Trump flies out and China flies in with a trade deal
Beijing’s pact with ASEAN highlights the fallout from the tariff wars being waged across the world
US President Donald Trump jetted out of Kuala Lumpur on Monday. Twenty-four hours later, China moved in by pitching an alternative approach to United States “protectionism.” It came in the shape of an expanded ASEAN free trade deal, signed and sealed in Malaysia.
Beijing’s pact with the 11 members of the Association of Southeast Asian Nations tended to dwarf Trump’s meager economic concessions to Cambodia, Malaysia, Thailand, and Vietnam over the weekend. It was signed off as he was heading to Tokyo.
Like the rest of ASEAN, those states have been hit by sky-high tariffs in a global trade war that has dragged on since Trump returned to the White House for a second term in January. Ironically, China has moved to position itself as the voice of reason.
“Interference by external forces in our region is rising, and many countries are being unreasonably subjected to high tariffs,” Chinese Premier Li Qiang stressed, highlighting Trump’s sanction strategy and protectionism policies.
“Faced with strong political and economic bullying, disunity and confrontation will not only bring no benefits, but will lead to division and rule by external forces. By relying on each other and coordinating our actions, we can safeguard our legitimate rights and interests,” he said.
The talks suggest Beijing may have gotten the better end of the bargain.
Rush Doshi, Council on Foreign Relations
Behind the news:
- Li and Malaysian Prime Minister Anwar Ibrahim, who is serving as the bloc’s chairperson this year, signed off on the ASEAN-China Free Trade Area 3.0 agreement.
- It came on the final day of the group’s annual summit in Kuala Lumpur. Two-way trade surged to US$1 trillion last year. ASEAN and China are each other’s top trading partners.
Delve deeper: Southeast Asia has become collateral damage in the punishing rounds of tariffs rolled out by the Trump administration. Economic coercion has also jeopardized Washington’s role as a trusted ally in the region.
Between the lines: “Beyond its own internal conflicts, ASEAN has no coherent approach as it is caught in the middle of international tensions,” Joshua Kurlantzick, of the Council on Foreign Relations think tank, pointed out in a commentary for The Conversation.
Big picture: Next up for China and the United States is the long-anticipated tête-à-tête between Trump and China’s President Xi Jinping. They are expected to meet on the sidelines of the Asia Pacific Economic Cooperation, or APEC, summit in South Korea later this week.
Bottom line: “The current talks in Malaysia, however, suggest Beijing may have gotten the better end of the bargain while our efforts with allies and partners continue to struggle,” Rush Doshi, of the Council on Foreign Relations, tweeted on X, formerly known as Twitter.
China Factor comment. Indeed, fears are growing that this might be another TACO, or “Trump Always Chickens Out,” moment. In the past, he has talked tough and then caved in. Will it be any different this time? Or will Xi leave with egg on his face?