Start with ASEAN: As pointless as this regional organization has been since its inception in the mid 1970s, one cannot and should not expect anything more than more pointless pontifications and false promises and more self-importance and grandeur. ASEAN, for all that matters, in terms of domestic and regional politics, political-economy and international relations, is as lame as they day it was born. By and large, like it or not, ASEAN adheres to US geopolitical manouverings than it does to China. It claims to be "neutral" but in fact it is not. Just as member states Singapore and the Philippines (and, oh, so-called Communist Vietnam). ASEAN states may have signed up to China's BRICS but that's only because this is to bootlick Emperor Xi Jinping to show ASEAN countenance to US influence whilst milking China investments and easing, so they hope, China's bully-boy antics in the South China Sea. ASEAN is, to put it starkly, weak as piss, even as Malaysia (what can be worse?) takes over the chairmanship.
On Trump's threats of imposing tariffs on its trading partners and their impact: it's still early days. Remember that Joe Biden has unsurprisingly and shamelessly continued with Trump's 2016-2020 populist tariffs, with the same goals in mind. Biden's blocking of Japan's steel merger with US Steel simply amplifies that point after the humiliating loss by the Kamala Harris/Joe Biden Democrats to Trump Republicans in the last election and the dominance of Congress by Trump Republicans. This may just bolster Trump to imposing more punitive tariffs on its competitors in Asia but this will be a case, in my view, another dumb Trump adventurism in global trade matters.
If Trump is for "free market" competition and trade liberalization, he would find ways (that Biden and Harris did not) to ensure the foundations for this competition on US soil were rife for US firms to be more efficient and therefore more competitive. They haven't and they're not, mostly because their production costs have been rising and this, inter alia, has been fueling US inflation. In many of his columns, Nobel economics prize winner Paul Krugman seriously tried to present a benign US inflation story when most US consumers were loudly complaining about [still] rising price inflation. This brings into question -- yet again -- how statisticians calculate their inflation rates.
Trump's tariffs, by any measure, won't reduce US inflation any more than they will improve US competitiveness when input prices are still climbing northward. If his 2016-2020 term proved anything at all, Trump will likely unleash a bad spell for the US economy, which might see US economy slow and US jobless rate rise. This won't mean the US Fed will cut its interest rate, when price inflation remains high. If US interest rate stays at its current rate, that's enough for business not to borrow to invest in their operations. There's another problem here: the strength of the US dollar, which continues to hammer US export competitiveness but imports cheaper, which simply delights US consumers. Most of these cheap imports are made in state-imposed sanctions to keep their labor markets cheap in wages to keep driving their exports. But at some point, probably halfway through Trump's second term, US demand for cheap Asian exports will see that worm turn in on itself; meaning Asia faces a potential region-wide downturn.
The likes of China might do more of a Japan of the 198s and shift more of its costlier production offshore. But as Japan found out, it didn't help Japanese producers and households much. Japan's economy is still lumbering along the bottom and its high-cost industries might well face hollowing out in the way the US faced in the 198os and 1990s. Frankly put, the US has lost its competitiveness mojo long ago, as has Japan, and now the same prospects face Chinese industries too. The picture is much more complicated that the space here allows for a broader enunciation of the problems China is facing, of course. But tariffs will only worsen the US economy and, and interdependent as the world economy has become -- even before so-called neoliberal globalization -- so will Asia's economies.
In fact, I'll hazard a guess here that those US firms operating in China and elsewhere in Asia won't return to US soil to remake US manufacturing and make America great again. They'll like stay put and to some extent watch what and how Chinese firms rejig their operations and move offshore before they, too do likewise. But don't get your hopes up if you think these nw or greater investment flows will see Asian economies grow. They will, in the short to medium term, but not in the long run. Costs will run up in domestic economies, inflation will rise, prompting interest rate increases, especially if real wages rise (if -- if -- productivity also increases).
So far all the data only points to FDI inflows and not because of any real economic reforms in Asian countries, such as those promised by Malaysia whose prime minister Anwar Ibrahim has, typically, balked. A lot of the economic calculations that have always been made in Asia (as in the US) strongly factor in domestic politics, just as it's doing in China, when Xi's subsidies and reforms have not shown any real results (nor would I be inclined to believe China's statistics).
How the China maneuverings will fare will depend also on the strength of the US dollar. But as Philip Bowring notes, one, it won't be easy to engineer this and, two, it'll come at a great cost to (a) US firms in the US and (b) all foreign firms operating outside the US including Asian firms since their trade (imports and exports) will still be denominated in the US dollars. And forget the silly, insane, naive idea of de-dollarization, because BRICs is nothing more than another ASEAN -- uselessly designed to propagate a false Asian nationalism in the same way as the falseness of the ideological Asian values that proved the latter to be just a political sham. So will Trump's tariffs.
