Asia, brace for ‘Trumponomics’

By Ed Zhang, China Daily/ANN

HONG KONG — It took Asia by surprise. Now the United States is entering the Trump era. It’s time for Asia to grasp what it means, to brace itself for what’s next, and to plan for adapting for the possible changes. Already, the greenback has been on the rapid rise against most currencies in the world — drawn by not only the prospects of a steady increase in interest rates, but more importantly President-elect Donald Trump’s promise of growth. From Shanghai, Hong Kong, Singapore, New Delhi, and all other regional financial hubs, money is flowing to America in a ceaseless volume. One key promise of “Trumponomics” is to develop infrastructure and revitalize manufacturing. Accordingly, prices of production materials, most importantly petroleum, which Asian countries usually depend on and import, are likely to be high. This can be compared to a scenario that scares every family: The price of rice goes up right at a time when it is short of money — and when the wife is just about to give birth to a new baby — if people think about the government’s commitment to all the social programs for a growing population. Yes. As often is the case in the U.S., when GDP picks up, its people make more money and buy more things, including cheaper imports from Asia. But instabilities abound in Europe, another major market for Asia.

Throughout North America and Western Europe, many middle-class households would remain penny-wise rather than generous, as once they were. In the meantime, the Trump administration wouldn’t be happy if U.S. companies would leave all their manufacturing operations in Asia, despite the low prices the U.S. consumers can enjoy. Some companies are reportedly already looking for ways to ship some jobs home. No need to be a scare-monger. But Asians can tell the way the Americans do things. Whatever they do, they want to do it big and get quick results. Think about Trump’s job goal. He wants to create as many as 25 million jobs, according to what he said in his campaign.

What does the figure mean? It is nearly five times the manufacturing jobs that the U.S. lost from 2000 to 2016, due allegedly to free trade and foreign competition. Exactly how so many jobs will be created in America in such a short time is still not clear. But there can be no question as to what it means to this part of the world: no more jobs, or export orders, for Asia. Wilbur Ross (rumored to be the next U.S. trade representative) and Peter Navarro, two economic advisers to the Trump campaign, already wrote in The Wall Street Journal in October calling NAFTA in 1993, China’s entry into the WTO in 2001, and the FTA with South Korea in 2012 “three worst trade deals.”