Trump Shows Allies Not Shielded From `America First' Trade Moves

(Bloomberg) -- A long-standing security alliance is not enough to protect countries from U.S. President Donald Trump’s first big protectionist move.

The Trump administration’s decision to impose tariffs on imported solar panels and washing machines hit China, but also U.S. allies like South Korea, Thailand and the Philippines. All three have decades-old security treaties with the U.S., as well as stubborn trade surpluses.

The maneuvers could place new strains on relationships that have underpinned U.S. dominance of the region since World War Two. Thailand and the Philippines have already been seeking to improve ties with China, now Asia’s biggest economic power and a source of growing military clout.

The tariffs particularly put pressure on South Korean President Moon Jae-in, whom Trump needs to support his hard line against North Korea over its nuclear weapons program.

“It’s the geopolitical equivalent of cutting your nose off to spite your face,” said Ian Storey, a senior fellow at the ISEAS-Yusof Ishak Institute in Singapore. He said imposing punitive measures against such countries in Asia was “crazy.”

The tariffs mark Trump’s first major move in his pledge to cut the U.S. trade deficit and tackle what he calls unfair trading practices. His “America First” agenda saw the president withdraw the U.S. from a large Pacific trade pact during his first week in office, while the administration is in talks to rewrite the North American Free Trade Agreement.

It isn’t the first time Trump’s trade tactics have cropped up at a sensitive time for South Korea. The day after the U.S. president threatened to pull out of a bilateral free-trade agreement in September, North Korea detonated its most powerful nuclear bomb yet.

As with the ongoing negotiations over the U.S.-South Korea trade pact, the government in Seoul is pushing back. Trade Minister Kim Hyun-chong said Tuesday that South Korea will file a petition with the World Trade Organization against the U.S. for imposing anti-dumping duties on Korean washing machine and solar panel makers. It may discuss steps with other targeted countries, he said.

Davos Speech

The U.S. made the announcement before Trump heads to Davos this week to address the world’s business and financial elite. Last year the forum heard Chinese President Xi Jinping’s pledge to preserve the international system of trade rules and advocate for globalization.

Trump has long criticized some Asian nations for running trade surpluses with the U.S. He told executives at the Asia-Pacific Economic Cooperation summit in Vietnam in November the U.S. would only consider negotiating a bilateral deal with a partner who would “abide by the principle of fair and reciprocal trade."

“Trump is true to his words,” said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Bangkok’s Chulalongkorn University. “It is classical old-style protectionism, and it’s going to be a reminder for Thailand and other countries that Trump means business.”

Thitinan said it was unlikely the tariff move would prompt an immediate shift by Thailand toward China. But it will “continue a trend that we have seen in recent past that, once alienated from the U.S. or the West, Thailand tends to edge closer to China’s embrace.”

Any reaction could be tempered by goodwill Trump has earned with Asian leaders who were censured for their human rights record by predecessor Barack Obama. Trump has received the leaders of Thailand, Vietnam and Malaysia at the White House. When he met Philippine President Rodrigo Duterte in Manila in November, the subject of human rights wasn’t raised.

Still, Trump’s decision to impose tariffs may further undermine confidence in the U.S. as a strategic partner in Southeast Asia, a region that consumes more than $100 billion in U.S. exports each year and where America’s navy and air force often conduct military exercises.

In recent years some Asian leaders have questioned the U.S. commitment. Meanwhile China has poured money into Southeast Asia via trade and investment, while reclaiming land in the disputed South China Sea to build military structures.

Foreign ministry spokeswoman Hua Chunying said China was dissatisfied with the Trump administration’s tariffs. “We have also noticed that its allies and partners have reacted very strongly and actually many parties have expressed opposition,” Hua said at a regular briefing in Beijing.

“Against the backdrop of a massive collapse in confidence in America’s reliability, this protectionist measure is just going to exacerbate the situation,” said Richard Heydarian, a professor of political science at De La Salle University in Manila. “It is going to make Trump look like a beleaguered, troubled leader who is scrambling to appeal to his base at the expense of America’s global standing, which is in free fall.”

©2018 Bloomberg L.P.