Donald Trump was elected president as a populist among Americans. So Asia might wait awhile before the New York real estate billionaire with ideas from deporting immigrants to eroding the sanctity of national parks gets around to figuring out policies for the world’s biggest continent. But Asia isn’t a place Trump can ignore. Here are five reasons Trump must cooperate with Asia after taking office Jan. 20 and give the place a lot of what it wants:
President-elect Donald Trump. Photographer: Pete Marovich/Bloomberg
1. Trump has valuable sweet spots in Asia
If personal concerns such as money play into Trump’s Asia policies, we might expect him to ensure booming economies in South Korea, India and the Philippines. His company the Trump Organization developed three condominium towers in Seoul and three in other Korean cities, all open since 2007. A 75-level Trump Tower is due to stand out in Mumbai and was designed by Hirsch Bedner Associates of another Asian country, Singapore, the Trump Organization’s website says. In Makati, the ritzy part of Metro Manila, the company is building a glassy high-rise with 220 large homes “inspired by New York City’s most fashionable districts,” the website says.
2. The president-elect needs to watch a few Hong Kong tycoons
Chinese investors in Hong Kong, per this piece from Forbes last year, once got entangled with one of Trump’s properties. When his Riverside South project in New York hit financial trouble in the 1990s, Trump found Henry Cheng of the New World group. Cheng was a big-time developer and head of one of Hong Kong’s richest families. FORBES has placed the Cheng family’s net worth at $11.5 billion. The investors bought a mortgage and sold the project some 10 years later, earning $1.8 billion. Trump sued the Chinese partners, alleging they ignored higher bids and evaded taxes. In 2009, the Manhattan district attorney indicted some of those involved on suspicion of tax evasion.
3. Playing too hard with China would backfire at home
Trump rode China hard during the 595-day presidential campaign, calling it a “cheater” at trade, a “currency manipulator” and threatening military movement to stop Beijing’s expansion in nearby oceans despite protests from neighboring governments. But his tone has softened he won the Nov. 8 election.
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American companies need China. Their exports to the world’s biggest market by population size totaled $113 billion in 2015, making China the third biggest destination after Canada and Mexico, the U.S.-China Business Council advocacy group says. A who’s-who of American multinationals still run factories in China despite rising costs.
4. Risk of conceding Southeast Asia’s fastest-growing middle class
American companies would give up increasingly well-off Vietnam to someone else if Trump turns campaign talk into reality. He has criticized the Trans Pacific Partnership (TPP) as bad for the United States, which led formation of the 12-nation trade zone under President Barack Obama. The U.S. Congress has until February 2018 to ratify the TPP. Vietnam was to be a member of it but the country has put off its ratification.
“The United States has announced it suspends the submission of TPP to the parliament so there are not sufficient conditions for Vietnam to submit its proposal for ratification,” Prime Minister Nguyen Xuan Phuc said to the National Assembly.
Countries with Vietnam trade deals — and places such as the European Union already have them — get low-tariff access to the Southeast Asian country’s increasingly attractive consumer market. The middle and affluent class in Vietnam will double from 2014 to 2020 to 33 million people, more than one third of the population, the Boston Consulting Group estimates.
“If Trump does in fact dump the TPP, we will unfortunately see FDI from the U.S. slow down and the chances of U.S. companies tapping into Southeast Asia’s fastest-growing middle class diminished,” says Oscar Mussons, international business advisory associate with the Dezan Shira & Associates consultancy.
5. The Philippines is getting stronger at the expense of U.S. influence
Trump must confront Philippine President Rodrigo Duterte’s anti-American fervor to advance relations with the Southeast Asian country that’s also courting China and Russia. Poor relations with the Philippines, which the United States has helped militarily since the 1950s, would move the broader South China Sea sovereignty dispute further toward Beijing’s agenda of controlling the whole ocean. Manila also claims part of the sea but has shelved its once raging dispute with China. Trump–like all American leaders since the Cold War–has at least talked big about containing China geopolitically.
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