Asia on edge over how Donald Trump will act in office

Asians who listened to Mr Donald Trump's victory speech yesterday will take comfort from his vow to rebuild America, "get along with all other nations willing to get along with us" and double the growth rate of an economy that is still considered the market of last resort.

Beyond that, for now at least, a Trump presidency looks like a stare into the deep unknown at a time when everyone from Tokyo to Islamabad would have wished for a familiar figure to occupy the White House.

The swoon in financial markets on news of the Trump victory underscores the deep unease the region feels over this untested world leader who has never held public office before, or even contested a municipal election. In Tokyo, Asia's most valuable stock market by capitalisation, not one stock on the Nikkei index was in positive territory yesterday.

While Asian leaders have come forth to greet the president-elect and vowed to work with him, there is no denying that Mr Trump's domestic-focused diatribes on trade, immigration and jobs all cause deep unease, particularly to those that rely on open economies to keep their growth engines ticking.

There is no question that for the immediate future at least, the all-important Trans-Pacific Partnership (TPP) will be on hold.

Had Mrs Hillary Clinton won, there was a chance that Mr Barack Obama might have tried to push it through during his lame-duck period in office. But given the message delivered by voters, it would be morally wrong for Mr Obama to push TPP further. That would mean a pause in the wider US rebalance to Asia as well.

"Trump's election brings with it a potential dramatic reorientation of longstanding US national security policies," The Soufan Group, a strategic advisory, warned clients in a note last night.

All this does not automatically mean improved ties with China.

Mr Trump has threatened to slap as much as 45 per cent duties on Chinese goods entering the US market. He also has threatened during the campaign that the United States may leave the World Trade Organisation under his watch.

As a businessman trained to keep his eye on the bottom line, he will doubtless also be aware that the profitability of American companies doing business in China has been steadily dwindling. Any moves to reverse that situation could give rise to fresh trade tensions with the No. 2 economy.

Meanwhile, government leaders in India, Asia's third biggest economy, worry that his stiff positions on immigration and jobs may hurt their outsourcing industry at a time when their business model is under threat.

The jobs-focused Mr Trump also is unlikely to humour Prime Minister Narendra Modi's "Make In India" ambitions, especially where US exports to that market are concerned. On the other hand, Hindu hardliners in that nation are rejoicing at the Trump victory in part because of his tough attitude towards Muslims.

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More worrying is the prospect of a renewed arms race, especially if Mr Trump should show signs that he will turn away from the region.

His foreign policy positions - that Japan and South Korea should do more in their own defence - could presage the unleashing of a nuclear arms race in north-east Asia as Seoul and Tokyo prepare for the contingency of a reduced US commitment to the region. South- east Asian states such as Vietnam also have to ponder whether they will need to recalibrate their ties with China, as the Philippines and Malaysia are doing.

But new policy options also could rise.

Mr Trump's friendly view of Russian President Vladimir Putin may put the brakes on Beijing's own fast-developing strategic relationship with Moscow, or at the very least widen Mr Putin's options. Asian leaders, particularly in South- east Asia, will have to pay careful attention in the months ahead to all this as the chips rise and fall.

To be sure, a year from now, some of the concerns that rose on the day of Mr Trump's triumph may well turn out to have been overblown.

From now to Jan 20, when he is installed as president, he has a crash course in national and global security awaiting him, along with copious briefings on trade, climate change and other vital issues. Even if his attention span is notoriously short, the import of those briefings will be hard to ignore. Strategic affairs, while influenced by individuals, have national interest at their core.

Besides, Mr Trump also has not named a single member of his future Cabinet, although he did pull some known faces to the podium during his victory speech. The world will have a better feel once he makes his key appointments.

Until then it is wise to keep in mind that candidates, once in office, do often reverse positions, as Prime Minister Lee Hsien Loong noted to Time magazine recently. "In every American election, crazy things are said. Positions are taken which the winners try very hard to forget afterwards," Mr Lee said.

"George Bush Sr said 'read my lips' and regretted it. All American candidates who won have before winning been very harsh on China, and after winning, much more restrained in their approach towards China. On trade, too, that has been true for some time."

This article was first published on November 10, 2016.
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