DUNCAN MCDONNELL, STEPHEN MCCARTHY, LEONG LIEW, DIEGO FOSSATI, HUI FENG, YI WANG, KAI HE, HUIYUN FENG, DAVID SCHAK, ANDREW O’NEIL, MICHAEL HEAZLE, IAN HALL AND YAN ISLAM |
Our Griffith Asia Institute research scholars weigh in on what Donald Trump’s successful bid for US Presidency might mean for the Asia Pacific Region – but first a note about the impact of Populists in power around the globe.
Trump’s victory and the Populist movement ~ by Duncan McDonnell
Donald Trump’s victory is the most spectacular success to date for right-wing populism. Pundits had expected Austria to become the first Western democracy to directly elect a radical right-wing populist, Norbert Hofer, as President when it re-runs its election in December. The United States has beaten them to that dubious honour.
In parliamentary democracies, we have already seen right-wing populists take power over the past 10 years: from the governments led by Silvio Berlusconi in Italy to Viktor Orbán in Hungary and to Narenda Modi in India. Like Trump, these populists claim they are taking democracy back for the people from the hands of rapacious elites and a series of dangerous ‘others’.
As with Berlusconi in Italy, we can expect Trump to blame ‘the establishment’ for his inevitable failure to deliver on the wild campaign promises. ‘Unelected judges’, ‘vested interests’, ‘international banks’, ‘the liberal media’ and even his own party in Congress are likely to be trotted out as the enemies of the people who will not let the populist saviour perform his mission.
Trump’s impact on Southeast Asia ~ by Stephen McCarthy and Leong Liew
Trump’s impact on Southeast Asia depends on whether his isolationist political rhetoric translates into public/foreign policy and his appointment of key advisers and senior staffers in Washington. A reversal of Obama’s ‘Pivot to Asia’ could naturally force many countries to follow the Philippine’s recent example of warming relations with China. Fellow populist president Rodrigo Duterte was not the only regional strongman who welcomed the change—Prime Minister Hun Sen of Cambodia endorsed Trump before the election while opposition leader in exile Sam Rainsy saw no distinction between the two. Trump’s likely reliance less on the State Department and more on Defense and business leaders for advice will be welcomed by regional leaders criticized for human rights violations and other democratic deficits under the previous administration. If the Trans-Pacific Partnership treaty is killed at the same time that ASEAN’s Regional Comprehensive Economic Partnership (including China and not the US) nears completion, the US may need to reach new trade deals in Southeast Asia or be muscled out of the region. The key regional security issue will remain the competing territorial claims to the South China Sea, and while a Clinton administration had signaled a more forceful response to China’s aggression, the ‘deal-maker’ President Trump could either follow Duterte’s example or sit back and let them fight it out amongst themselves.
On the reception of a Trump presidency in specific ASEAN countries, Singapore of all the ASEAN countries is most apprehensive of the incoming Trump presidency. Although the richest (in per capita terms) it is the smallest and most dependent on foreign trade. Foreign policymakers on the island regard the continuous engagement of the United States in SEA as essential for Singapore’s security. Singapore does not have any territorial dispute with China. Its main security concerns are with Islamic-inspired terrorism and being surrounded by two nations with large Muslim populations. Chinese comprise 74% of the country’s 5.5 million population and they dominate government, military and business. But PAP, Singapore’s ruling party, being sensitive to the history and domestic politics of the country’s closest neighbors assiduously avoids being identified as a Chinese nation. As an indication, only two of the seven country’s past and current foreign ministers since it was forced to leave the Federation of Malaysia in 1965 are ethnic Chinese; the other five are ethnic Indians. Turning to China for security guarantees is not an option for Singapore.
Malaysia unlike Singapore has a territorial dispute with China, but the dispute is of a lower order compared to China’s disputes with Philippines and Vietnam. Trump’s trade protectionism will hurt Malaysia, but Clinton is not popular in Malaysia. Najib Razak, Malaysia’s PM, attributes Trump’s victory to Americans’ protest against their country’s interventions abroad and a vote for a more isolationist foreign policy. Najib will certainly hope that the US Department of Justice under President Trump would not be too zealous in its probe of the billions missing from Malaysia’s sovereign wealth fund, 1MDB. Trump is a businessman and Malaysia’s political elites have ample experience dealing with business elites cum politicians. They might on balance not view a Trump presidency that unfavorably.
