[Premium] Chairman’s Note (04/2017) – Trump’s America and ASEAN

October 2017 |
I was in Washington DC for a short visit 26-29 September and met with former officials, media and others to try to get a sense of changes here with the Trump administration, especially in relation to Asia and ASEAN. Not many companies in Singapore have direct commercial dealings with the USA. But there are many implications for us all whenever a new US administration takes office – let alone one that is controversial and unorthodox. Some of you have asked my views and I therefore thought to share initial observations.

1. Fake News and Traditional Elite Opinion Sources: The Trump administration complains about “fake news” from the traditional media. Some headlines and criticisms do resonate. But it is clear that the traditional opinion sources here – like the Washington Post and New York Times – are actively and openly campaigning against the President as a quasi-opposition. I do not judge their cause, but they are so involved that the elite media cannot serve as a reliable and unbiased source of information. Neither can the pro-Trump media. Think tanks in DC often play a role of intermediaries and influencers for the administration. But now most have been caught off guard and remain outside the circles of influence. Some, like the media, are still in denial and their analysis is highly colored.

2. Trump is Here to Stay: One example of how elites are in denial is talk about Trump’s impeachment over Russia. There is an extremely high threshold for impeachment. Right now, a core of voters strongly remains in support for President Trump, whereas no politician seems to be gaining popularity and influence. Democrats will hound the issue but the Republican party will not risk supporting an open move against Trump. Unless there is clear and incontrovertible evidence of treasonable action, impeachment is very unlikely. Like it or not, people need to deal with the fact that Trump is here to stay.

3. Charlottesville as Marker: The recent incident at Charlottesville marks an increasing culture war which has long been brewing and growing more extreme. Trump’s equivocal statement has been severely criticized by liberals but this has solidified his standing among some hardcore supporters. The US is a very divided society and Trump is riding this wave of angst to draw strength from one side. Do not expect him to moderate, let alone move towards the “liberal” side on issues.

4. Tax Reform, Markets and Trump Support: The efforts to push ahead with tax reform are now a priority. Trump’s plans will benefit the rich with tax cuts and also set the stage to push ahead with infrastructure projects. For this, the Republicans must sign off on budget deficits, which they had resolved against during the Obama administration. Expectation of these steps, together with the relative strength in America’s real economy, has boosted markets. If this succeeds, Trump will claim credit and his support will grow.

5. Early Days, Unorthodox Ways: The unorthodoxy of the Trump administration has startled many. Policies on many issues still remain sketchy and the policy-making process is unclear. These are early days and more detail may emerge but expect the unorthodoxy to continue. This is not only because of his personal instincts and character but Trump’s belief that such methods worked during the campaign and are still best. There continues to be a lack of officials at the Assistant Secretary level (who usually help set and administer detailed policy in each department) and this does not seem a priority. Instead, the President and key secretaries are likely to have advisors and assistants (formal and informal) – working more like a CEO office rather than through the functional line departments.

6. ASEAN Visits and First Impressions: The unorthodoxy of the Trump administration is visible in its engagements with Asia and ASEAN. The Obama administration started very strongly with Asia, with then State Secretary Clinton and her staff. In comparison, after withdrawing from the TransPacific Partnership, Trump has not set out any new initiative. Although he has met with some regional leaders, what has been said has inconsistent and contradictory. A string of bilateral visits with ASEAN leaders – already Vietnam and Malaysia, with Thailand and Singapore to come – may trigger a clearer sense of US policy. One thing to watch will also be whether Trump attends the ASEAN-hosted East Asia Summit.

7. Anti-China mood: While Trump’s overall Asia policy remains to be seen, there is a growing anti-China mood. The initial meeting with President Xi was positive but subsequently is turning with the perception that China is refusing to help with North Korea (Beijing says it has severe limits). Trade concerns with China are also re-emerging and many in the USA are watching Beijing’s Belt and Road Initiative closely. Trump may re-emphasize ties with US alliances – especially Japan. The visit by PM Prayut of Thailand, an old ally quite neglected since the military coup, suggests that alliances and curbing China’s influence may matter more.

In early October 2016, I was quoted in a Singapore newspaper to say that we should prepare for a Trump victory. One year on, it seems few people did, even in DC. Trump’s own team did not seem fully prepared for a Trump victory; hence his policies, one year on, remain inchoate and with few legislative or other “wins” at home and no Asia policy abroad.

Governments in Asia and ASEAN cannot afford to be anti-Trump and will have to find ways to interact and deal with the Trump administration. His character and statements have startled and this will likely continue. His hardcore support remains and there are potential gains he can make. As his engagements increase with Asia, Trump’s position towards the region will emerge and, for now, the new administration remains open to be influenced on Asia policy. I do not however expect a grand strategy or clearly articulated policy, but rather, a transactional attitude and deals over specific issues.

So much has been written about Trump but many analysts are often colored against him and focused on US domestic politics. I hope you might find these few points I have shared of some interest.

Yours sincerely

Simon Tay
Chairman