, films do not have a perfect formula to guarantee success; thus, the team must be scrupulous regarding every detail and meticulous about every production step. Everyone from scriptwriters, lighting crew and camera operators to actors, producers and directors must work together in unison, she added.

“When the film is released, regardless of the audience feedback, we believe we’ve given it all,” Ms Jina said.

“If audiences are inspired by the film’s message and apply it to their lives, which change themselves, those around them and society in a positive and meaningful way, that is the true success of filmmaking,” she added.

Ms Jina has always believed that behind every success is a great team, whether it’s the talented actors or the skilled crew members behind the scenes.

“Everyone is part of an amazing team, and we believe that the success of this film will encourage filmmakers to create fresh, new content, elevating the standards of the film industry,” she said.

“We feel that family films about love and gratitude are truly universal. Initially, there was some concern that a movie like this might not make a lot of money. But we wanted to create a good film, and we believe that good films should enlighten the audience. When we, as a board, read the script, we all admired it and believed it was an excellent script. We felt that if we didn’t make this movie, we’d regret it deeply,” Ms Jina said.

“A tearjerker might not guarantee success at the box office, but we believed in the quality of the script and the team’s passion to make it happen,” she added.

Such instincts proved right and the movie received positive feedback and an overwhelmingly warm welcome from audiences across the country and abroad. On the promotional tour in Vietnam, many young people left the cinema in tears and ran up to hug Grandma Taew, the 78-year-old actress who played the film’s titular matriarch, remarking how the movie reminded them of their grandma and thanking the company for making a great film.

She said the company has been passing on opportunities for new directors who have experience in making TV series and commercials to join the team under the supervision of the producers, bringing diverse ideas to the screen.

In August, the company released the romantic drama The Paradise of Thorns, the first feature film directed by Naruebet Kuno, known for the famous TV series I Told Sunset About You in 2022.

The film tells the story of Thongkam and Sek, a gay couple who own a home and durian orchard in Mae Hong Son.

Sek dies unexpectedly, and the property is inherited by Sek’s mother, leaving Thongkam without legal rights to their shared property.

The fight for his rights is a reflection of the challenges faced by same-sex couples in Thai society. The film has been selected for screening at the 49th Toronto International Film Festival.

Ms Jina said the success of Bad Genius (2017) in China offers solid proof that Thai filmmakers are capable of generating excitement in the international market.

Jina Osothsilp

Chief Executive Officer of GDH 559 Co, Ltd.

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To challenge China, the next US president should fix trade – Asia Times

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This article was originally published by Pacific Forum. It is republished with permission.

In the September presidential debate, former President Donald Trump and current Vice President Kamala Harris had sharply contrasting views on issues ranging from energy to immigration to policy toward China and the Middle East.

Yet, both agreed that tariffs were useful for US foreign policy.

The debate started with tariffs, and the two candidates went back and forth on the likelihood that the new tariffs would cause inflation. By the end of the debate they returned to their discussion on tariffs, where they disagreed on the sectors where they thought tariffs should be imposed and on which countries should be targeted – but agreed that tariffs are useful.

Regardless of the detrimental consequence of tariffs, including inflation, the candidates emphasized the need to impose them to protect critical sectors and spur domestic manufacturing.

The debate clearly demonstrated the arrival of a new era in the United States, one in which the two parties are recalibrating the balance between national security and economics.

Biden’s trade war and Trump’s

The United States has a growing list of grievances about Beijing’s mercantilist practices. These include

  • widespread market-access restrictions, from equity caps on investment to regulatory harassment;
  • pervasive subsidies directed at national champions that tilt the competitive playing field against foreign firms in China and in third markets; and
  • widespread forced technology transfer and intellectual property theft.

To protect domestic industries vital to national security and incentivize China to change its practices, both the Trump and Biden administrations have imposed tariffs on Chinese products.

