Concede or resist? Neither, as the world moves on from Trump's tariff tantrum

Rather than adapt or align, countries are attempting to mitigate the full effects of the US shock.

- Danny Quah

US President Donald Trump's historic tariffs have come into force over the past month, forcing countries to consider their strategic options.

For all the talk of dealing with a second China shock, countries have to face yet another challenge—that of the US shock.

Small states around the world are responding by drawing on three broad strategies: alignment, adaptation and mitigation. Many are now beginning to choose the last.

ALIGNMENT AND ADAPTATION ARE POOR STRATEGIES

Alignment has historically been the go-to strategy, right from early days when Singapore and much of the rest of South-east Asia were drawn into the Cold War and segueing from that into the Vietnam conflict.

The US was always on one end, with the opposing side a rotating set of other nations. Today, US-China rivalry has alignment bundling together trade, technology and security benefits.

Now, as before, alignment can end up leaving us little room for independent decision-making.

Adaptation is a second reactive option: taking as given the behaviour of great powers, meekly giving in and adjusting as allowed. Under the second Trump administration, nations wanting continued access to the US market conceded to tariffs and other trade conditions.

Vietnam negotiated its 46 per cent tariffs down to 20 per cent, but at the cost of new avenues of trade and investment for the US. After negotiation, US tariff rates on Indonesia came down too but that required committing to significant purchases of US energy and aircraft.