When the key battleground states in the U.S voted for Donald Trump, it was obvious that an epochal change was coming to the global platform. Over the years, America has always been at the forefront of forming alliances, promoting open trade and democratic values, but Trump seems to have been reading from a different book during his campaigns. It is against this backdrop that most markets tanked when it became clear that he was going to win.
Asia in American Campaigns
One of the sticking point during the American campaigns has been on trade and focus has been on Asia and Mexico. Trump and Clinton spurred on many issues but one that always cropped up during trade arguments was the Trans-Pacific Partnership (TPP). For 12 years, the outgoing president has hailed this an ideal alliance in the push for increased relations with Asia.
However, Trump has said this is the worst deal ever signed and promised to scrap it if he is elected. The other concern with Asia has been loss of jobs with Trump saying millions of jobs have been stolen by Singapore, India and China. To curb this, president-elect promised to punish companies that take their businesses abroad. On the issue of free trade, trump has called for punitive tariffs of 45% on Chinese products.
Some of the other issues concerning Asia that Trump has promised to do include abrogating the climate agreement between Chin and America and also suing the country at home and with the WTO.
What Trump Means for Asia
With Asia being a major political issue and a focus for the president-elect, it is no wonder the markets reacted so quickly. The Hong Kong’s Hang Seng index lost points, the Japan’s Nikkei 225 took a hit, Shanghai’s Composite also lost among other markets. While Asia’s markets are currently recovering, there are still concerns over what trump’s policies towards the region will be.
For China, Trump is both a friend and foe. With the collapse of TPP and disengagement with the region, China will have more leeway to bully other countries especially in the Southern Sea. At the same time, North Korea will watch with glee as South Korea and Japan are left denuded off the protection they have been enjoying for years. In Singapore, the shock of restrictions to the American market will be hard to bear considering the country is reeling towards a recession.
As the markets in Asia start recovering, analysts say it is too early to speculate whether Trump will go ahead with all the threats. This will become clear once he lays down his trade and foreign policies for the world to see.