In March 2018 President Trump announced the administration would impose a 25% tariff on imported steel and a 10% tariff on imported aluminum. Following the announcement, the Trump administration imposed several rounds of tariffs on steel, aluminum, washing machines, solar panels as well as goods specifically from China, impacting more than $380 billion worth of trade at the time of implementation and amounting to a tax increase of nearly $80 billion.

President Biden said in a 2019 speech: “President Trump may think he’s being tough on China, but all he has delivered is more pain for American farmers, manufacturers, and consumers.”

Yet, the Biden administration has largely upheld existing tariffs, with some exceptions. These include suspending certain tariffs on European Union imports, replacing tariffs with tariff-rate quotas (TRQs) on steel and aluminum from the EU and UK, as well as steel from Japan, and allowing tariffs on washing machines to expire after a two-year extension.

In May 2024, the Biden administration announced additional tariffs on $18 billion of Chinese goods, resulting in a tax increase of $3.6 billion.

Authors’ compilation derived from White House Fact Sheet

President Biden’s trade policy differs from the former president’s in that he seeks to increase production and jobs in a select group of emerging high-tech industries. Additionally, he has tightened trade restrictions with China under the “Small Yard, High Fence” approach, limiting the sale of American technology to Beijing while directing federal subsidies to US manufacturers competing with Chinese manufacturers. Another key difference in President Biden’s trade policy is that his strategy relies on bringing international allies together to counter China through a mix of domestic incentives and potentially coordinated tariffs on Chinese goods.

Weighing Washington’s tariffs on Beijing

Among the reasons countries impose tariffs are:

  • to protect domestic industries vital to national security,
  • to incentivize foreign countries to change their practices, and
  • to raise revenue.

The Trump and Biden administrations both stated they imposed tariffs for the first two reasons.

The Trump administration argued that tariffs were “imposed to encourage China to change its unfair practices” as they “threaten United States companies, workers, and farmers.”

Similarly, after the Biden administration announced tariff hikes on May 14, the White House announced tariff increases were designed “to protect American workers and American companies from China’s unfair trade practices,” including forced technology transfers and theft of intellectual property. The administration also pointed out China’s “growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities.”

The biggest problem with the latest round of tariffs imposed in May is that it cannot resolve the problems the Biden administration sought to tackle. Rather than focusing on changing China’s forced technology transfers and protecting intellectual property rights, the tariff increases were more about boosting US industries.

Furthermore, doubts persist about whether tariffs truly benefit the US economy. By raising the cost of parts and materials, tariffs increase consumer prices, and reduce private sector output. This will eventually reduce the return to labor and capital, incentivizing Americans to work less and invest less.

There are numerous studies claiming the negative economic consequences of tariff policy. In August 2019, the Congressional Budget Office (CBO) estimated that the negative GDP effects of recent tariff increases had outweighed the positive ones and were decreasing real output by 0.3%. Meanwhile, the Tax Foundation estimated in July 2023 that the long-run effects would bring GDP down by 0.2% and total employment down by 142,000 jobs.

Another issue with the extended tariff policy is that China has evaded its impact. The US-China trade war and rising risks of investing in China prompted global companies to adopt a “China Plus One” strategy, diversifying production into ASEAN countries. These nations became attractive alternatives to replace China for their relatively young populations, free trade agreements with key players, and prime geographical locations.

However, it wasn’t just American firms relocating to Southeast AsiaChinese manufacturers also shifted operations there. Currently, Chinese firms attempt to bypass tariffs by selling components to manufacturers in ASEAN, where the final goods will not be regulated by the US. In the electric vehicle industry, Chinese companies are rapidly expanding into Southeast Asia, making it difficult to regulate them under current trade policies.

Harming allies

Successive administrations have pursued protectionism, from Trump’s steel and aluminum tariffs to Biden’s Inflation Reduction Act subsidies. Unfortunately, these protectionist policies are also hurting friendly countries. The steel and aluminum tariffs also affect the European Union and Japan, while the subsidies from the Inflation Reduction Act have created challenges for US allies trying to conduct business in the US.

