Goodbye trade war

 

China seems to be winning the tariff war even as Trump threatens to impose a massive increase of tariffs on Chinese imports in response to the republic's announcement of new export controls on rare earths. — Getty Images/AFP

South-east asia, once only a bruising trade war’s secondary victim, should now have asean showing its mettle as china wins.

BEYOND multiple global uncertainties are two core fundamentals: Us-china relations being the world’s most important bilateral relationship, and economics determining much of everything else.

This makes the trade war between the world’s two biggest economies pivotal to all. Multiple spheres in various regions are impacted accordingly.

That much is the main plot in today’s geopolitics. Problems tend to arise when the script is amended without warning, explanation or acknowledgement.

US President Donald Trump has sought a personal meeting with Chinese President Xi Jinping since last year, but that will happen only next year. Why does it take two years for such a crucial event to occur?

It is precisely because of the summit’s importance that it has to take so long. Unlike MOUS, summits do not set the tone of an intended agreement but to cap what has already been agreed.

Transnational deals are too important to be left to formal summits with their pomp and pageantry. The serious business of negotiations by government experts and specialists differs vastly from the PR theatre of official photo opportunities.

The months and years between signalling interest in a summit and actually holding it are for senior officials to work out sufficiently agreeable terms to constitute a deal. That period of talks by officials began informally last year between the incoming US administration and China’s incumbent team.

It is a period now effectively coming to a close in ending the trade war, but still only unofficially. The basic agreement that is now done in all but writing has the US broadly conceding to China’s terms.

China is the only country that has pushed back on Trump’s tariffs, with resounding effect as recent events show.

After Commerce Secretary Howard Lutnick’s grating condescension about supplying China with only Nvidia’s sub-par microchips, Beijing blocked all of Nvidia’s chips. Nvidia boss Jensen Huang said China’s own chip development is only “nano seconds behind” his company’s best products.

In agriculture, China has stopped buying US soybeans for supplies from Brazil and elsewhere. With US farmers devastated, China again demonstrated considerable leverage.

With Trump clamping down on countries buying Russian and Iranian oil and gas, India was hit with high additional tariffs, but not China. Instead, China raised Russian gas supplies with the Power of Siberia (POS) pipeline and now also POS 2.

China is also importing more than a million barrels of Iranian oil daily, amounting to almost 90% of Iran’s output. These major purchases were never going to be impacted by US restrictions.

Trump declared victory on Tiktok but it was a net gain for China. Beijing refused to sell Tiktok’s proprietary algorithm, the heart and brain of the winning platform.

A copy of the original algorithm was supplied to US investors, and China’s Bytedance owns just under 20% of US Tiktok – yet is entitled to 50% of US profits. US negotiators must have realised that was the most they could get from China’s tough bargaining position and accepted it.

China has introduced new restrictions on rare earth exports, launched an antitrust probe into US chip giant Qualcomm, and will raise port fees for US ships in return. In virtually every sector China is fighting back through tit-for-tat action and new policies.

If there is still any doubt that China is leading the charge of what remains of the trade war, its use of carrots and sticks to access the US market confirms it. Beijing has offered more than a trillion dollars (RM4.2 trillion) of investment in the US through Chinese companies admitted there.

These could include Chinese electric vehicle companies, which Trump last year said he would invite to the US to provide jobs. Only the stronger economy can dish out inducements of such proportions to the relatively subordinate economy.

Such is the substance of a negotiated trade peace. Ultimately, Trump is less concerned about what actually makes a trade victory than what can be interpreted and portrayed as his personal triumph.

He is anxious to gain snatches of a win between trade skirmishes, however fleeting or questionable, and China is only too happy to provide them to win the trade war. More of this can be expected at next year’s summit.

Meanwhile, Louis Gave of Hong Kong’s Gavekal Research has declared China’s trade war victory. South-east Asia should likewise flip the old script to its favour.

Asean countries are not just collateral economies subjected to the whims of a trade conflict. When China takes a beating, South-east Asia was assumed to be beaten also.

But the US still hopes to obtain from this region what it failed to get from China. To do this it needs to keep up appearances that it is winning over China as the centre of global supply chains.

Asean can call that bluff to protect itself.

Repated posts|:

• 

  US GOVERNMENT SHUTDOWN

    https://bbc.com/news/articles/crrj1znp0pyo Anthony Zurcher North America correspondent  and James FitzGerald   Watch: What could happen du...
• 
  

Call for contingency plans in face of US govt shutdown

 

US revises tariff rate to 19%

 However, nation must urgently diversify its export destinations

PETALING JAYA: Malaysia’s revised tariff rate of 19% on exports to the United States offers a temporary competitive edge in the region but underscores the urgency for export diversification amid signs of growing US protectionism, economists warn.

