United Asean no match for
Trump’s tariffs, says ex-US
trade negotiator
Stephen Olson says US president Donald Trump will ‘do what he wants’ whether or not Asean puts up a unified front in the face of sweeping tariffs.
Stephen Olson noted that Asean has benefited from a recent influx of Chinese production companies looking to circumvent US tariffs. It must now take steps to avoid ending up as “collateral damage” in the US-China trade war, he told FMT.
China, Mexico and Canada were the first to be hit by the increased tariffs under Trump’s “America First” trade policy. However, Mexico and Canada were granted a temporary 30-day reprieve last week.
Similar tariffs on goods from the European Union are also in the works.
Olson, a member of the US negotiating team for the US-Canada Free Trade Agreement and the North American Free Trade Agreement, noted that Malaysia, Indonesia and Vietnam have seen their trade surpluses with the US bolstered by exports from Chinese production facilities that have relocated to their shores.
The international trade consultant said Trump views these surpluses as a sign that the US is “losing” in trade, adding that tariffs against high trade surplus countries could be on the cards.
“These countries would be wise to reduce any dependency on the US where possible and batten down the hatches,” Olson, a visiting senior fellow at the ISEAS–Yusof Ishak Institute in Singapore, warned.
Asked whether a common position among Asean member countries could ward off the tariffs, Olson said: “Trump will do what he wants irrespective of whether Asean is unified.”
He said Malaysia, as the Asean chair, should engage in private diplomacy with US officials to remind them how the US stands to benefit from its trade and investment ties with the region.
Asean should also provide the US with “real or symbolic gestures” to address Trump’s trade concerns, he added.
“That is probably the best bet,” said Olson, who has developed and delivered training programmes for Asean government officials on trade negotiation strategies and trade policy development.
Asean countries must avoid being played against each other
On the other hand, Arividya Arimuthu — Malaysia’s chief negotiator for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership from 2020 to 2023 — expressed a more favourable perspective on the subject.
She said that as the Asean chair, Malaysia should focus on building consensus among member countries and consolidating the region’s position in response to Trump’s tariff measures.
Arividya stressed that a divided Asean would weaken its bargaining power, enabling the US to negotiate separate deals that benefit some Asean member states over others.
She also noted that a united regional bloc would reinforce Asean influence in the global trade ecosystem and boost investor confidence.
“Asean needs to present a unified stance to avoid (member countries) being played against each other,” said Arividya, a senior fellow at the Institute for Strategic and International Studies.
“Asean is better off engaging the US collectively rather than through bilateral pathways as this will give the region better economic clout to secure fairer trade terms.”
Arividya said that while Trump’s tariffs on Canada and Mexico may not have an adverse impact on the Asean economy, tariffs on China are likely to disrupt regional supply chains within Asean, hitting manufacturing sectors such as electrical and electronics.
Although some Asean countries may benefit from companies relocating out of China, she said it is likely that the gains will not be evenly spread across all Asean member states.
“If Trump expands tariffs to Asean countries, then our exports to the US will also be at risk due to the additional cost of doing business,” she added.
No comments:
Post a Comment