Trump’s effect on US-Indonesia relations ~ by Diego Fossati
During his campaign, President-Elect Donald Trump articulated two policies that may affect US-Indonesia relations. The first is the idea of subjecting to “extreme vetting” Muslims entering the US, and possibly of suspending immigration from “terror-prone regions”. The second is a call for increased economic protectionism. Indonesia is a predominantly Muslim country where conservative Islam is on the rise and an open economy where trade with the US accounts for 9.5% of exported goods. In this respect, the election is potentially disruptive for US-Indonesian relations. However, the extent to which the new president will implement the policies he promised is unclear. Political science research suggests that when ideologically extreme candidates and parties take office, they become more pragmatic. Furthermore, while Trump has taken radical positions in some policy areas, his views are more moderate in others. He has repeatedly vaunted his track record as a “deal-maker”, and his victory speech emphasized the need to “seek common ground” and build partnerships with other nations. If the President-Elect keeps faith in this commitment, US-Indonesia relations will be characterised more by continuity than change.
Trump and China’s economy ~ by Hui Feng
While it is still not clear how much the campaign rhetoric will be turned into policy, one thing is clear – we will have to fasten the seat belt in terms of US-China economic relations. Trump’s threat to scrap the Trans Pacific Partnership is certainly good news for China which has been excluded from the show, but Washington will be less likely to cooperate with Beijing on the latter’s initiative of an Asia Pacific Free Trade Zone. Instead, there may be a potential trade war and currency war between the two countries, which will have negative impact on the Chinese economy. China’s terms of trade with the US could be damaged if the Trump Administration seeks to impose punishing tariffs on Chinese exports that has been accused of ‘stealing American jobs’. This will put downward pressure on China’s current and capital accounts and its export performance, a traditional engine of Chinese economy. China will also be facing renewed pressure from Washington on the yuan’s valuation and bear the brunt of being labelled a ‘currency manipulator’ and suffer from the associated retaliatory measures from the US. This will significantly constrain China’s policy options in dealing with a slowed-down economy.
US-China relations during the Trump presidency ~ by Yi Wang
I think the shape of US-China relations during the Trump presidency will depend more on Beijing than on Washington. The lack of certainty and predictability of Trump’s foreign policy, while challenging to many, may prove to be a windfall for China’s quest for a “new type of major power relations” if Beijing’s diplomats can seize the initiative and play their cards wisely. As “Trump the boss” now becomes “Trump the apprentice” in learning the ropes of international diplomacy, his Chinese counterparts can play an instrumental role in shaping his learning curve, especially in working out the details of a new bilateral relationship. Instead of waiting for Trump to make up his mind on what to do with China, Beijing is better off adopting a proactive, though subtle, approach to reaching out to Washington. The wisdom and diplomatic skills of both sides will be put to the test, but Xi’s team can bring more experience than Trump’s team to the negotiation table, from which much of Sino-US relations will flow in the next four to eight years.
However, the windfall, if it happens at all, may not all be in China’s favour. Another flow-on effect of the Trump presidency might be felt in China’s relations with Russia. If Trump can turn his goodwill with Putin into a thawing of US-Russian relations, it has the potential to drive a wedge in Sino-Russian relations, given the traditional suspicions and unease between the two giant neighbours. If that ever came to pass, the currently red-hot Sino-Russian friendship would start to cool down and Washington might again find itself in an enviable position vis-a-vis Beijing and Moscow, reminiscent of the strategic game Nixon and Kissinger tried to play in the early 1970s.
Trump and China’s foreign policy ~ by Kai He and Huiyun Feng
Trump’s electoral victory might not be good for China’s foreign policy. Trump advocated an offshore balancing strategy to retreat from the Asia Pacific. It may sound nice for China because China can fill the “strategic vacuum” left by the United States. However, the reality is that there is no such a vacuum even if the United States indeed withdraws from the Pacific. Other regional powers, such as Japan, South Korea, India, and Australia, will look for closer security ties, even forming new alliances, to deal with China. The existing US-led “hub-and-spokes” system is by no means perfect for China. However, the strategic uncertainties as a result of US retreat will be worse for China’s strategic environment. Japan and South Korea, even Australia might consider developing nuclear weapons to pursue power equilibrium with a rising China and an ever more dangerous North Korea. The territorial disputes in the East China Sea and the South China Sea may easily trigger military conflicts among nations and arms races seem inevitable.
Trump and Taiwan ~ by David Schak
The election of Donald Trump will probably be positive for Taiwan. Although some KMT figures have played politics, stating that they fear Trump will use Taiwan as a bargaining chip with the PRC or will abandon it as the US becomes more isolationist, this is highly unlikely. Trump has strongly criticized China as a currency manipulator and for ‘stealing’ American jobs. Figures closely associated with Trump such as Randy Forbes, Steve Yates, Heritage Foundation Head, Ed Feulner and Peter Navarro are very supportive of Taiwan. Moreover, Navarro is especially critical of Presidents Nixon, Carter, Clinton, Bush II and Obama for being overly solicitous toward the PRC at the expense of a Taiwan that has made a successful transition to liberal democracy. While an upgrade in diplomatic status is unlikely, increased weapon sales are not. The one possible downside is that, except for information technology suppliers, whose products are protected under the WTO, Taiwanese businesses operating in China would share the pain of a downturn in trade with the PRC.