Prof Emeritus Dr Barjoyai Bardai said the revised rate, down from 25% previously, positions Malaysia on par with neighbou­ring countries such as Thailand, Indonesia, Cambodia and the Philippines.

ALSO READ: Malaysian industries can breathe easier now

He said the rate is still more favourable than those imposed on Myanmar (40%), Vietnam (20%) and Taiwan (20%).

“We seem to be able to compete with our neighbouring countries. But we are far behind Singapore at 10%, as well as Japan and South Korea at 15%.

“With India at 25%, we are in a better position,” he said when contacted. What we really want to see is that the tariff imposed on Malaysia is as low or better than that of countries that are our competitors because we are exporting to the United States.

“So, if those countries have equal or higher tariffs than us, then our ability to compete remains intact,” he added.

However, he said that certain Malaysian exports may be vulnerable, especially low-­margin products such as solar panels, and electrical and electronic goods.

On the trade balance with the US, he said it depends on whether Malaysian imports from the US increase significantly, especially luxury goods, following the government’s decision to scrap the luxury tax.

“Although the luxury tax has been included in the expanded SST, the rate is still low,” he added.

He said Malaysia must urgently diversify its export destinations, as the US moves towards a more self-sufficient economy.

Barjoyai said semiconductors should be directed to countries with growing demand, such as China, India and Europe.

CLICK TO ENLARGE

For other items like solar panels, he said Malaysia should consider Latin America, Canada and Europe.

“There are still many untapped markets. In the long run, the United States will become a domestic-driven economy where they will seek to reduce imports.

“Today, they are already about 80% self-sustaining,” he added.

Echoing similar concerns, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the tariff adjustment signals that the United States remains open to dialogue, but the economic implications for Malaysia remain.

“As a result of recent discussions, the previously imposed retaliatory tariffs of 25% have now been reduced to 19%.

“Consequently, the negative impact on Malaysia’s economy is expected to be slightly mitigated.

“In this regard, Bank Negara has revised its GDP forecast for 2025 to a range of 4.0% to 4.8%, down from the earlier projection of 4.5% to 5.5%,” he said.

Afzanizam also highlighted the potential global impact of US ta­riffs.

“The 19% import tariff is expected to impact American consumers’ purchasing power.

“This may, in turn, dampen economic momentum in the US, which is the world’s largest econo­my. It poses a potential risk to glo­bal economic growth in the coming years,” Afzanizam said.

He also called for a balanced approach to foreign relations and economic strategy.

“It is crucial to preserve strong bilateral ties with the United States, while simultaneously exploring new opportunities with countries in Europe, the BRICS bloc, and strengthening economic and diplomatic cooperation within Asean.

“At the same time, efforts to boost productivity, build capacity and enhance economic resilience must be intensified to safeguard Malaysia’s economic sovereignty.

“These measures will reinforce investor and business confidence, underpinned by pragmatic policies and the government’s proactive response to emerging challenges,” he added.

Centre for Market Education chief executive officer Carmelo Ferlito, meanwhile, said the tariff revision reflects a political strategy rather than a pure economic measure.

“The reciprocal tariff on Malay­sia to 19% is the proof of what I have mentioned earlier,” he said, adding that US President Donald Trump was not interested in ta­riffs per se, but to reopen negotiating tables.

He said this is to show that the United States is the biggest consumer in the world and force countries to get closer to the United States as well as grant commercial facilitations.

Ferlito criticised the use of ta­riffs as a policy tool, arguing that they hurt both consumers and workers.

“Tariffs are bad, not just for Malaysia, but for the world,” he said, adding that ultimately, ta­riffs reduce trade opportunities.

“This means less choice for consumers, but also job losses, on both sides,” he added.

Related stories:

• Malaysian industries can breathe easier now
• US tariff cut signals global trust in Malaysia, says Nga
• Tariff cuts for 11,000 US products
• ‘Absolutely no compromise on halal standards’

Related posts:

Economic highlights of the 13th Malaysia Plan 2026-2030 

Why the cooperative spirit of ‘greater BRICS’ resonates worldwide

The 17th BRICS Summit is being held from July 6 to 7 in Rio de Janeiro, Brazil. This marks the first high-profile gathering of the "greater BRICS family" in its new "11+10" format - comprising 11 member countries and 10 partner countries - following Indonesia's official entry into the BRICS cooperation mechanism in January and Vietnam's official joining as a BRICS partner country in June. The summit is themed "Strengthening Global South Cooperation for More Inclusive and Sustainable Governance." As the host country, Brazil has outlined three key priorities for the meeting: deepening cooperation in public health, promoting a unified stance on climate change, and establishing mechanisms to facilitate trade and investment among member states.