In response, countries like Japan, the EU, Canada, Australia, and others have adopted their own domestic subsidies.

Getting trade policy right

If the new administration aims to achieve the stated goal of changing China’s unfair trading practices, the new president should consider reviewing its trade-distorting policies and reigniting a policy of market-driven economic integration with its allies.

To regulate China’s non-market, export-driven model of growth, the administration should work through international organizations and institutions, just as it did during the recent G7 meeting in Italy. Through channels such as the G7, the WTO and the OECD, the US could build an international coalition demanding that Beijing change direction. If those efforts should prove ineffective, the administration could authorize collective action to rein in China’s exports while simultaneously revitalizing the market economy.

Su Hyun Lee ([email protected]) is a researcher focusing on US-China relations and economic security at the Korea National Diplomatic Academy. Previously, she was a 2021-22 resident Korea Foundation fellow at the Pacific Forum.

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Asean trio agree on clean air initiative

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Thailand, Laos and Myanmar pledge to do more to address shared haze problems

PUBLISHED : 29 Oct 2024 at 20:25

Haze attributed mainly to crop burning hangs over Chiang Mai in December 2023. (Photo: Northern Development Foundation)
Haze attributed mainly to crop burning hangs over Chiang Mai in December 2023. (Photo: Northern Development Foundation)

Three Southeast Asian countries — Thailand, Laos and Myanmar — have launched a “Clear Sky Strategy 2024-2030” to solve the problems of cross-border smoke and haze pollution.

The launch ceremony took place on Tuesday at the Ministry of Foreign Affairs in Bangkok, with minister Maris Sangiampongsa joining Chalermchai Sri-on, the Minister of Natural Resources and Environment.

Also taking part were Bounkham Vorachit and Khin Maung Yi, the natural resources ministers of Laos and Myanmar, respectively.

Asean member states signed the Asean Agreement on Transboundary Haze Pollution in June 2022. In April 2023, Thailand hosted an online meeting with Laos and Myanmar to discuss how to tackle the intensifying haze situation in the three countries.

The latter meeting agreed to develop a “Clear Sky Strategy” that will serve as a work plan and a guide for sustainable cooperation.

“Clear” is an acronym for Continued Commitment, Leveraging Mechanisms, Experience Sharing, Air Quality Networks, and Response. Thailand will host a conference for all those who signed up for the agreement in Bangkok late this year.

Mr Maris said the action plan was born out of the necessity for Southeast Asia to address pollution from industry, transport, agriculture and, particularly, forest fires.

“As we approach the end of this year, when the air temperature begins to drop, we can expect PM2.5 to blow up again. Therefore, this plan addresses the issue in the region,” he said.

“It will also help us to harness cooperation with partners around the world.”

Mr Chalermchai said his ministry had stressed tackling forest fires and transboundary haze by “working closely with both (neighbouring) countries to create a concrete outcome”.

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South Korea eyes a rich BRICS road to the Global South – Asia Times

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In 2024, the BRICS nations continue to consolidate their influence in the global arena, collectively accounting for over 40% of the world’s population and approximately 30% of global GDP in purchasing power parity terms.

According to recent IMF projections, BRICS countries are set to contribute over 50% of global GDP growth in the coming years, underscoring their increasing weight in the international economic landscape.

China and India, in particular, remain the principal economic engines of the group, each maintaining robust trajectories fueled by China’s Belt and Road Initiative (BRI) and India’s ascendancy as a prominent manufacturing hub.

Complementing these giants, Russia leverages its vast energy resources, Brazil capitalizes on its agricultural and natural wealth and South Africa anchors the coalition’s outreach on the African continent. This strategic diversity enables BRICS to wield considerable influence in shaping global economic and political agendas.

Today, the BRICS is positioning itself as a counterweight to traditional Western-led financial institutions like the IMF and World Bank, aiming to restore balance and justice in the emerging global economic order.

