No part of the world will be hit harder by President Trump’s barrage of “reciprocal” tariffs than the Asia-Pacific region.
Despite his 90-day pause in imposing them, some of Mr. Trump’s steepest tariff rates still hang over developing economies such as Vietnam, Thailand, Indonesia, Bangladesh and Sri Lanka that are highly dependent on trade. He has also threatened lower but still substantial penalties on wealthy trading partners — Japan, South Korea and Australia — that are important U.S. geopolitical allies in the region, as well as Taiwan.
Mr. Trump thinks this will lower American trade deficits and bring manufacturing back to the United States. That remains to be seen.
But his misguided, incompetent attack on global trade threatens to irreparably harm U.S. influence across the world’s most commercially dynamic region, leaving a vacuum for China to fill. In the long run, Mr. Trump’s actions raise the possibility of the United States ceding its dominant position in Asia-Pacific security. Why, after all, would an increasingly inward-looking America defend a region where it has a reduced economic stake?
The U.S. leadership in Asia that Mr. Trump is gambling with was patiently built up over generations. After World War II, diplomats like George Kennan developed a strategy for prevailing over the Soviet Union by knitting together the most prosperous regions of the world — the United States, Europe and Japan — into one political and economic bloc. That resulting rules-based economic system later expanded to export-focused economies across Asia.
Security alliances accompanied this — NATO in Europe, defense treaties with Japan, South Korea and others in the Asia-Pacific. This brought American allies under the U.S. military umbrella and protected the broader liberal economic order. Free trade and capital flows flourished. U.S. multinationals profited from supply chains rooted in Asia, American consumers enjoyed cheaper products and Asian countries developed rapidly and integrated with the U.S.-led system. Decades of American economic and geopolitical pre-eminence in the Asia-Pacific followed.
In truth, U.S. dominance was waning even before the Trump era as China’s economic power grew. Mr. Trump helped accelerate this trend during his first term by withdrawing from the Trans-Pacific Partnership, a Pacific Rim trade agreement that would have strengthened American influence and served as a counterpoint to China. Instead, China became the largest trading partner for almost every Asian nation and the region’s predominant economic force. It remains so today.
Yet even during Mr. Trump’s first term, and under President Biden, it was still possible to say Washington supported open trade, partly as a bulwark against Chinese power. Mr. Trump’s indiscriminate tariffs amount to an attack on this system, severely damaging trust in the United States as a trading partner and creating havoc for American manufacturers seeking to relocate their production from China to other Asian countries.
Vietnam is a prime example of the mutual benefits of the U.S. system — and the shortsightedness of Mr. Trump’s measures. Hanoi’s openness to trade fueled the country’s rapid economic growth over the last decade and helped turn a former foe of the United States into a strategically important economic partner situated on China’s doorstep. Today, around one-third of Vietnamese exports go to the United States.
If Vietnam were hit with anything close to the 46 percent tariffs Mr. Trump originally threatened to impose, the country could face economic ruin. It’s not alone. Sri Lanka, recovering from a deep economic crisis, may face tariffs of up to 44 percent if the United States follows through; for Bangladesh, struggling to get on its feet after a democratic revolution, 37 percent. Potential tariffs of 32 percent loom for Taiwan — a vital player in America’s geopolitical contest with China — and Indonesia, the region’s third most populous nation, after China and India.
Tough choices lie ahead for these countries.
Some will have to cave to U.S. demands in ways that may undermine their vulnerable economies. Vietnam’s leader, To Lam, already has offered to drop his country’s tariffs on American goods to zero.
But Mr. Trump’s capricious nature may ultimately force countries to consider alternatives to trading with the United States. China, with its huge economy and resource needs, is an obvious choice. With Mr. Trump assessing even larger tariffs on Chinese goods, Beijing, too, will be more open to finding other outlets for trade. This will almost certainly increase China’s already considerable sway over the region and aid its efforts to build a new model of globalization that serves Chinese, rather than Western, interests. Those efforts continue: China held joint talks in late March with South Korea and Japan on a possible three-way free trade agreement, and President Xi Jinping last week toured Vietnam, Malaysia and Cambodia to boost economic ties.
All of this raises questions about U.S. security commitments in Asia. Mr. Trump’s “America First” doctrine opposes costly overseas security arrangements — just ask the Ukrainians — and the American public shows waning interest in foreign entanglements. If Mr. Trump’s trade war weakens U.S. economic engagement with Asia, such sentiment may intensify.
The implications of a less robust American security presence would be far-reaching. China could increase its political and military domination of the region. U.S. allies like Japan and South Korea may, in turn, feel they need to develop nuclear weapons to ensure their security (debates have begun on the issue in both countries). The perception of American unreliability may lead them — and other countries like Vietnam — to reach some kind of security accommodation with Beijing rather than resist.
Those scenarios seem far-off for now. Some members of Mr. Trump’s team still favor sticking to or expanding U.S. security commitments in Asia, even while reducing them in Europe. Defense Secretary Pete Hegseth traveled to Japan and the Philippines in late March to reassure nervous allies of this.
Mr. Trump may eventually drop his tariffs, or the Democratic Party could return to power in four years and try to rebuild relations. But America is unlikely to fully regain the trust it once enjoyed and which made it the Asia-Pacific region’s undisputed commercial and military power.
James Crabtree is a geopolitical analyst based in London. He is the author of “The Billionaire Raj: A Journey Through India’s New Gilded Age.”
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