Trump redux and US-Thai-Asean ties
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Trump redux and US-Thai-Asean ties

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Republican presidential nominee and former US President Donald Trump takes the stage following early results from the 2024 US presidential election in Palm Beach County Convention Center, in West Palm Beach, Florida, on Nov 6. (Reuters photo)
Republican presidential nominee and former US President Donald Trump takes the stage following early results from the 2024 US presidential election in Palm Beach County Convention Center, in West Palm Beach, Florida, on Nov 6. (Reuters photo)

Under President Donald Trump, the trajectory of US-Thai-Asean relations will be defined by three factors -- rising trade imbalances, intensifying US-China rivalry and Asean's long-term aspirations under its Community Vision 2045. Donald Trump's "America First" policies will impose many challenges.

It might be too early to spell out his second-term strategy, but Thailand can expect what will happen. Mr Trump will prioritise American interests and prefer bilateral dealings over multilateral arrangements.

Needless to say, his US-centric pathway will affect countries with a trade surplus with the US, such as Thailand and its Asean colleagues. Beginning next year, all US trading partners, big and small, that trade with the US could face scrutiny. Therefore, trade partners must be ready to negotiate with the US to avoid facing new tariff hikes. Mr Trump's obsession with cutting down trade deficits means that the economies of Asean members must balance the two-way trade with the US. In addition, Washington's willingness to increase tariffs on imports -- particularly those from China -- poses a serious threat to the bloc's economic health.

Even though China remains the primary target, Asean countries with Chinese investment in Thailand, Malaysia, or even Vietnam can face an impact. In fact, the rift between the US and key Asean members can widen if the US plans to use trade penalties with these countries with Chinese investment to contain indirect Chinese influence.

No matter what happens, Asean will need to talk and do business, reminding the new administration about its economic significance. The bloc is expected to become the world's fourth-largest economy by 2030. Last year, the US-Asean trade reached US$395.9 billion (13.6 trillion baht), with the US investment in the region soaring to US$74.4 billion. Next year, the bloc's Digital Economy Framework Agreement (DEFA), a world first, will be finalised. It will triple Asean's digital economy to US$1 trillion by 2030. The bloc's economic ministers also have been very optimistic in speculating that the DEFA could double the digital economy to US$2 trillion.

During Mr Trump's first term (2017-2021), Thailand was the US's primary target among Asean countries for addressing trade deficits. Truth be told, Thailand has enjoyed a trade surplus against the US during the pandemic years, averaging US$29 billion annually. The current imbalance for the first 10 months of this year already stands at US$22 billion. Bangkok has emphasised that its investment in the US is growing.

Nonetheless, if trade deficits continue to be a contentious issue, Thailand may have to negotiate further to avoid new tariffs or other trade barriers. In this respect, using a trade-off with the trade imbalance would be possible. For instance, Thailand is one of the five American Indo-Pacific allies. As co-host of the annual Cobra Gold military exercise, the region's largest military exercise, the country has become central to Washington's regional military strategy. This exercise enhances regional security cooperation, focusing on command-and-control and interoperability of troops from the US allies and friends in response to all circumstances, including humanitarian and disaster operations.

Now in its 42nd year, Cobra Gold continues to serve as a vital pillar of the US security commitment in Southeast Asia. As such, Thailand must leverage this bargaining chip in future trade negotiations if necessary. During the Biden administration, the US also expanded security cooperation with other Asean members, particularly the Philippines, Vietnam and Indonesia.

The composition of Mr Trump's new security team will be crucial in determining the trajectory of Thai-US relations. If the new team is comprised of seasoned figures such as James Mattis or HR McMaster, as during Mr Trump's first term, then Thailand will be valued in the US grand strategy. However, if the new team consists of more hawkish advisors, Thailand could face difficult decisions due to its strategic economic and military ties with China.

If Mr Trump renews his trade war with China, Asean could become collateral damage. The Biden administration's Indo-Pacific Economic Framework (IPEF) initiative could also suffer. Since its establishment in May 2022, the 14-member high-end free trade pact has completed its negotiations except for the trade pillar. Mr Trump must choose whether to keep Mr Biden's legacy or continue the framework with or without the trade element. After all, the IPEF symbolises the US economic presence in the region.

Another withdrawal from the US-led trade initiative would gravely downgrade Washington's creditability in the region. Furthermore, it would adversely weaken the Free and Open Indo-Pacific strategy (FOIP). To retain a visible economic link, the US must connect the IPEF trade-related issues to the FOPI economic priority, which shares similar vital fields of cooperation, including digital, green, and blue economies.

All along, the US has been trying to weaken Southeast Asia from China's supply chain influence, particularly throughout the pandemic period. China's trade network in Asean is deeply embedded, with economies in the region tied to both Chinese supply chains and consumer markets. A more aggressive US approach towards China could disrupt these supply lines, putting Asean economies in a precarious position.

Moreover, Mr Trump's protectionist policies could further reduce Asean exports to the US. Many Asean nations, however, are diversifying their markets and reducing reliance on any single country, whether the US or China. Four key Asean members -- Malaysia, Vietnam, Thailand, and Indonesia -- have become BRICS partners, a group of emerging economies seen as a counterweight to the West.

Asean's pursuit of greater autonomy aligns with its long-term goals under the Asean Community Vision 2045, which envisions a more integrated and resilient regional bloc. The new vision has also acknowledged the new multipolar world and its strategic action plans are geared towards increasing the bloc's security and economic resilience. The new vision will be adopted by the Asean leaders at the Asean summit in May 2025.

Lately, Asean may have developed a new form of leverage through its rising semiconductor exports to the US. In the first quarter of this year, the US demand for semiconductors from Southeast Asia grew, signalling the region's ability to compete with Taiwan. Singapore, Vietnam, and Malaysia are key suppliers.

For Asean, expanding its semiconductor industry provides an economic boost and a bargaining tool to make deals with the Trump administration. If Washington sees Asean as a vital partner in global supply chains, especially for critical technology components, its members could secure favourable trade terms while avoiding economic risks tied to Mr Trump's trade policies. Taking advantage of the strategic importance of the new semiconductor ecosystem, the US private sector has already increased investments in Asean's high-tech sector.

In the same week that Mr Trump assumes his presidency on Jan 20, Asean foreign ministers are scheduled to have their first retreat in Langkawi under Malaysia's chair to work out the Asean agenda. Obviously, they will discuss the bloc's collective response to the Trump administration's ties with Asean. Mr Trump's past engagement with Asean was very dismal. At this critical juncture, his comeback and the new strategic environment could command his attention on the bloc. After all, as a reminder, he still has yet to fulfil his pledges to host the long-postponed Asean-US and US-Mekong Partnership summits.

For Thailand, it is still the same winding road with bumpy spots here and there. Striking a balance between China and the US is unavoidable, especially the "America First" agenda, without sacrificing ties with Asean and other major powers. Finally, it is hoped that the bloc's economic resilience with stronger intra-regional ties and strategic cooperation can ward off Trump-generated risks.

Kavi Chongkittavorn

A veteran journalist on regional affairs

Kavi Chongkittavorn is a veteran journalist on regional affairs

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