Bloomberg Audio Studios, podcasts, radio news. This past weekend, the Asia Pacific Economic Cooperation Summit, better known as APEX, wrapped up in Kyoungju, South Korea. The annual gathering, which began as a way to promote free trade and cooperation across Asia Pacific, was largely overshadowed by ongoing trade tensions between its two biggest member economies, the US and China.
I think going into this we had a distinct impression that this was going to be the Trump show, even though he actually didn't intend to actually go to the meetings at all.
Adam Fair is Bloomberg's senior geoeconomics analyst for Asia Pacific.
His meetings occurred before the official summit began, and yet his presence and US policy kind of loomed large over the entire meeting. Despite President Ches's opportunity, which he did take advantage of to kind of rian placed China at the center of a more stable global trade arrangement, President Trump and the United States and the tariff conversation kind of remained at the center of all discussions.
During his five day tour of Asia, President Trump stopped in Malaysia and Japan, before a World Win one day visit to South Korea. He held several high profile bilateral meetings, including a summit with President She. So many right the whole, so many meetings great for our country with literally hundreds
of billions trillions of dollars come into a country. As Air Force one lifted off from the city of Busan, the sleek Hong Chi limo carrying President She rolled in and with Trump gone, she stepped into the spotlight.
President She being there the whole time.
The fact that China will host the next APEC summit gave him an opportunity to kind of continue to hammer the message that China is the more stable and better partner for countries looking for clear economic gains in the near future, and that unlike the United States, they will follow through their commitments. They can be seen as reliable.
This is the Big Take Asia from Bloomberg News. I'm Wanha. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons and businesses that drive this ever shifting region. Today, on the show Beyond the Trump, she spotlight what got overshadowed at APEX and as countries try to balance open trade with national security. How are they navigating rising tensions between the
world's two largest economies without picking sides. The Trump she meeting last week dominated headlines and overshadowed the APEC summit that followed. Bloomberg's Adam Ferrer says, it's a reflection of a broader shift in how these multilateral forums are perceived.
The reality is that APEC and these other large multilateral forums, I think of the G twenty as well, have been losing significance as a major mover of policy. And that's not just a symptem of the Trump administration. It's been happening for the better part of the past decade, as we've seen divergence in the objectives and policy goals of the largest participants.
APEC has nearly four decades of history. It's twenty one member economies span the Pacific Rim and include global powerhouses like the US, China, Japan, and Australia. Together, they account for nearly sixty percent of global GDP and half of world trade. And while apex's founding mission breaking down trade barriers and promoting economic cooperation is increasingly challenged, Adam says the forum still plays an important role.
The value seems to really be in the convening function, right, bringing together leaders from a very diverse set of economic powers and providing an avenue for them to engage with key market leaders in business as well, that you don't get to do every day, and particularly for some of
the smaller economies, there's nothing like it. APEX also unique in that Taiwan, as a major economy, is invited, and while it is not represented at a leader level, it is there and has the opportunity to hold many bilateral meetings with senior officials and leaders across the world, which is incredibly important for it.
During his Asia tour, President Trump struck a warm tone with US allies and partners. He danced with performers at a welcome ceremony in Malaysia and wrapped his arm around Japan's Prime Minister Senai Takichi during his speech. That was a stark contrast to months of tariff threats, rusing trade battles and America First rhetoric.
I think there's deep scars with many US allies, and that includes NATO, that includes Japan and Korea with how they've been treated in this trade war. Korea is a good example, Korea maintained not only an alliance with the United States, but a free trade agreement with the United States, and what they found when they entered these negotiations with
the White House was that was worth basically nothing. But at the same time, now sitting here after APEC, after President Trump and President ejmy Jung sat down and actually agreed to finalize their trade agreement, you do land in a slightly different place than I think we expected, which is that President Trump has actually elevated Korea and Japan and the EU to some extent as preferred partners in trade.
But not only just in trade, but in terms of bringing the key industries and investment into the United States that's necessary for his vision of reindustrializing and bringing manufacturing back in those key industries that are going to determine the future for the United States.
It wasn't that long ago, just in September, really, when the US raided a Hyunda plant in Georgia and they detained hundreds of CREA nationals. It was a deeply embarrassing episode for Korea. Then, of course Trump was in Korea making nice. What kind of messaging does that send to other Asian countries.
So the raid at the Hyndei facility, I think caught everyone off guard, and particularly those in Soul in regard to how they would be treated by the United States, and not only just how their nationals would be treated, but how the individuals they are sending to the United States session do the work to build out these massive investments.
