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SINGAPORE: It was one of his first proclamations in office: “Trade wars are good and easy to win.”
And since US President Donald Trump took office four years ago, international trade, the lifeblood of Asia, has been under tremendous strain.
It has taken a hard line, particularly with China, by imposing tariffs on the country, as well as sanctions against tech giant Huawei and popular apps TikTok and WeChat.
After the Trump administration blacklisted Huawei last year and banned it from buying vital American components, Wist Plastic and Metal Technology Limited, one of Huawei’s phone parts suppliers, saw a third of its revenue evaporate.
“We have cooperated with Huawei for many years. In the first half of this year, there was some impact on orders. Exports declined, ”said Kin Xiong, general manager of his Shenzhen factory.
The trade war between the United States and China not only hampered Huawei’s immediate expansion plans, but also forced the supplier to turn to the Chinese domestic market to help the business stay afloat.
Just days before the 2020 US presidential election, Asia is anxiously awaiting a big question: What will the outcome mean for the continent?
The Insight program finds out what impact Democratic challenger Joe Biden’s foreign policies can have on Asia if he is elected, or if Trump is re-elected, if that means more storms ahead.
WATCH: 2020 US Elections: Who Are The People In China Backing, Trump Or Biden? (4:00)
THERE ARE NO WINNERS IN THE TRADE WAR
While Trump has “made a big deal out of the US trade deficit,” David Dollar, a senior fellow at the John L Thornton China Center at the Brookings Institution, believes that “the general sense in America now” is that many trade wars have “failed.”
“America’s trade deficit just keeps getting bigger,” Dollar said. “So that hasn’t worked.”
In August, the trade deficit rose to its highest level in 14 years, at $ 67.1 billion ($ 91.7 billion).
Nor has there been a clear winner between the United States and China. In the United States, the trade war has led to higher prices for consumers and financial difficulties for farmers.
In China, it has contributed to a slowdown in the growth of economic and industrial production.
There has also been an absence of the United States from multilateral trade agreements with Asian nations, with the country retreating and becoming increasingly protectionist.
“The region as a whole also suffers from the Trump administration’s fixation on trade deficits and bilateral trade deals,” said Joseph Liow, Dean of the College of Humanities, Arts and Social Sciences at Nanyang Technological University.
For example, the Trans-Pacific Partnership (TPP), which includes countries such as Malaysia, Singapore, and Vietnam, aims to deepen ties between participating nations and help open trade in goods and services.
But by abandoning the free trade agreement shortly after its inauguration in 2017, Trump has distanced the United States from East Asia.
“Most of Asia has become a loser in the trade war because … trade requires stability and predictability,” said Kishore Mahbubani, a distinguished fellow at the Asian Research Institute at the National University of Singapore.
“But with Trump, you can’t know what is going to happen in two weeks … So instability and unpredictability are bad for East Asia.”
Professor Kishore Mahbubani.
CAN BIDEN DO BETTER?
Rather, Biden has vowed to reverse some of Trump’s policies. That includes rejoining the World Health Organization and the Paris Agreement on climate change, and restoring American leadership on the world stage.
“What I would see in the Biden administration is a new engagement with the world (and) some streamlining of our trade war (with) China, in hopes of lowering tariffs,” Dollar said.
Bonnie Glaser, director of the China Power Project at the Center for Strategic and International Studies, believes Asian countries would prefer a US president with “more credibility” and who “takes their interests into account.”
“There is, at least in some Asian capitals, the desire to see (that) the next president is Biden,” he said.
Bonnie Glaser.
If Biden wins, the “short-term gain” for China is that it “will not be so erratic, so impulsive” and it would handle the trade war “more carefully,” Mahbubani said.
“But in the long run, it is bad for China because the Western allies will return to the United States.”
Trump winning re-election, on the other hand, would be “more painful for China” in the short term, but not in the long term.
“A very important Western figure … told me, ‘Kishore, if Donald Trump is re-elected, it is the end of the West; the western alliance would collapse, ‘”the professor said.
“And if it crashes, it’s a gift to China, right? There cannot be a united Western approach to China. “
The People’s Republic of China was proclaimed in 1949. Today, it is in a great power competition with the United States.
However, whether it is a Biden or Trump administration, there will be no change in US policy on viewing China as a strategic rival.
Trump is the “first president to confront China comprehensively,” and Democrats have largely not opposed his “attack on China,” Mahbubani said. “So he has a full bipartisan consensus.”
US attitudes toward China “began to harden even before Trump was elected,” said Dollar, who hopes that “some of the technological measures, security concerns (and) human rights concerns” will remain if Biden wins.
“It is not going to be a warm and fuzzy relationship with China,” he said.
POSSIBLE CONTROVERSY IN THE FUTURE
So far, various opinion polls seem to show that Biden is ahead of Trump. But a presidential candidate can win the popular vote but lose the election.
Donald Trump won the presidency of the United States without winning the popular vote.
The latter happened in 2016, when Hillary Clinton led the poll data and won the popular vote, but Trump became president by the Electoral College.
This is an American system that allocates electoral votes to all 50 states and the District of Columbia. There are 538 electoral votes in total, and a presidential candidate must secure 270 to win the race for the White House.
So despite Biden’s leadership in opinion polls, there is an imminent sense of deja vu.
But there is also a “big difference now,” says Mahbubani. “Trump has made it very clear that he does not believe that he has lost the election. They may not accept the results, and that is something the United States has never faced before, ”he says.
The use of postal ballots, which Trump has attacked, may be the spark of an electoral controversy. And a wave of uncertainty caused by a prolonged showdown can cause chaos and volatility in the markets and beyond.
“There are all kinds of horror scenarios that could play out,” adds Mahbubani. “Are they sending the military to impeach President Trump? What do you do? It’s an amazing scenario … Things could get really, really bad. “
The world may have to prepare for an inconclusive election result, and Asia may have to keep waiting for the answers it seeks.
Check out the full episode of Insight here. The show airs on Thursdays at 9pm.
