Amid that war, US President Donald Trump’s imposition of punitive tariffs on American friends and foes alike represents a tactical retreat in the face of China’s advance. The Chinese benefit from the discomfiture of those countries that were inclined to believe till now that America is the only direction in which globalisation can travel. No economic decoupling has occurred between America and China, but it is abundantly clear that they are now gladiatorial rivals in the global market, adversaries which are no longer on the same side of history.
To put it in market terms, America is no longer the price-setter in international relations and China is no longer a price-taker. Yet, China is far from being the price-setter itself and America is in no mood to become a price-taker. All third countries are caught in this transitional struggle, and the 11 nations of Southeast Asia are no exception, as this year has proved.
The good news this year is that the world remains a single market, unlike the Cold War era, when it was divided between the contending political markets of the capitalist US and the socialist Soviet Union. The bad news is that even today’s single global market is in the midst of a vicious turf war in which the disruption of international supply chains signals the economic impact of the strategic rivalry between Washington and Beijing.