Central to this effort is the New Development Bank (NDB), which began with an initial capital of US$100 billion to fund infrastructure and sustainable projects, extending beyond the BRICS members to other emerging economies.

This initiative, combined with efforts to promote trade in local currencies, reflects a strategy to reduce reliance on dollar-based systems and challenge Western dominance in global financial governance.

Moreover, BRICS has increasingly positioned itself as a representative of the Global South, advocating for principles of non-interference and mutual development.

The 2024 BRICS summit in Russia reinforced this by welcoming Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE, highlighting its ambition to form a more inclusive grouping with greater global influence.

Today, BRICS is not merely an economic grouping; it represents the desire of the Global South for a shift toward a multipolar global order, with the grouping increasingly diverging from Western narratives on critical geopolitical issues.

This rising influence is reflected in efforts to reshape the international financial architecture, promote new development models, and challenge the dominance of Western-led institutions in international politics.

The group’s coherence in advancing the interests of the Global South and its proactive pursuit of economic sovereignty and technological self-reliance is pivotal to its vision of a new world order.

Strategic Seoul positioning

South Korea’s rise as a major economic and technological player has positioned it as an influential actor in global geopolitics. As a significant member of the G20 and an active participant in multilateral forums, South Korea has consistently advocated for greater representation of emerging economies in global governance institutions.

Despite its non-membership in BRICS, South Korea shares many of the coalition’s aspirations, particularly in diversifying economic partnerships and reducing dependence on a Western-centric international order.

South Korea’s strategic policies, such as the New Southern Policy (NSP), emphasize greater engagement with emerging economies in South and Southeast Asia, regions where BRICS nations, particularly India, hold considerable sway.

Furthermore, South Korea’s Indo-Pacific strategy aligns with BRICS interests, particularly in fostering connectivity and infrastructure development, providing fertile ground for deeper engagement on both bilateral and multilateral platforms.

For South Korea, closer cooperation with BRICS offers numerous benefits. By actively engaging with BRICS-led initiatives such as the NDB, South Korea can gain a foothold in emerging financial frameworks, reducing its reliance on traditional Western financial systems and broadening its influence in global economic governance.

This involvement also positions South Korea as a neutral partner that bridges traditional Western alliances with emerging powers in BRICS, enhancing its diplomatic leverage and strategic flexibility in an increasingly multipolar world.

The diversification of its export markets, supply chains, and diplomatic engagements through partnerships with BRICS nations will be essential for maintaining competitiveness and securing long-term interests.

Collaborating with BRICS institutions also provides South Korea the opportunity to access emerging markets and participate in the growing regional integration efforts among BRICS members and their allies.

India-South Korea in BRICS embrace

India and South Korea are already strong strategic and economic partners. However, as BRICS expands its influence in the global arena with India as a key player, it presents a unique opportunity for South Korea to enhance its global status by strengthening its bilateral ties and collaborating more closely on global security and strategic issues.

Both nations possess complementary strengths and shared interests, making cooperation increasingly beneficial amid shifting global dynamics. India and South Korea have established a robust economic partnership, but there is still significant potential to deepen trade and investment ties.

In the wake of BRICS’ rise, the two countries could focus on expanding the Comprehensive Economic Partnership Agreement (CEPA) to include areas such as digital trade, intellectual property rights, and services. This would not only provide preferential market access and boost bilateral trade volumes but also help South Korea strengthen its ties with the Global South.

Additionally, South Korea can leverage India as an alternative manufacturing hub amid shifting global supply chains, particularly in electronics, semiconductors and automotive manufacturing.

Participation in India’s ambitious infrastructure projects, such as the National Infrastructure Pipeline (NIP) and the Smart Cities Mission, presents further opportunities for Korean firms to expand their influence and capitalize on India’s rapid growth trajectory, reinforcing South Korea’s engagement with BRICS countries.

