Early Sunday morning, a deranged gunman murdered 49 people in a nightclub in Florida, in the U.S. Though half a world away, the worst mass shooting in U.S. history could have a big impact on Asia.
The end of globalisation?
As we’ve written before, the potential of celebrity billionaire Donald Trump becoming U.S. president is a big threat to Asia. Protectionism, in particular through U.S.-China trade “reform,” is an important element of Trump’s foreign policy.
He argues that China is taking American jobs, breaking the rules of international trade, stealing commercial secrets, and manipulating its currency to gain an economic advantage. Part of Trump’s plan to “make America great again” (his campaign slogan) appears to be a trade war with China and much of the rest of Asia.
This is an attack on the globalisation of trade, commerce and business that has been a building block of economic growth in recent decades – especially for Asia. The bottomless American consumer appetite for more things has been rocket fuel for many Asian economies.
Today, some countries in Asia – Singapore and Hong Kong in particular – thrive because they are at the centre of the global trade web. As shown below, trade accounted for 439 percent of Hong Kong’s total economic output in 2014, and 351 percent for Singapore. That compares to a still-high ratio of 138 percent for Malaysia, and just 30 percent for the U.S.
Other elements of Trump’s foreign policy similarly reflect a strong anti-foreigner sentiment in American society. He wants to build a wall between the U.S. and Mexico to stem the flow of immigrants from Latin America into the U.S. And he’s repeatedly called for a temporary ban on Muslim immigration to the U.S.
During the shooting, the gunman pledged allegiance to radical Islamist terror group ISIS, and he had been investigated by the domestic U.S. intelligence agency for possible links to ISIS. (However, he was American, and born in New York.)
Following the Orlando shootings, Donald Trump renewed his calls for a ban on Muslim immigration, and earlier this week expanded it to cover all countries that have had some history of terrorism.
Trump’s fortress-America policy stance resonates with the U.S. population. He is very likely going to be one of the two main U.S. political parties’ candidate for president.
A poll last month found that 43 percent of adult Americans supported a ”temporary ban on Muslims who are not U.S. citizens from entering the United States.” That percentage is likely only to increase following the Florida shooting.
China, terrorism, and “not one of us”
The brand of xenophobia that large segments of the American population is subscribing to – through Donald Trump – doesn’t equate trade with China with Islamic terrorism. But it does cultivate a mentality that excludes anything that isn’t “American” (as defined by Trump’s supporters).
And in that way, a gunman in Florida with possible links to foreign terrorism represents a big threat to trade with Asia – and to Asia’s economic growth.
The underlying discontent of a large number of Americans that Donald Trump has succeeded in harnessing isn’t going to go away – even if there is no President Trump. He has created space for other opportunistic politicians to follow his path. And Trump’s policies – his attitudes toward Asia are relatively mild compared to other things he’s said – will in coming months become mainstream. And then it’s a matter of time before they’re enacted.
What does this mean for Asia? It’s going to have to find new sources of demand. Markets that are now benefiting from American demand will need to diversify. Economic growth will likely slow.
For now, there’s nothing to do… but this is something to keep a very close eye on, because everything stays the same – until everything changes, all of a sudden.