A COALITION ON FAIRER TRADE
Everyone in Asia already wanted to reduce China’s footprint in the manufacturing sector. Now, as markets in the West close themselves to Chinese goods, producers and policymakers here are terrified that Chinese overcapacity will flood their home markets with cheap imports.
These nations’ incentives aren’t perfectly aligned, however. They are in competition with each other to replace Chinese producers in specific sectors, for example. And some would also want to be the ones who “cheat” any final deal by trans-shipping Chinese goods as much as they can, or through the low-value assembly of goods prepared in factories on the mainland.
Something else will be needed as a glue to hold these diverse interests together. If aid and trade are both off the table, it’s unclear what the US has to offer.
Trump thinks access to US consumers is enough of a carrot, but for countries locked in competition with each other and with Beijing, the gains from that trade might appear too uncertain. After all, if they are asked to cut China out of their supply chains, it could raise their costs, perhaps by too much to break into the US market.
A coalition on fairer trade will need boutique strategies designed for each of these countries. Even if Bessent can somehow figure that out, he needs his boss to play along. Any partnership will require Trump’s willingness to haggle on the details, and respects these countries’ autonomy.
Trump has promised to negotiate with “more than 75” countries he says reached out to the US. Any such negotiation will need him to acknowledge that most of his Asian partners aren’t out to defraud the US.
Such a change of heart seems unlikely: After Xi’s visit to Vietnam, the president said the meeting’s purpose was “trying to figure out, how do we screw the United States of America?”
America will only benefit from a trade coalition that excludes China, ensures the US’ domestic regulations and higher standards don’t render its producers uncompetitive, and creates new supply chains that include US workers.
What Trump actually needs to achieve his ends is an inclusive, equitable, high-quality partnership with allies across the Pacific Ocean. A trans-Pacific partnership, if you will.