On the eve of the summit, Colombia and Uzbekistan formally joined the New Development Bank as full members. Today, the BRICS family represents over half of the world's population, accounts for one-fifth of global trade, and contributes nearly 30 percent of global GDP. This remarkable momentum is no accident - it reflects the growing appeal of the "BRICS spirit" of openness, inclusiveness, and win-win cooperation. According to data from the International Monetary Fund (IMF), in 2024, BRICS collectively reached 4 percent GDP growth, significantly outpacing the global average. This demonstrates that the "greater BRICS" has become a "southern engine" that continuously fuels global development.

According to some foreign media outlets, this year's summit will discuss important topics, including the establishment of a new guarantee fund and the "Tropical Forests Forever Facility," and will voice collective positions on IMF reform. As the world is entering a new period of turbulence and transformation, characterized by rising unilateralism and protectionism, and some major powers increasingly disengaging from international governance, BRICS remains steadfast in its original aspiration, focusing squarely on cooperation and development. All its agendas and agreements are being gradually implemented, turning words on paper into real development outcomes. As of 2024, the BRICS New Development Bank has approved 120 projects worth a total of $39 billion, covering key sectors such as transport infrastructure, clean energy, healthcare, and social development. As the "vanguard of the Global South," the "greater BRICS" governance proposals are receiving global attention, and the world is looking to the "greater BRICS" for wisdom and contributions.

The growing influence of the "Greater BRICS" is evident in Western reporting. From the very start, the Rio BRICS Summit has become a focal point of global attention. Reuters noted that the expansion of the "Greater BRICS" "has added diplomatic weight to the gathering" and the bloc is presented "as a defender of multilateralism in an increasingly fractured world." The New York Times focused on the new role of "BRICS" in global governance, emphasizing its ambition to "rebalance global power dynamics." Although some media outlets maintain a "critical" and "skeptical" attitude toward the BRICS Summit, the inherent "traffic appeal" of the Rio Summit is enough to reflect the international community's attention to and recognition of BRICS.

The BRICS countries differ in terms of historical culture, political systems, economic size, and development levels, and there are differences between overall interests and individual interests. However, this precisely reflects the valuable inclusiveness and complementarity of the BRICS mechanism. BRICS cooperation is a systematic collaboration of the Global South; it is both comprehensive cooperation and open-door cooperation. It embodies the voices of the Global South, providing more development opportunities and equal rights for countries in the Global South, and promoting an equal and orderly multipolar world as well as a universally beneficial and inclusive economic globalization. This not only aligns with the interests of the Global South but also contributes to the common good of the world.

From promoting the establishment of the New Development Bank to advocating for the "BRICS+" cooperation model; from articulating the "four major partnerships" among BRICS countries to building new industrial revolution partnerships within BRICS, China's contributions to the BRICS mechanism are evident. According to the "Hand in Hand: China-LAC Mutual Perception Survey," released by the Global Times Institute during the "Global Times' Overseas China Week and Global South Dialogue" series of events held in Latin America in late June, a majority of respondents from six Latin American countries believe that the BRICS can represent the Global South to voice its concerns on the international stage. Furthermore, 93 percent of Latin American respondents believe that China has brought opportunities for development to the region, and 84 percent recognize China's development prospects. Through its own actions, China has built a bridge of hope for common development, making the gears of "greater BRICS" cooperation operate more smoothly.

IIn the face of the ever-changing international landscape, BRICS countries have demonstrated strong cohesion and action, providing a "BRICS answer" to the changes unseen in a century, which enhances the credibility of BRICS. The Rio Summit will mark a new starting point. Looking ahead, BRICS countries will continue to uphold the "BRICS spirit," deepen cooperation in various fields, promote reforms in the global governance system, and make greater contributions to world peace and development.- Global Times

Related:

BRICS: not against anything, but for development, fairness and Global South

BRICS is not “against” anything; it is “for”: for the development, for a fairer world order, and a larger role for the Global South. It concentrates on specific development problems, which makes BRICS very attractive to other developing

Malay Mail

https://www.malaymail.com › malaysia › 2024/10/26

26 Oct 2024 — Malaysia made it as a partner country into the Brics alliance on Thursday, along with neighbours Thailand and Indonesia.

