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A general view outside Exchange Square in Hong Kong's financial district. Asian stock markets have plummeted amid growing fears of a global trade war, as Donald Trump described his tariffs as ''medicine'' and showed no indication of backing down.
Don’t call it a trade war
In the latest twist of the United States’ trade war with China and the world, US President Donald Trump declared Monday that he would impose an additional 50% levy on Chinese imports on April 9 if Beijing refuses to drop its retaliatory tariff. The Middle Kingdom announced a 34% duty on US imports last week, matching the White House’s new excise on Chinese products.
The US follows through. Treasury Secretary Scott Bessent said the tariffs revealed on “Liberation Day” last Wednesday would be a ceiling on other countries, “as long as you don't retaliate.” China’s response forced Trump’s hand and now puts the two superpowers firmly in a trade war — one that is unlikely to benefit either country economically. The 100% tariff that Trump proposed last year is closer to becoming a reality.
No escape in Asia. China isn’t the only major Asian power that is suffering from these tariffs. Several major exporters to the United States — including South Korea, Taiwan, and Vietnam — were slapped with high levies. The world’s largest continent has been a hub for cheap production for the American market, so these countries have high trade surpluses with the United States — and high tariffs to boot.
The Asian markets have reacted accordingly to the tariffs. Before its rebound on Tuesday, Japan’s Nikkei had lost more than any other major stock index worldwide since the US president’s second inauguration. Indices in Shanghai and Hong Kong suffered one of their worst days on record Monday — both recovered some of the losses Tuesday, but remain far behind where they were. Samsung Electronics, by far the biggest firm in South Korea, has lost nearly 10% of its value since April 2.
Will Trump budge? Despite the wholesale market downturn — US stocks also continued their freefall on Monday — Trump hasn’t pulled back yet. The president has dropped occasional hints that he’s flexible to changes and he opened negotiations with Japan yesterday, but that he seems unlikely to moderate his stance with China, according to Eurasia Group’s China Research Director Lauren Gloudeman.
“US-China relations are deteriorating quickly toward unmanaged decoupling, as both sides are engaged in a game of chicken and neither President Trump nor President Xi are likely to blink soon,” said Gloudeman. “We expect China to retaliate in kind, as the leadership has pledged to ‘fight til the end’ against Trump's measures.”
Japanese Prime Minister Fumio Kishida attends a press conference to announce that he will not run for the Liberal Democratic Party's presidential election in September at the Prime Minister's office in Tokyo on August 14, 2024. As a result, PM Kishida will retire from Prime Minister after a new LDP president is elected in next month.
Japanese PM Kishida steps aside
Prime Minister Fumio Kishida announced early Wednesday that he will not stand for another term as leader of the Liberal Democratic Party in September, which will clear the way for a new PM. The move is a surprise, though perhaps not a shock, given Kishida’s perennially abysmal approval ratings amid struggles to balance a plummeting yen in a sluggish economy.
Kishida’s departure now will give whoever comes out on top of the LDP’s internal party hierarchy about a year’s runway before the next general elections, which must be held in October 2025. The LDP’s dominance in the Diet is legendary — it has ruled with only two brief interruptions since 1955 — but the new PM will need to use every minute of the next year to make his case to voters.
For all his unpopularity at home, Kishida won admirers in Washington with his efforts to ramp up Japanese defense spending and improve relations with other US allies like South Korea and the Philippines. We’re watching how his successor tackles security strategy, and if that endears him at all to Japanese voters.
Podcast: Unpacking the complicated US-Japan relationship with Ambassador Rahm Emanuel
Ian Bremmer is in Tokyo, Japan, to check in on America’s “pivot to Asia.” How’s that going? Given that neither Ukraine nor Israel is located in the Asia Pacific, it is not so great!
In 2011, then-President Obama announced on a trip to Australia that US foreign policy would be shifting its focus away from costly wars in the Middle East and towards strengthening partnerships in the Asia-Pacific to curb a rising China. Twelve years later, we’re still pivoting. But if we ever do get there, we will have to take Japan, one of our closest regional allies, along with us. To talk about US-Japan relations, as well as a whole host of sticky policy issues, foreign and domestic, Ian is joined by US Ambassador to Japan Rahm Emanuel. Ian will also get his take on the Israel-Hamas war and the fighting in Ukraine.
