American elections don’t usually matter that much to Asia. Regardless of who sits in the White House in Washington, Americans keep buying stuff made in Asia. America helps maintain the post-World War II geopolitical balance in the region. And the U.S. tries to delay the inevitable rise of China for as long as it can.
This time, though, American elections matter more to Asia. And even worse: No matter what, the outcome isn’t going to be a good one for the world’s biggest continent.
I’ve written a lot about why a President Donald Trump would be bad for Asia (download our report on the topic here). But that doesn’t mean that Hillary Clinton, the Democratic nominee for president, would be that much better for Asia.
What Trump thinks of Asia
Donald Trump seems to believe that Asia – specifically China – is a major cause of America’s problems. He says that Asia has stolen America’s manufacturing jobs. He also thinks China has been intentionally manipulating its currency lower, to make its goods cheaper to the world. As a result, Trump wants to place heavy import tariffs on Chinese goods to make U.S. goods more competitive.
This could bring the two countries closer to a trade war, where they’d put tariffs or quotas on each other’s imports and exports. That wouldn’t be good for anyone. And it would particularly hurt those countries in Asia that are heavily dependent on trade with the U.S. – and on global trade in general.
For investors, Trump’s stance on China and the rest of Asia could result in enormous disruption. Trump’s overall approach is worrisome from a policy angle – but also because of the great uncertainty that his unpredictability creates. And markets hate uncertainty.
Hillary Clinton’s perspective is different, but…
Asia might think it would be getting a friend in its corner with Clinton – especially compared to Trump. But Asia would probably be wrong.
As U.S. Secretary of State (a cabinet position focused on foreign relations and foreign policy) from 2009 to 2013, Hillary Clinton had a lot of experience in international issues. Regarding Asia, she set out a vision for American policy that became known as the American “pivot” strategy towards the Asia-Pacific (later rebranded as a “rebalance”).
At the time, Asia was rebounding from the global economic crisis. The U.S. was mostly focused on countering China’s increasing political and economic influence across the region. It aimed to do this through alliances, partnerships with emerging nations, regional institutions, trade and investment, military presence, democratic development and people-to-people ties.
Clinton’s first trip as Secretary of State in February 2009 was to Asia, when she visited Japan, Indonesia, South Korea and China. In 2010, she visited Vietnam, Cambodia and Malaysia as part of a regional tour. The same “pivot” policy also had President Obama visit India, Indonesia, South Korea and Japan. One of the most significant U.S. achievements in the region during that time was opening relations with Burma (Myanmar).
Before her time in office, Clinton was less conciliatory. She was against cooperating with China because of its human-rights record. She even suggested in 2008 that then-President Bush boycott the Beijing Olympics.
On the campaign trail, Clinton’s true colours with regard to Asia have come out again. For example, in July she accused China of “trying to hack into everything that doesn’t move in America,” in reference to a cyber intrusion into U.S. State Department personnel records.
But more importantly, Clinton’s overall tone has shifted. The extreme Asia policies that Trump advocates (and much else of what he says) have become part of the mainstream political conversation in the United States. That makes them much more likely to be implemented, even if he doesn’t become president. Also, Clinton’s opponent during the Democratic party primaries, Bernie Sanders, espoused some trade-related policies similar to those of Donald Trump. Clinton was already less inclined to be friends with China, and election politics have pushed her to what may have been her natural stance.
The example of TPP
Looking across Asia, one area of contention is the Trans-Pacific Partnership (TPP), the free trade agreement between the U.S. and 11 Pacific Rim countries central to Obama’s strategy for the region. All together, the parties to the deal account for approximately 40 percent of world GDP and 25 percent of global exports. The World Bank estimated that the agreement could raise GDP by an average of 1.1 percent in each country by 2030. (Critically, China is not a party to the TPP.)
Clinton was a vocal supporter of the TPP, saying in November 2012 that it “sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field”.
But by the time the agreement was finalised in October 2015, she was opposed to the partnership – most pointedly when facing Democratic rival Sanders, and ever since.
Not surprisingly, Donald Trump has been consistently against the TPP, calling it a “horrible deal” that would allow for China to “totally take advantage of everyone”. And, as we’ve written here, there is truth to his contention. China has made numerous side agreements with members of the TPP and would be in a good position to benefit if it ever comes to life. (It has not been approved by the U.S.)
Foreign policy in most countries, and in most elections, plays second seat to domestic issues. This is almost always the case in the U.S. And foreign policy aims are quickly sacrificed – on the campaign trail at least – to the politics of convenience, particularly when they interfere with more important electoral concerns.
Neither Clinton nor Trump will put Asia at the top of the agenda – although bashing it is a convenient device on the campaign trail. Trump has been more vociferous in his dislike of China’s policies. Clinton has a more nuanced view, given her extensive foreign policy experience. Asia should be frightened of a President Trump, for his policies as well as for his unpredictability. But a President Clinton would be no great friend, either.