Hit with tariffs, Asians look for better friends

Most nations are still negotiating in hopes of avoiding punitive import taxes. At the same time, they're looking for trading partners as a way around the United States, writes Lydia DePillis from Seoul

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For most countries that received President Donald Trump's letters last week threatening steep tariffs, especially the Asian nations with economies focused on supplying the United States, there are no obvious substitutes as a destination for their goods.

But they are doing their best to find them.

Business and political leaders around the world have been roundly baffled by the White House's imposition of new duties, even as governments shuttled envoys back and forth to Washington offering new purchases and pledges of reform. Trump is erecting new trade barriers and demanding deep concessions by Aug 1, claiming years of grievance because America buys more than it sells.

“Across the world, tools once used to generate growth are now wielded to pressure, isolate and contain,” Anwar Ibrahim, the prime minister of Malaysia, said at a gathering of Southeast Asian leaders on Wednesday. “As we navigate external pressures, we need to fortify our foundations. Trade among ourselves. Invest more in one another.”

There are already a few signs of such efforts. South Korea's new president, Lee Jae Myung, sent special envoys to Australia and Germany to discuss defence and trade issues, and plans on dispatching delegations to several others. Brazil and India announced plans to increase their bilateral trade by 70%, to $20 billion.

Indonesia says it is nearing a treaty with the European Union that would drop most tariffs on both sides to zero. And in Vietnam, which Trump said had accepted 20% tariffs on its goods headed to the United States before last week's letters, the deputy trade minister emphasised efforts to reduce her country's reliance on American consumers by leveraging other trade agreements.

“As more and more countries are feeling that it's more difficult to satisfy US demands, then their interest in working with others is going to intensify,” said Wendy Cutler, vice president at the Asia Society Policy Institute.