The evolving geopolitical landscape demands stronger strategic ties between South Korea and the Global South. Closer cooperation with India in maintaining a free and inclusive Indo-Pacific region, enhancing naval coordination, and strengthening joint efforts in counter-piracy and counterterrorism operations will bolster regional security and stability, enhancing South Korea’s role as a net security provider.

Moreover, the defense industries of both countries offer scope for collaboration in areas such as co-production of defense systems and joint development of critical technologies like missile defense, drones, and cybersecurity, reducing the Global South’s dependence on Western defense industries for national defense capabilities.

Both India and South Korea are leaders in innovation and technology, and collaboration in emerging fields such as artificial intelligence, renewable energy, quantum computing, and green technologies can yield substantial benefits not only for their national economies but also for the wider region and the Global South.

South Korea’s leadership in semiconductors can further support India’s ambitions to build a robust semiconductor ecosystem through joint investments and technology transfers, thereby boosting India’s position within the Global South.

Strengthening cultural ties and enhancing people-to-people exchanges are essential for sustaining deeper collaboration. By deepening academic exchanges, providing scholarships, establishing joint research centers, and promoting cultural collaborations in areas such as film, music, and cuisine, South Korea can enhance mutual understanding and support broader partnerships with India.

This cultural engagement can serve as a gateway for South Korea to connect with BRICS nations and the Global South, which has been a challenge due to its close ties with the United States and Western-dominated institutions. Developing deeper cultural relations with India can correct this diplomatic anomaly and allow South Korea to extend its engagement beyond the US and the West.

India and South Korea share common values of democracy, development and international cooperation. With the rise of BRICS, India can act as a bridge, bringing South Korean perspectives into multilateral dialogues. Joint efforts in platforms like the G20, UN, and ASEAN can enhance diplomatic influence and promote shared interests, including global governance reforms, climate action and cybersecurity.

Sustainability remains a key concern for South Korea. Collaborative projects with India and BRICS member countries in renewable energy infrastructure, smart grids, electric mobility, and autonomous transportation systems can contribute to mutual energy security and support a sustainable future while integrating South Korea’s economy more deeply with the rising Global South. By focusing on green technologies, India and South Korea can play a pivotal role in the global energy transition.

South Korea’s engagement with BRICS, especially through its strengthened partnership with India, offers a strategic pathway for enhancing its global influence and securing its long-term interests in an evolving multipolar world.

A robust partnership for a new era

As a member of the US-led security order in Northeast Asia and heavily dependent on the United States for its security and economic prosperity, it may not be easy for South Korea to become a member of BRICS in the near future.

However, as the global order evolves with the rise of BRICS, South Korea is uniquely positioned to enhance its cooperation and engage in BRICS initiatives. The rise of BRICS signifies a shift towards a multipolar global order, wherein traditional power dynamics are being redefined, and emerging economies are asserting their influence on the world stage.

By proactively engaging with BRICS, South Korea can secure strategic advantages, reduce dependency on traditional Western institutions, and expand its economic and geopolitical reach.

South Korea’s strategic positioning as an intermediary between Western alliances and BRICS nations presents an opportunity to shape regional and global dialogues, ensuring that its voice remains influential amidst shifting power structures.

By focusing on strategic, economic, and technological collaboration with India and engaging with the broader BRICS coalition, South Korea can protect its interests, seize new opportunities and bolster its status in an increasingly multipolar world.

The foundation of South Korea’s partnership with India rests on shared values, mutual trust, and complementary strengths, making their cooperation pivotal for navigating the uncertainties of a changing global landscape.

Actively engaging with BRICS allows South Korea to align itself with a coalition that is reshaping the global order, securing its position as a key player in the evolving multipolar landscape, and expanding its influence on the global stage.

This proactive engagement not only enhances South Korea’s diplomatic and economic leverage but also solidifies its role as a dynamic actor in a redefined global order, positioning itself as a bridge between emerging powers and established global players.

It is time for South Korea to adjust its diplomatic strategy to claim its due place in the emerging new order in the region.

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