Start with ASEAN: As pointless as this regional organization has been since its inception in the mid 1970s, one cannot and should not expect anything more than more pointless pontifications and false promises and more self-importance and grandeur. ASEAN, for all that matters, in terms of domestic and regional politics, political-economy and international relations, is as lame as they day it was born. By and large, like it or not, ASEAN adheres to US geopolitical manouverings than it does to China. It claims to be "neutral" but in fact it is not. Just as member states Singapore and the Philippines (and, oh, so-called Communist Vietnam). ASEAN states may have signed up to China's BRICS but that's only because this is to bootlick Emperor Xi Jinping to show ASEAN countenance to US influence whilst milking China investments and easing, so they hope, China's bully-boy antics in the South China Sea. ASEAN is, to put it starkly, weak as piss, even as Malaysia (what can be worse?) takes over the chairmanship.
On Trump's threats of imposing tariffs on its trading partners and their impact: it's still early days. Remember that Joe Biden has unsurprisingly and shamelessly continued with Trump's 2016-2020 populist tariffs, with the same goals in mind. Biden's blocking of Japan's steel merger with US Steel simply amplifies that point after the humiliating loss by the Kamala Harris/Joe Biden Democrats to Trump Republicans in the last election and the dominance of Congress by Trump Republicans. This may just bolster Trump to imposing more punitive tariffs on its competitors in Asia but this will be a case, in my view, another dumb Trump adventurism in global trade matters.
If Trump is for "free market" competition and trade liberalization, he would find ways (that Biden and Harris did not) to ensure the foundations for this competition on US soil were rife for US firms to be more efficient and therefore more competitive. They haven't and they're not, mostly because their production costs have been rising and this, inter alia, has been fueling US inflation. In many of his columns, Nobel economics prize winner Paul Krugman seriously tried to present a benign US inflation story when most US consumers were loudly complaining about [still] rising price inflation. This brings into question -- yet again -- how statisticians calculate their inflation rates.
Trump's tariffs, by any measure, won't reduce US inflation any more than they will improve US competitiveness when input prices are still climbing northward. If his 2016-2020 term proved anything at all, Trump will likely unleash a bad spell for the US economy, which might see US economy slow and US jobless rate rise. This won't mean the US Fed will cut its interest rate, when price inflation remains high. If US interest rate stays at its current rate, that's enough for business not to borrow to invest in their operations. There's another problem here: the strength of the US dollar, which continues to hammer US export competitiveness but imports cheaper, which simply delights US consumers. Most of these cheap imports are made in state-imposed sanctions to keep their labor markets cheap in wages to keep driving their exports. But at some point, probably halfway through Trump's second term, US demand for cheap Asian exports will see that worm turn in on itself; meaning Asia faces a potential region-wide downturn.
The likes of China might do more of a Japan of the 198s and shift more of its costlier production offshore. But as Japan found out, it didn't help Japanese producers and households much. Japan's economy is still lumbering along the bottom and its high-cost industries might well face hollowing out in the way the US faced in the 198os and 1990s. Frankly put, the US has lost its competitiveness mojo long ago, as has Japan, and now the same prospects face Chinese industries too. The picture is much more complicated that the space here allows for a broader enunciation of the problems China is facing, of course. But tariffs will only worsen the US economy and, and interdependent as the world economy has become -- even before so-called neoliberal globalization -- so will Asia's economies.
In fact, I'll hazard a guess here that those US firms operating in China and elsewhere in Asia won't return to US soil to remake US manufacturing and make America great again. They'll like stay put and to some extent watch what and how Chinese firms rejig their operations and move offshore before they, too do likewise. But don't get your hopes up if you think these nw or greater investment flows will see Asian economies grow. They will, in the short to medium term, but not in the long run. Costs will run up in domestic economies, inflation will rise, prompting interest rate increases, especially if real wages rise (if -- if -- productivity also increases).
So far all the data only points to FDI inflows and not because of any real economic reforms in Asian countries, such as those promised by Malaysia whose prime minister Anwar Ibrahim has, typically, balked. A lot of the economic calculations that have always been made in Asia (as in the US) strongly factor in domestic politics, just as it's doing in China, when Xi's subsidies and reforms have not shown any real results (nor would I be inclined to believe China's statistics).
How the China maneuverings will fare will depend also on the strength of the US dollar. But as Philip Bowring notes, one, it won't be easy to engineer this and, two, it'll come at a great cost to (a) US firms in the US and (b) all foreign firms operating outside the US including Asian firms since their trade (imports and exports) will still be denominated in the US dollars. And forget the silly, insane, naive idea of de-dollarization, because BRICs is nothing more than another ASEAN -- uselessly designed to propagate a false Asian nationalism in the same way as the falseness of the ideological Asian values that proved the latter to be just a political sham. So will Trump's tariffs.