Chinese Foreign Minister Wang Yi, South Korean Foreign Minister Park Jin, and Japanese Foreign Minister Yoko Kamikawa pose for a photo prior to the 10th trilateral foreign ministers' meeting in Busan, South Korea, Sunday, Nov. 26, 2023.
China, Japan, and South Korea to resume annual trilateral meetings
Amid escalating tensions in the South China Sea and faced with the looming Taiwan election, the foreign ministers of China, Japan, and South Korea held their first in-person talks since 2019 on Sunday, in Busan, South Korea, with hopes of paving the way for resumption of formal annual trilateral summits.
The three countries had begun holding annual summits in 2008 but suspended them four years ago during the COVID-19 pandemic. Contentious issues up for discussion at this preliminary meeting included China’s ban on Japanese seafood due to Tokyo’s discharge of treated radioactive wastewater from the Fukushima nuclear power plant, North Korea’s recent spy satellite launch, and Japan and South Korea’s deepening ties with the United States, including their recent move to strengthen their mutual security cooperation.
Next steps: Japan’s Yoko Kamikawa, South Korea’s Park Jin, and China’s Wang Yi agreed to hold a trilateral leaders’ summit at the “earliest” possible time. The three pledged to cooperate in areas of people-to-people exchange, trade, technology, public health, sustainable development, and security, according to South Korean and Japanese statements.
“We three ministers agreed to restore and normalize three-nation cooperation at an early date,” Park Jin told reporters. South Korea had previously indicated that it would like the meeting before year’s end, but with December just around the corner, this may be a tall order.
FILE PHOTO: Trekkers pause to admire Mt. Kusum Kangru (6369 mts) in the Mt. Everest region in Nepal March 30, 2006.
Nepal bans TikTok over social disruption
Nepal’s government this week banned the Chinese social video app TikTok, effective immediately, claiming it was disrupting the “social harmony” of the small Himalayan nation.
Local media report that authorities registered over 1,600 TikTok-related cybercrimes in the past four years, and the government is also concerned about videos promoting sexism, discrimination along traditional South Asian caste lines, and vigilantism related to the alleged slaughter of cows, which Hindus (the majority in Nepal) view as sacred.
Nepal is in good regional company. India, Pakistan, Bangladesh, and Afghanistan have all banned TikTok, citing similar content concerns. The United States, European Union, and other countries further afield have implemented full or partial bans on TikTok as well, though their concerns are generally tied to feared Chinese snooping on government devices rather than social disruption.
Geopolitical considerations don’t seem to have been the primary driver in Kathmandu’s decision to ban the app, but Nepal has outstanding territorial disputes with Beijing, and skepticism about Chinese intentions is nothing new.
What comes next: Activists working to expand free speech protections in Nepal’s fragile democracy say the ban will stifle criticism of the government by closing one of the few viable platforms. About 2.2 million – out of 30 million – Nepalis use TikTok actively, and a group of 30 civil society organizations may take the government to court over the ban.US Secretary of State Antony Blinken (left) and South Korean Foreign Minister Park Jin hold a joint press conference after their talks in Seoul on Nov. 9, 2023.
Blinken comes home, Biden gears up for Xi
US Secretary of State Anthony Blinken wrapped up a tour of Asian nations last week, as the United States worked to shore up support for its positions on issues including Russia’s war in Ukraine, China’s increased belligerence toward Taiwan, and the Israel-Hamas war in the Middle East.
On Thursday, Blinken met with South Korean officials including President Yoon Suk-yeol. The two countries reportedly aligned on their approach in the three arenas of conflict. According to South Korean intelligence reports, the matters are closely related. During a closed-door briefing to lawmakers last week, South Korea’s main spy agency said it believes that North Korean leader Kim Jong Un instructed officials to “comprehensively support” Palestinians and that the North could be considering selling weapons to terrorist organizations in the Middle East.
Then it was off to New Delhi, where Blinken and US Secretary of Defense Lloyd Austin met with their Indian counterparts and engaged on a host of issues including a diplomatic dispute between India and Canada over the alleged assassination by Indian forces of a Sikh separatist on Canadian soil, and increased hostilities on the border of India and China.
Blinken’s tête-à-têtes came on the heels of the G7 summit in Tokyo on Nov. 7 and 8, where Japanese and British defense ministers reiterated their preference for a two-state solution in the Middle East. The G7 later issued a joint statement that also condemned “destabilizing activities” by Iran and called on Tehran to de-escalate tensions in the region.
