A Trump-led US will need to wake up to the economic realities of a strong Asia
Syed Munir Khasru says US President-elect Donald Trump has to get over his populist rhetoric and realise that, in today’s globalised world, Asia is a mighty economic force
In 1990, Asia’s share of world GDP in real terms was 23 per cent. This rose to 38.8 per cent in 2015 and is expected to go up to 45 per cent by 2025 if current economic trends continue.
Today, the East Asia and Pacific region is a major driver of global economic growth, accounting for two fifths in 2015. The United States maintains robust trade relations with many countries from this region. Five Asian nations were among the top 10 US trading partners in 2015. China is currently the largest goods trading partner of the US and was also the third-largest goods export market in 2015. As of last year, US goods and services trade with China, India and Japan stood at a staggering US$1.42 trillion, and US-Asean bilateral trade has increased 71 per cent since 2001. Asean also ranks No 4 among goods export markets for the US.
China is currently the largest goods trading partner of the US
President-elect Donald Trump, throughout his campaign, kept repeating how China had cheated the US out of millions of manufacturing jobs through currency manipulation and how these jobs needed to be brought back to the US. While it is true that, between 2001 and 2015, the US lost 3.2 million jobs to China, three-quarters of those in manufacturing, what is also true is that manufacturing bases in China and other emerging Asian economies have provided American consumers with access to quality goods at affordable prices and kept the wheels of the American economy turning through continued consumer spending.
Trump accuses China of stealing copyrights and currency manipulation
The US Consumer Sentiment Index, which fell to 68.2 in September 2010, stood at 91.2 in September this year. More American families can afford more clothing, smart TVs and phones, and other products because of Asia’s ability to churn out quality goods at lower costs. A “made in Bangladesh” T-shirt that costs an American US$2 would have cost US$10 if made in the US. In fact, during Trump’s campaign, several media outlets highlighted how the Donald J Trump men’s clothing and accessories line had their products made by factories in Asian countries like Bangladesh, India and China where production costs are lower.
It is simply not feasible to undo the global value chain mechanism already in place