CNA

Chttps://www.globaltimes.cn/index.htmlhina says BRICS not seeking 'confrontation' after Trump tariff threat

Trump Warns of 10% Tariff for ‘Anti-American’ BRICS Policies

Reuters

Trump threatens extra 10% tariffs on BRICS as leaders meet in Brazil

Over half of Australians believe China will be most powerful country by 2035: poll

 

Photo: screenshot from the Lowy Institute Poll

A new Australian poll has found that more than half of Australians (56%) believe China will be the most powerful country in ten years, while only about a quarter (27%) say the same of the US, noting "attitudes toward China improved incrementally, but caution remains." 

Similarly, more believe China (58%) will lead technologically in ten years compared to the US (12%), according to Lowy Institute Poll 2025 Report published on Monday

This reflected a positive shift on Australian perceptions of China with growing number of Australians gaining firsthand exposure to China's realities, a Chinese expert commented on Monday. The expert hopes in developing bilateral ties, Canberra would not be hijacked by external forces, stressing "the common ground far outweighs differences, and bilateral relations must be defined by cooperation, not divisions."

Attitudes towards China improved incrementally, but caution remains, the Australian institute said in the summary of the poll. The poll reports the results of a nationally representative survey of 2117 adult Australian residents, conducted between 3 and 16 March. 

For the first time since 2020, Australians were just as likely to see China as an economic partner than as a security threat - though a clear majority (69%) continue to think it likely China will become a "military threat" to Australia in the next 20 years, according to the poll.

About half think Australia should cooperate more with China on climate change (49%). Views on economic engagement are mixed — a plurality (43%) say Australia should be trading at about the same level as now, whereas about half (49%) say Australia should be attracting less investment from China, shows the poll.

Regarding Australia's relationships with the superpowers, a bare majority continue to say the US is more important to Australia (52%), while a lower proportion prioritize China (43%), the poll shows.

Australian Prime Minister Anthony Albanese (45%) enjoyed a 20-point lead over Peter Dutton (25%) in Australians' confidence in him to manage the relationship with China, according to the poll.

"There's slightly more trust, slightly less threat perceptions, [but] it's still a pretty bleak picture for how Australians look at China," The Guardian quoted Ryan Neelam, the poll author and a director at the Lowy Institute, as saying.

Since the 2024 survey, the gap between Australians' trust in the US compared with China has more than halved, as perceptions of China continued to improve from their nadir in 2022, The Guardian reported, quoting Neelam.

Commenting over the poll results, Chen Hong, director of the Australian Studies Center at East China Normal University, told the Global Times on Monday that in previous years, under the influence of the then-ruling party's political maneuvers and the deliberate smear campaigns by certain anti-China forces in Australia's media landscape, public perceptions of China had been distorted and mired in so-called "China threat" narratives. This led to notably negative attitudes in polls, such as the Lowy Institute Poll 2022 Report.

However, facts speak louder than rhetoric, Chen continued. Recent years have seen growing number of Australians gaining firsthand exposure to China's realities, particularly after China's visa-waiver policy for Australians, Chen said.

"For instance, we've recently hosted multiple delegations from Australia and New Zealand, with more set to visit," Chen said, sharing his experience. "The latest poll reflects a more objective shift in public sentiment," Chen noted.

Yet while Australians increasingly recognize these truths, the persistence of a majority (69%) viewing China as a future "military threat" reveals the lingering impact of fabricated "China threat" narratives, Chen remarked. 

In addition, according the Australian poll, just over one in three Australians (36%) trusted the US to act responsibly in the world, a 20-point drop since last year and the lowest level on record since the Lowy Institute began polling in 2005.

Despite the sharp drop in trust towards the US, more than six in ten (63%) continue to think that the US would come to Australia's defense if it were attacked, and more Australians say the country should remain close to the US (57%) than those who think Australia should distance itself from its major ally (40%), said the poll.

Nevertheless, most Australians (68%) are pessimistic about the current US administration. Australians are evenly split on Washington's demand for US allies to spend more on defense, according to the poll.

Since the 2024 survey, the gap between Australians' trust in the US compared with China has more than halved, as perceptions of China continued to improve from their nadir in 2022, The Guardian reported, quoting Neelam.

According to The Guardian, Neelam said "That's quite remarkable for Australia's key security ally to have such a low level of trust." "The weight of expectation is that China will be more powerful and more predominant in the global system," he said.

Support for the AUKUS nuclear-powered submarine deal remained steady, with two-thirds of Australians (67%) in favor—roughly unchanged from 2022 (70%), shortly after AUKUS was announced.

As the US consistently prioritizes its own interests and national security, even at the expense of allies, a stance that has fueled growing public disillusionment in Australia, Chen pointed out.

But the expert, citing the poll showing 63% of Australians still believe the US would defend Australia if attacked, said this exposes a lingering, unrealistic idealization of American commitments.

