Many Asian leaders are viewing the U.S. Republican presidential nomination race with concern, particularly regarding the potential impact of Donald Trump’s return to power on their countries. Trump’s possible victory on Super Tuesday could secure his nomination, setting up a rematch with President Joe Biden in the November election. Many of the world’s leading think tanks view this scenario as a major source of uncertainty.
One of the main areas of concern lies in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free trade agreement between several countries in the Asia-Pacific region. Trump’s return could pose a challenge to agreement. The potential benefits for China and disadvantages for the U.S. can be analyzed in a few key areas:
There are potential benefits for China and its Belt and Road Initiative (BRI):
1. Market access: Joining the CPTPP would give China preferential access to the markets of member countries. This could boost exports and strengthen economic ties, complementing the BRI’s goal of creating a network of trade routes.
2. Influence in regional trade rules: Being part of the CPTPP would allow China to have a say in shaping regional trade rules and standards, potentially aligning them more closely with its interests and the BRI framework.
3. Enhanced credibility: Participation in the CPTPP could enhance China’s credibility as a proponent of free trade and multilateralism, which could benefit its global image and the perception of the BRI.
4. Attracting investment: CPTPP membership might make China and its BRI partner countries more attractive to investors, as the agreement can provide a more stable and predictable trade and investment environment.
At the same time, the potential disadvantages for the U.S. in general and American industry in particular includes:
1. Loss of market influence: Without U.S. participation in the CPTPP (the U.S. withdrew from the original TPP in 2017), American influence over trade rules and standards in the Asia-Pacific region is diminished, potentially disadvantaging U.S. businesses.
2. Competitive disadvantage: Countries within the CPTPP might have lower tariffs and better access to each other’s markets compared to the U.S., putting American products and services at a competitive disadvantage in these markets.
3. Shift in trade patterns: As CPTPP countries deepen their economic ties, there may be a shift in trade patterns that could lead to reduced demand for American exports, impacting industries and employment in the U.S.
4. Geopolitical concerns: The U.S. absence in the CPTPP could lead to a geopolitical shift where China gains more influence in the region, potentially impacting American strategic interests.
Both for China and the U.S., any changes in trade policy or agreements like the CPTPP can have significant domestic repercussions, including impacts on local industries, employment, and political dynamics.
The global economic environment, including factors like supply chain dynamics, technological advancements, and economic policies, can influence the extent of these benefits and disadvantages.
Of course, the actual impact would depend on a range of factors including future policy decisions, the evolving global economic environment, and the specific terms of any agreement.
Many Asian leaders are viewing the U.S. Republican presidential nomination race with concern, particularly regarding the potential impact of Donald Trump’s return to power on their countries. Trump’s possible victory on Super Tuesday could secure his nomination, setting up a rematch with Democratic President Joe Biden in the November election. This scenario has been identified by the world’s leading think tanks as a major source of uncertainty, especially considering the unique situation where only Grover Cleveland has previously made a comeback after a hiatus.
Specifically, countries like India might be significantly affected. Indian Prime Minister Narendra Modi, who has previously agreed with Biden to deepen ties on various issues including military cooperation, would need to start anew in building relations if Trump is elected. Trump’s administration is expected to align with India’s policies in the Indo-Pacific and the Middle East, and might downplay some social issues that have complicated U.S.-India relations in the past.
The impact on the Association of Southeast Asian Nations (ASEAN) could also be profound. Under a Trump presidency, these countries might face increased pressure in geopolitical matters, potentially forcing them to pick sides. Trump’s previous term saw limited engagement with the region, in stark contrast to Biden’s approach, which emphasized ASEAN’s centrality in the Indo-Pacific strategy. This included initiatives like the Indo-Pacific Economic Framework for Prosperity (IPEF), focusing on contemporary trade issues without necessitating tariff cuts.
Meanwhile, China’s influence in the region grows, as evidenced by its leadership in the Regional Comprehensive Economic Partnership (RCEP) and its application for membership in the CPTPP. The U.S.’s fluctuating engagement in regional trade, marked by Trump’s withdrawal from the Trans-Pacific Partnership (TPP) and Biden’s subsequent launch of the IPEF, reflects the ongoing strategic contest in the region.
The IPEF’s swift progress in negotiations, especially in areas not involving tariffs, signifies the U.S.’s attempt to strengthen supply chains and reduce reliance on China. However, Trump’s potential re-election might lead to changes or rejection of such initiatives, as seen by his approach to the TPP. Biden’s trade policy, while similar to Trump’s in skepticism towards free trade, differs in its incorporation of factors like national security and sustainability.
This situation leaves ASEAN countries with a deep-seated mistrust of U.S. commitments, exacerbated by what some perceive as high-handedness in U.S. negotiations. The upcoming U.S. election thus poses significant implications for the region, with either outcome – Trump or Biden – likely to continue as a major disruptive factor in both global and regional dynamics.