The world has seen a sharp deterioration in trade relations in recent weeks, with U.S. President Donald Trump imposing new import tariffs on a number of countries, including China, the European Union, Japan and others.
These measures have caused a wide resonance in the international arena, particularly U.S. strongholds of anti-Chinese sentiment, across East Asia.
Trade Escalation, East Asia Under Fire
Trump initially imposed tariffs of 34% on China, 20% on the EU, and 10% on other countries.
Yesterday, however, Trump implemented a 90 day pause on all tariffs with the exception of China. Trump hiked tariffs up to 104% on Chinese imports as Beijing retaliated with a 84% reciprocal tax on U.S. imports.
Trump’s initial tariffs included high tariffs rates on Japan, Vietnam, and Taiwan, three of the U.S.’ closest allies in the region.
China responded with mirror tariffs and filed a complaint with the World Trade Organisation, saying the measures violated international trade rules.
Even with a pause, economic uncertainty is prompting widespread speculation that countries such as China, Saudi Arabia and Japan are considering a new trade deal to offset the damage caused by U.S. tariffs in the global economy.
However, officials have not confirmed these reports yet.
Taiwan: The Outlier in East Asia
East Asian countries are seeking the best of both worlds, in this new trade storm, with Taiwan and Japan seeking alignment on trade following the U.S. tariff pause.
However, overwhelming consensus on the longer impacts of business uncertainty will push East Asia to diversify their trade and defence partnerships irrespective of short-term remedies.
Geopolitical Balance
East Asia has traditionally relied on the United States for protection, especially in the security sphere.
Southeast Asian countries are under pressure from both China, offering capital investment through infrastructure investment whilst the U.S. offers a viable security umbrella, despite being called into question with Trump’s transactional shake-up to world politics.
This creates a complex geopolitical landscape in which countries in the region are forced to balance between different great powers.
Diplomatic Strategies
China, Saudi Arabia, and Japan are actively strengthening their positions in response to U.S. economic policy.
China is increasing its economic and political influence in Africa and Asia, expanding the Belt and Road Initiative.
Saudi Arabia is strengthening its ties with East Asia, focusing on energy security.
Japan, in turn, is actively developing economic and strategic alliances with its neighbours and the U.S. to minimise the impact of tariff policy.
These strategies are a response to the trade war and global challenges.
Technology and Trade Wars
Trade wars are having a significant impact on technology cooperation between countries, especially in areas such as artificial intelligence, 5G, and innovation.
The U.S. and China are at the centre of a tech standoff, which has limited technology exchanges and research cooperation.
Japan and the European Union, for their part, are trying to strengthen their positions by deepening partnerships with other countries to advance new technologies, despite global economic and political tensions.
In response to Trump’s tariffs, countries such as China, Saudi Arabia, and Japan are considering new trade alliances to offset the damage and deepen economic integration.
This could change the balance of power in East Asia, traditionally dependent on the U.S for security.
Amid a brewing trade war with China, leading economies in the Global South are looking for new ways to strengthen their positions even if Trump’s pause on tariffs comes as a relief to many in East Asia.
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