Source link

ASEAN-China-GCC Summit in Malaysia sets an example for global cross-regional cooperation

 Chinese Premier Li Qiang gives his opening remarks during the ASEAN-GCC-China Summit at the Kuala Lumpur Convention Center in Malaysia on 27 May, 2025. Photo: AFP

The successful convening of the ASEAN-China-GCC Summit in Malaysia has been widely recognized as a "landmark" event of major significance. The Joint Statement of the ASEAN-China-GCC Summit adopted at the summit marks the transition of cooperation among the parties from concept to reality. This summit not only showcased the surging momentum of Global South solidarity but also expanded the horizon of cross-regional cooperation and inter-civilizational integration. The three parties view their differences as opportunities for cooperation and promote development through unity, which not only responds to the common aspirations of Global South countries but also provides a new model of cooperation for the world.

The fruitful outcomes of the first trilateral summit are clearly reflected in the Joint Statement of the ASEAN-China-GCC Summit. In the economic area, the three sides agreed to leverage their complementarities to strengthen collaboration in the fields such as trade, investment and finance, promote economic integration, and enhance industrial and supply chain resilience. In promoting the de-escalation of regional tensions, the three parties jointly called on all sides involved in Middle East conflicts to refrain from targeting civilians and to uphold international humanitarian law, thereby laying a cornerstone for regional peace and stability. The three sides will also deepen cooperation in cultural exchanges, energy security and sustainability, as well as digital transformation and innovation. In addition, to further facilitate the movement of people between China and other countries, China has decided to expand its visa-free policy, now covering all GCC member states. With the implementation of the aforementioned outcomes, trilateral cooperation will surely advance to a higher level, broader areas, and deeper dimensions.

Beyond bringing certainty to the region and the world, the trilateral cooperation holds a deeper and more unique significance. 

It transcends the once-popular notion of a so-called "clash of civilizations" by transforming differences in cultural traditions and stages of development into powerful drivers of complementary collaboration. This, in turn, unveils a new chapter of mutual learning among human civilizations.

If viewed through the lens of bloc confrontation, the trilateral cooperation would be seen as friction among different religions and as a geopolitical tug-of-war forcing countries to take sides. However, from the perspective of a "shared future," what emerges is something entirely different: the GCC with its vast energy reserves and multi-trillion-dollar sovereign wealth funds; ASEAN's manufacturing strength and its emerging consumer market of nearly 700 million people; and China's formidable industrial capacity, technological innovation, and infrastructure-building expertise. Together, these elements signal enormous development potential and ample room for win-win cooperation. As one Qatari economic expert observed, "Everyone will benefit from this historic summit."

China, ASEAN, and GCC countries together account for roughly a quarter of the world's population and global economic output. The groundbreaking cooperation among the three parties sends a clear message to the world: Unity and joint development are not distant dreams but a tangible path already unfolding. This cooperation is not a "victory" for any one side, but an epitome of peace and development, cooperation and mutual benefit. In the face of the increasingly severe realities of global deficits in peace, development, and trust, the trilateral summit has injected new vitality into the maintenance and practice of multilateralism. 

In the future, countries in the Global South, such as those in Africa, Latin America, and beyond, can certainly envision a richer imagination in building a comprehensive cross-regional cooperation network and achieving open and inclusive development.

In this "big triangle," China is both a participant and a supporter, injecting new momentum into tripartite cooperation through its own high-quality development. Whether from China's economic data or the global capital rush to invest in China, it is evident that the Chinese economy, having weathered storms, has become deeper, richer, and more inclusive. This stability, certainty, and inclusiveness provide a solid foundation for the international community, including ASEAN and GCC countries, to trust and invest in China. 

The recent announcement of the completion of the negotiations on the Version 3.0 China-ASEAN Free Trade Area has fostered more positive expectations regarding China's completion of free trade agreement negotiations with the GCC. It is believed that with the enhancement of trilateral trade levels, China, ASEAN, and GCC countries will all further benefit from open cooperation.

Just as President Xi Jinping said, "For us to break through the mist and embrace a bright future, the biggest strength comes from cooperation and the most effective way is through solidarity." This "1+1+1" cooperation model among China, ASEAN, and the GCC is a concentrated embodiment of this spirit. It not only benefits each individual party but also contributes to a greater overall increment for Asia and the world as a whole. 

It is believed that the three parties will unite to generate tremendous strength, bringing a more prosperous and stable development outlook for the region and the world, injecting continuous positive energy into the cause of world peace and development, and providing lasting momentum for the building of a community with a shared future for mankind. -Global Times

Rrlated posts:

How Asean can ease the birth pains of the multipolar world