Trump Embarks on Asia Tour Amid Trade Tensions and Potential for Historic Deals

Strategic Insights -

Donald Trump will begin a tour of Asia on Sunday at a meeting of south-east Asian nations in Malaysia, before flying to Japan to meet its new prime minister, Sanae Takaichi, and eventually travel to South Korea for the Apec summit, where he is expected to discuss trade and possibly Taiwan with Chinese leader Xi Jinping. The trip comes at a critical time for trade relations between the US and Asian nations, with the US being the region's largest export destination and relying heavily on Asean economies to keep its manufacturing supply chain moving.

Key Takeaways:

  • Trump is expected to meet Xi Jinping at the Apec summit in South Korea, where they will discuss trade and possibly Taiwan, amid growing speculation over the potential for a historic deal to lower trade tensions between the two nations.
  • Trump's attendance at the Association of Southeast Asian Nations (Asean) summit in Kuala Lumpur comes at a critical time for the regional bloc, whose 10 members together exported goods worth $312bn to the US last year, compared with $142bn in 2017.
  • The US president is expected to discuss Taiwan with Xi, amid concern that Trump could waver on Washington's support for the democratic, self-governing island under pressure from Xi.
  • Trump's stop-off in Malaysia could be motivated less by trade and more by a desire to position himself at the centre of any deal to end the dispute over un-demarcated points along Thailand and Cambodia's 817km (508-mile) land border.
  • The US president was upbeat ahead of his meeting with Xi, telling reporters that "I think we're going to end up having a fantastic deal with China ... it's going to be fantastic for the entire world".
  • A failure to lower trade tensions could further damage US industries that are already dealing with the fallout from Trump's tariffs on Chinese exports to the US.
  • Trump's three previous attempts to persuade Kim Jong-un to rein in North Korea's nuclear ambitions ended in failure, and now does not feel like the right time for Trump to take another gamble on Kim.
  • The South Korean public is unlikely to forget last month's immigration raid by US ICE agents at a South Korean-owned electric battery plant under construction in Georgia, but the country's president, Lee Jae Myung, has more pressing issues to take up with Trump in Gyeongju.
  • South Korean trade officials say they have made progress on trade in recent weeks but concede that "one or two" issues remain unresolved.

Statistics:

  • $312bn: The total value of goods exported from Asean nations to the US last year, compared with $142bn in 2017.
  • 817km (508-mile): The length of the un-demarcated land border between Thailand and Cambodia.
  • 10% - 40%: The range of "reciprocal" tariffs imposed by Trump on South-east Asian countries.
  • 25% - 15%: The change in tariffs on South Korean autos from 25% to 15% as part of the deal to invest $350bn in the US economy.
  • $350bn: The total investment the US is expected to receive from South Korea as part of the deal.
  • 25%: The initial tariff rate on South Korean autos before the deal was agreed.
  • 40%: The highest rate of reciprocal tariffs imposed by Trump on South-east Asian countries.

Sources:

  • White House press secretary Karoline Leavitt's statement on Trump's meeting with Xi Jinping.
  • Asean leaders' statement on Trump's protectionism and the risks it poses to the multilateral trading system.
  • Interview with Malaysia's foreign minister, Mohamad Hasan, on Trump's meeting with Asean leaders.
  • CNN's report on US officials discussing a meeting with Kim Jong-un during Trump's visit to Asia.
  • The US president's statement on meeting his North Korean counterpart "in the appropriate future".
  • The North Korean regime's statement on the successful test of a new "hypersonic system" aimed at strengthening its nuclear deterrent.