The US’ presence in Asia is entrenched but the prospect of a Europe-East Asia economic alliance is one card both regions could play
Could Donald Trump’s “Make America Great Again” policies end up instead making Asia – East Asia especially – greater than ever? Things appear to be moving in that direction as the US president’s alienating trade and tariff policies create an incentive for East Asia and Europe to move into each other’s arms.
Such a marriage, increasingly speculated upon, within the framework of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could create one of the world’s largest, most economically dynamic free-trade areas, offsetting much of the impact of US isolationism.
The prospect of a Europe-Asia economic alliance is one card both regions could play if Trump’s tariff tactics are perceived, particularly in Beijing and Brussels, as becoming too aggressive – although there is a counterargument that the US presence in Asia is so entrenched as to negate such threats.
In the view of Yuqing Xing, an economics professor at Tokyo’s National Graduate Institute for Policy Studies, the “revolutionary changes” brought about by the Trump administration have created a favourable environment for China’s application to join the CPTPP.
There is debate, meanwhile, within the European Union over whether it should also join the trade pact. “It is possible that the CPTPP will serve as a new framework of global trade in the age of globalisation,” Xing said during a recent debate at the Foreign Correspondents’ Club of Japan (FCCJ) in Tokyo.
The CPTPP – which succeeded the US-proposed Trans Pacific Partnership after it collapsed when Trump pulled out of it during his first presidency – comprises Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Britain and Vietnam. South Korea is considering joining.
Trump’s tariff actions in the early days of his second administration have not only traumatised financial markets but had a wide impact on the political and economic spheres. Among other things, these actions, directed at Europe and Asia, appear to have provided an incentive for new thinking on relations between Europe and Asia.
China, as some see it, will increasingly shift from “wolf warrior” mode to panda diplomacy in both East Asia and Europe to take advantage of the vacuum created by the US’ progressive withdrawal. Not only China but also the EU, Japan and South Korea are victims of Trump’s America-first policies and, as such, they may see it as necessary and urgent to cooperate and jointly defend the rule-based international order and the global trading system.
China and others in Asia that serve as key parts of global manufacturing supply chains have powerful cards to play against the United States if the trade wars intensify. American multinational firms are critically reliant on these countries to produce goods that are sold worldwide as US exports, and without their participation the US trade balance – not to mention the US stock market – could suffer severe blows.
There is evidence of a growing detente among the East Asian powers. Japan, China and South Korea agreed on March 30 to advance trilateral economic and trade cooperation to address “emerging challenges”. This was seen as an important step towards the integration of East Asia as it involved the region’s three biggest economies.
Still, this does not necessarily add up to the emergence of a “China-dominant East Asian political economy”, according to professor Kent Calder, director of the Edwin O. Reischauer Centre for East Asian Studies at the Johns Hopkins School of Advanced International Studies in Washington. “I think we have to recognise that there’s a very strong embedded dimension and underlying geopolitical and economic logic to US relations with Asia,” he said at the FCCJ event.
It is true there are what he calls “enduring dimensions” that could strengthen US relations with Asia in the coming years. When it comes to food supply, for example, that China’s population is over four times America’s creates a vulnerability for China and a strength for the US as a major food exporter and innovator in food-related areas. In energy supplies too, recent years have seen the US emerge as a major exporter.
Despite dramatic developments in artificial intelligence (AI), such as the emergence of China’s DeepSeek technology, it is questionable if China has yet an answer to America’s Silicon Valley. Moreover, the seas around the Asian continent have been transformed, supporting the case for the US remaining a powerful player.
The huge rise in commodity and energy trades has also left China vulnerable. A long-time energy exporter, China has shifted to become a major energy importer. It now imports more than 10 million barrels of crude oil a day, mostly from the Middle East.
As Calder notes, a heavy dependence has emerged in the last generation between China and the rest of the world, conspicuously across the Indian Ocean where the US is still geopolitically dominant.
This rising dependence, which has increased with China’s economic growth, can be a force for stability. But it is also a source of vulnerability for a China that is still growing economically and which has become significantly more dependent on the broader world.
What is becoming abundantly and painfully clear as the Trump trade and tariff wars continue and intensify is the anatomy of global trade and investment is far more complex than many people, not least those in the Trump administration, understand and that it is very dangerous – life-threatening, in fact – to take a knife to it in the hope of a quick cure for one nation’s economic ills.
