Trump trade hit list

Xi Jinping meets Trump this weekend to talk, among other things, trade. But even though China has been at the forefront of Trump’s Twitter rampages on trade deficits, it’s not just the world’s second largest economy that is under fire by this US Administration.

Last Friday the US President issued an executive order to investigate the trade imbalance between the US and 16 other countries. In addition to China, these include Japan, Germany, Mexico, Ireland, Vietnam, Italy, South Korea, Malaysia, India, Thailand, France, Switzerland and Indonesia, with eight out of 15 of them being in the Asia-Pacific.

Responses by the relevant governments in Asia have ranged from relatively unfazed to worried, to engaging in reciprocal warnings.

The Chinese Ministry of Commerce, published a statement saying “China is willing to cooperate with the United States on a basis of equality and mutual benefit” (Straits Times).

The Indian Secretary General of The Federation of Indian Chambers of Commerce and Industry (FICCI), suggested that India and the US should trade more in energy, generic pharmaceuticals and defence to bring down trade deficit and that the US must be more open to movement of professional services (The Hindu).

Meanwhile in the ASEAN nations, Indonesian Coordinating Economic Minister Darmin Nasution said that the country had nothing to worry about regarding the order because it exported commodities and manufactured goods to the US that did not compete with those produced in that country (The Jakarta Post).

Thai Commerce Minister Apiradi Tantraporn said that trade problems could be “thrashed out” in ongoing negotiations on a trade and investment partnership known as the Trade and Investment Framework Agreement, whilst the President of the Thai National Shippers Council worried that the labelling of Thailand as a ‘trade cheats’ could tarnish the eyes of Thai product consumers (Bangkok Post).

Malaysian International Trade and Industry Minister Ong Ka Chuan said that his country was neither responsible for nor taking advantage of the US trade deficit, whilst meanwhile acknowledging that there is a large presence of American manufacturers in Malaysia and they would be affected should the administration punish Malaysia for its low production costs (The Star).

Should there be more substantial US orders post-investigation on those countries involved, the US does need to be careful of retaliations. In those countries investigated, Canada, China, Japan, Germany, South Korea and India all rank in the top 15 countries for US exports. ‘Cutting off your nose to spite your face’ comes to mind.