China and Donald Trump, the hope of a pragmatic acclimation

«Mr. Donald Trump will need to weigh the pros and cons. Above all, many assume that, being a successful businessman by background, he will prioritize in practical terms.»

Albert Louie

Does the Donald Trump administration mean more conflicts in Southeastern Asia?

Mr. Donald Trump, the US President-elect, may not deliver what he meant during his election campaign rhetoric. For example, Mr. Trump said that he would incriminate former Secretary Clinton for her email wrong-doing if he wins and he just refuted the idea shortly after he won the election. Mr. Trump will soon face the extreme difficulties when he assumes his Presidency in January, 2017. He will need to weigh the pros and cons. Above all, many assume that, being a successful businessman by background, he will prioritize in practical terms. For instance, perhaps he would fix the American domestic issues such as the national deficit, employment, social fabric, etc. rather than depleting America’s military resources far away in the South China Sea, where America would get nothing practical except a few fake claps from only a few countries such as Japan and perhaps Vietnam. As China is building a new port (a reasonable guess it is for both commercial and military purposes) in Pakistan, which has been friendly with China for over five decades, China’s 80% of oil import from the Middle East will no longer has to go through the Straight of Malacca. By the way, Malaysia is already in China’s arms, thus downgrading Singapore’s (a staunch ally of the US) strategic presence in the region. As a matter of fact, if President-elect Mr Donald Trump (as he reiterated numerous times during his election campaign) were to abandon the Trans-Pacific Partnership, then there is a vacuum in the region where China has been writing its own trade rules.

What is the Donald Trump priority, protectionism or the US economy revitalization?

Mr. Donald Trump will soon realize that global trade is interconnected as he will meet leaders from dominant economic powers such as China, Europe and Japan. Despite the fact that potential assumptions that certain trade tensions between the US, China and the EU may possibly occur during his early presidency, his ultimate objective is to keep America prosperous. That requires smooth trading conditions and terms as the US continues to trade with its key trading partners. What has been in the press over the years regarding protectionism is the American steel industry. It has accused Chinese steal products are being dumped on the US market. Again, among other similar Chinese products, this is one of the complex issues between the US and China trade over the years. Any drastic measures such as raising large import tariffs may trigger trade wars between the countries.

Will many American companies based in China come back to the US?

Well, not in the short term. Despite the fact that the President-elect Mr. Donald Trump’s rhetoric of keeping American jobs at home, globalization is a complex issue. Take the iPhone, for example. The design is done in the US, but its key parts such as its chips and assemblies are completed in Taiwan and China. Mr. Tim Cook can’t just fire his suppliers, and move those components to the US right away! The American companies producing mid-range products are likely to stay in China because their market is there, and they have adapted their Chinese consumer behavior and needs. As China’ s middle class population increases, the demand for higher end products such as GM’s mid to high end Cadillac brands are manufactured and sold well in China. Though, if and when the American economy and tax system in certain areas improve, certain American products, that depend heavily on the rule of law, protection re innovation, invention and intellectual property rights, may consider returning. Again, that also remains to be seen.

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