Trump’s relationship with North Korea ~ by Andrew O’Neil
For perhaps the first time in history, elites in Pyongyang have reason to claim that US politics has produced an idiosyncratic outcome that makes North Korea’s system look predictable by comparison. It’s hard to know what Kim Jong-un will make of Donald Trump, but one thing is for certain: North Korea will look to test the inexperienced new President in early 2017. This could come in the form of a nuclear test, a manufactured crisis with Seoul – presently dealing with its own domestic crisis over the legitimacy of its president – or a long-range missile test that provides further evidence of North Korea’s capacity to strike the continental United States. The big question will be how Trump and his senior foreign and defense policy strategists respond to North Korea when they will be confronting many tests on a range of other fronts. Deterring and containing North Korean aggression requires a calibrated strategy of toughness, consistency, and restraint. The jury remains out on whether the first Trump administration will have these qualities in equal measure.
What Trump’s presidency will mean for US-Japan relations ~ by Michael Heazle
Many Japanese, given Trump’s provocative campaign comments, are very concerned about what a Trump presidency will mean for US-Japan relations and the alliance in particular. Prime Minister Abe, also reportedly very concerned, is looking to build confidence early, calling Trump last Thursday and meeting this week with Trump to discuss the president-elect’s plans for the alliance and the TPP. On the TPP, Abe is likely to be disappointed, but on the alliance and the US commitment to East Asia, the news will be more positive.
The early signs are that President Trump will be a different proposition to candidate Trump, on US foreign relations at least. Expect to see Trump follow through on requiring greater burden sharing from US allies (including Australia). But this would have been the case under Clinton anyway, and is, in any case, something Japan is now much better positioned and willing to do than in the past. On this, Abe will likely push for “in kind” rather than further cash contributions. The most likely outcome: a recalibrated US grand strategy employing a much purer form of US offshore balancing in Asia, and elsewhere. This does not, however, mean a US drawdown in the region. Expect also to see, as a big part of this, greater pressure from Washington for further alliance cross-bracing among US allies, in particular between Australia and Japan.
Trump and the likelihood of a US-India strategic partnership ~ by Ian Hall
For Indians already sceptical about America, Trump’s win will likely confirm the impression that is not the stable and reliable player that enthusiasts for the US-India strategic partnership would like it to be. The nativist anger that Trump’s campaign has stirred up will also cause considerable anxiety about the safety of the more than 2m Indian-born people living in the US. And Trump’s anti-immigrant and anti-globalisation rhetoric will cause further concern, threatening as it does the livelihoods of highly-skilled Indian workers in both the US and India.
Over the next year or so, we can expect to see Narendra Modi’s government move to deepen its political, economic and especially security ties to other important Asian states – especially Japan, but probably also Singapore, Vietnam, and perhaps Indonesia – to try to provide some stability in the region. Australia, if it chooses to play a more active and independent role, could also be an important partner in this effort.
Trump as President: economic implications for India1 ~ by Iyanatul Islam
When Donald Trump secured a stunning victory in the US Presidential elections, Prime Minister Modi of India promptly ‘tweeted’ him congratulations and hoped that India-US relations would scale new heights.2 Trump himself has spoken warmly about India, most notably at an event hosted by the Republican Hindu Coalition just before the US Presidential elections.3
Yet, the anticipated economic benefits flowing to India from a Trump Presidency are not obvious.
India might become a victim of a global growth slowdown if Trump’s protectionist policies are fully enacted.4 In terms of specific sectors, the Indian pharmaceutical and IT companies are likely to be adversely affected. The former gained considerably from ‘Obamacare’ (or The Patient Protection and Affordable Care Act) as it enabled Indian pharmaceutical companies to establish themselves as competitive suppliers of generic drugs.5 Trump seeks to repeal Obamacare.
The Indian IT sector has gained considerably from the outsourcing strategies of US companies. This might change as Trump has often noted that he wishes to bring back jobs home by finding ways of curtailing outsourcing. More generally, Trump’s anti-immigration stance might have a negative impact on skilled migration from India.
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1 The Indian media has given significant coverage to this topic. See, for example, India Today http://indiatoday.intoday.in/story/donald-trump-president-elect-impact-on-india-modi/1/806222.html
3 https://www.theguardian.com/us-news/2016/oct/17/donald-trump-hindu-nationalism-india
4 See, for example, the assessment provided by the Peterson Institute https://piie.com/system/files/documents/piieb16-6.pdf
5 Pharmaceutical exports from India to USA doubled under Obamacare. See, for example, Business Standard http://www.business-standard.com/article/international/trump-or-hillary-as-president-what-us-election-2016-results-mean-for-india-116110800728_1.html
