US President Donald Trump will surely have a relook at the trade figures and deals with four Asean countries, namely Singapore, Malaysia, Indonesia and the new Beijing ‘supporter’ the Philippines.
So far, they have escaped Trump’s glare on trade, but he may yet come looking. The U.S. runs trade deficits with all of them, in some cases quite big ones, said Bloomberg.
The US-based news network said Trump’s exit from the 12-nation Trans-Pacific Partnership, his attacks on the trade policies of Japan, China and South Korea, and a Republican push for tax reforms that would impose a levy on U.S. imports from all countries should be of concern to these Asean nations.
It is clear that a protectionist era is taking shape in the US, and it will hurt growth.
Trump is likely to look at countries with which the US runs a trade deficit may be particularly vulnerable to attacks.
His advisors have handed him a paper in which they pinpointed America’s trade gaps as a cause for what they described as its “slow growth plunge.
Trump will definitely target Asian nations that are exporting an awful lot to the US.
No one knows whether the answer will be to import more from the US, or scramble and find other markets for the upcoming loss of trade with the US?
Deborah Elms, executive director of the Asian Trade Centre, a Singapore-based consultancy said: “Trade deficits are a problem. At any moment there could be an angry Donald Trump in your face or a Twitter coming your way. Have other countries woken up to this problem? Perhaps not.”
Bloomberg published a list of Asian nations with a trade surplus with the US. Here, we reproduce the list for Asean countries.
Trump may look into Malaysia’s suspended Free Trade Agreement (FTA) talks with the US. It started in June 2005 and was suspended in 2009 on the basis of US support for Israel during the Gaza War.
Subsequently, Malaysia entered into the TPP talk but is now focusing on trade with the Asean.
Trade with the US is governed by the WTO rules and the Trade and Investment Framework Agreement (TIFA) since 2002.
FTA talks started in 2004 and were suspended in 2006 ahead of a military coup in Thailand.
The U.S. trade deficit with Thailand is driven by electrical machinery and rubber.
Trade with the US is governed by WTO rules and TIFA since 1996.
Indonesia’s trade surplus comes from exports of knitwear, rubber and shoes.
The U.S. exports aircraft, soybeans and machinery to Indonesia.
The countries last met in April 2016 to discuss trade issues, including ways to improve Indonesia’s intellectual property protection, and proposals for cooperation on issues like unregulated fishing.
Trade with the US is governed by WTO Rules and TIFA since 1989
The Philippines may be vulnerable to a proposed “border tax” because its export mix is heavily reliant on electronic and capital goods, which can be easily replaced by U.S.-based producers, according to Credit Suisse Group AG.
President Rodrigo Duterte has prioritised trips around Asia to take advantage of trade and investment opportunities in the region, including with China.
Vietnam could be an exception, though, despite its large trade surplus with the US.
Trump may need Vietnam on the US side, in order to challenge China in the South China Sea dispute given that the Philippines showed keen interest to abandon its traditional military ties with the US.
Duterte has also prioritised China over the US in the South China Sea conflict and this may pose a problem for Washington.
A problem that it can probably overcome to a certain extent by wooing Vietnam to remain on its side.