Blinken’s tour comes ahead of the first meeting between US President Joe Biden and Chinese President Xi Jinping in over a year, set for this week in San Francisco. While significant, expectations for agreement and action are low. “We’re not talking about a long list of outcomes or deliverables,” a senior administration official told reporters at a press conference last week. “The goals here really are about managing the competition, preventing the downside risk of conflict, and ensuring channels of communication are open.”
The two leaders’ agenda includes military communications, human rights, and the South China Sea. According to Eurasia Group Analyst Anna Ashton, much of the focus will be on Taiwan's presidential election, set for Jan. 13. “The candidate most likely to win based on current polling is Lai Ching-te, a member of the Democratic Progressive Party who draws support from Taiwan's most dedicated independence activists. That brings us to a second watchpoint in May, when Taiwan’s next president will be inaugurated,” says Ashton. And to another potential flashpoint for tensions between China and the US.
FILE PHOTO: Philippine Navy welcomes the arrival of Japanese Maritime Self-Defence Force ship for a two-day goodwill visit upon its arrival at the South Harbor in Metro Manila, Philippines April 26, 2018.
Japan looks south to bolster its security
Japanese Prime Minister Fumio Kishida is in Manila Friday for a summit with Philippines President Ferdinand Marcos Jr. as Tokyo attempts to draw closer to partners in Southeast Asia to hedge against China.
Tokyo already has extensive economic and diplomatic ties to the Philippines, and has strategically cultivated strong relations in Southeast Asia since the late 1970s. However, during this visit, along with a stop in Malaysia this weekend, Kishida hopes to deepen military ties, opening up Japanese defense exports to both countries, and setting up cross-training programs.
Adding a military dimension is an important change for Tokyo. In the wake of World War II, instead of a collective security strategy à la NATO, the United States pursued a “hub and spoke” system in Asia. Countries like Japan, South Korea, and the Philippines were all allies of the US, but not of one another, in part to maximize US leverage but also because each country faced diverging threats. What concerned Manila in the 1950s wasn’t necessarily an issue for Tokyo.
Now there’s one problem everyone in the region cares about: the Chinese military. Tokyo is well aware it can no longer rely on technological superiority to protect itself from China — nor can Washington. What it can do is fall back on those longstanding ties and give a boost to partners in Southeast Asia, says Eurasia Group’s Japan Director David Boling.
“Kishida’s visit to the Philippines to strengthen defense cooperation is Japan’s way of reminding China of this: You may be bigger than we are, but we have more friends than you do,” he said.
Pro-Palestine protesters march in London.
Hard Numbers: Pro-Palestinian protests rock London, Machado prevails in Venezuela, drone shortage woes, Madagascan opposition, joint aerial exercise with Asian allies, a great Great Lake discovery
100,000: In London, 100,000 protesters chanted “Stop bombing Gaza” and waved Palestinian flags as they marched from Hyde Park to Whitehall on Saturday. Officials asked Brits to be mindful of the Jewish community, with Metropolitan Police reporting a 13-fold uptick in reports of antisemitic offenses this month compared to last year.
93: Industrial engineer Maria Corina Machado declared victory in the opposition's presidential primary in Venezuela late Sunday. With 26% of ballots counted, she had 93% of the vote. The question now is whether Nicolás Maduro will allow Machado — who's been officially banned from running for office — to challenge him in the 2024 presidential election.
10,000: Ukraine loses 10,000 drones a month in its war with Russia and is now facing a shortage of parts due to export restrictions by China. Concerns about the impact on Ukrainian defense capabilities have prompted a search for alternatives made elsewhere, including by domestic startups.
50,000: Madagascar’s opposition parties held a rally with 50,000 people to protest what they call an “illegitimate” election process ahead of general elections in November. Last month, the country’s constitutional court dismissed appeals to have President Andry Rajoelina’s candidacy declared void over his dual French nationality, angering opposition politicians who say voters do not want “foreigners” running the country.
1: South Korea, the United States, and Japan have held their first joint aerial exercise in the face of an escalating North Korean nuclear threat and a recent visit by Russian Foreign Minister Sergei Lavrov to Pyongyang. South Korea and Japan host 80,000 American troops and are key American allies in the region.
128: A documentary about the invasive quagga mussel’s impact on the Great Lakes led to the discovery of a 128-year-old shipwreck. Filmmakers came across the Africa, a steamship that went missing in October 1895 while carrying coal from Ohio to Ontario, on the bottom of Lake Huron.