Armstrong, Shiro; Gordon, Jenny
Description
The world’s two largest economies and trading nations are skirting
around the brink of a trade war. This puts at risk the international
trading system that underpins prosperity in the global economy.
The US administration’s America First agenda has brought
uncertainty, and the risks have intensified in President Donald
Trump’s second year in office with the tariffs he slapped on steel and
aluminium imports and the threat of large-scale protection aimed
at China. The European Union, China...[Show more] and others have threatened to
retaliate as the US measures are implemented.
A managed trade deal between China and the United States
currently looks a likely outcome. Although it might be better than
a full blown trade war, it will involve measures outside of the rulesbased order. That would have significant negative spillovers to other
countries, diverting trade and investment in ways that diminish
global welfare and exacerbate political tensions. Nor will it reduce the
United States’ trade deficit.
More than any other region, Asia relies on open markets and
confidence in the multilateral system for economic and political
security.
Adjusting to China’s rise was always going to be difficult to manage
for the United States, its allies and the established order. But President
Trump has raised the stakes and multiplied the risks.
If Trump is intent on tearing up the existing global economic order,
how might the rest of the world respond, preserve what works and fix
what doesn’t work without major disruption?
The essays in this issue of EAFQ bring together analysis from the
region’s top thinkers on the evolution of, and changes in, the
US–China relationship, the threat to the global order and what
options exist for moving forward.
The shift away from US leadership in trade, what needs to be
done to rebuild the support for openness in America, Japan’s difficult
position, the Brexit ordeal, and Asia’s response are all featured in this
issue.
The regular Asian Review section includes essays on Malaysia’s
democracy and modernisation, Chinese governance and a deep dive
into the US–China economic relationship.
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