The fact that even they are not immune from the other priorities of the administration, which is to push back on immigration or a legal immigration as they see it, you know, it raised real questions about what the intent is that the United States and what their willingness is
to actually prioritize these partnerships. And so while I think Trump's demeanor and approach to partners and allies on this series of meetings certainly is helpful to address the problem and remind them that the US does see them as important, it certainly doesn't solve it.
Then there's Trump's decision to skip the APEX summit altogether and meet with key Asian leaders one on one instead. Adam says it may not be a deliberate snub, but the message it sent was clear.
I think the staff would say that folks should be very happy that Trump showed up at all, and that his arrival in South Korea, the fact that actually he also went to Malaysia some element of the East Asia Summit were a better than expected deliverable from President Trump in terms of his willingness to travel a very long way, and it is having just done those flights.
It is a very long way to meet with leaders.
But I think the reality is it does align very well with how Trump has been approaching his engagements globally, both in the White House and abroad.
Is his objectives come first.
Now, Adam, you've served across both of Biden and Trump administrations, how would you characterize the US economic and diplomatic strategy here in Asia. I mean, it seems as if it's changing the region and diplomacy and relationships dramatically.
Well, the last part is certainly true. I think it is helpful though, to remind ourselves that trade has been an increasingly complicated issue for US efforts and diplomatic efforts in the Indo Pacific. And that's not new to the Trump administration, even in the Biden administration, which set out a very clear policy objective in the New Pacific, basically putting allies and partners first, seeking to compete with China
where it was necessary, but cooperate where possible. Even there because of the kind of this shifting and growing economic nationalism that we saw in the United States and across the globe, Biden administration was unable to move forward with any substantive trade agenda. Throughout all four years of its administration.
There were efforts, lots of efforts from countries in the region to try and convince the United States to rejoin the Transpecific Partnership, a trading agree that had actually been built very much by the Obama administration, but that was completely off the table. The big difference though, that we
see this time around with President Trump. He views the entire world and this key part of the world through one lens and one lens alone, and that is trade, and not only trade overall, but really through trade balance, right, and only goods, not goods and services, where the United States is far more competitive. And so with that he's kind of put aside the history, both good and bad, with countries.
In the region.
And as he said multiple times, he asked them for their best offer. Right, give me your best offer, and we will send back a deal for you. To sign
and that's been his approach. And in some ways that's understandable for some leaders in the region who kind of get the desire for the United States to take a more nationalistic approach similar to some of them, But at the same time, it's antithetical to how the United States has approached its alliance relationships in the region for the past decade, where it saw a broader strategic importance to the relationship even when there were maybe negative or unequal
parts of the relationship, potentially on trade and on economics.
After the break with Trump gone, China steps in. How are smaller economies responding and what is China's growing influence mean for the region's future. That's next Donald Trump back in DC.
It's she's imping stage right now.
He's going to be meeting with Mark Karni of Canada, meeting with Sanai Takaiji of Japan.
He'll be giving a speech over the weekend. President. She took center stage at the APEX summit, appearing in nearly every photo and headline. After holding talks with regional leaders and delivering a speech calling for stables, supply chains, and open trade. She arrived at the welcome dinner shoulder to shoulder with South Korean President Eugenie, ladies and gentlemen, the leaders and spouses on the twenty one AID pack Nember Economy.
The display of camaraderie was part of She's effort to position himself as a champion of free trade and regional cooperation. Bloomberg's Adam Ferrer says this comes in the wake of Trump's latest trade war, which is hit manufacturing economies like Vietnam, Malaysia, and Indonesia that rely heavily on the US market. But China's pitch isn't without its own complications.
While China, I think, has made hay of this situation, has tried to demonstrate themselves, as we've talked about already, as a more stable and reliable partner, they also come
with a huge amount of baggage to start with. Right we saw recently with these threats on export controls that China is also willing to take extreme actions, extra territorial action to try and limit the flow of goods that they don't want moving to any individual company or country, depending on their own interests and their ability to leverage that if they want, And that's a real threat for countries and companies that produce electronics around the world, and
particularly in Southeast Asia. Simultaneously, China's manufacturing power and the size of their exports are a real threat to domestic industry throughout the region, not only prior to this trade war, but now with the United States erecting this trade wall, we are seeing the diversion of goods, and while we can't be certain that it is all diversion, export figures from China in the last quarter showed a twenty seven percent drop in exports to the United States, but somehow
still an eight percent increase in exports overall, and that means much more goods are flowing to Europe, Southeast Asia, Africa, and for that to be pulled into the market, someone else has to lose. And so the question becomes how long can that go on before these local markets have to put up their own trade barriers to try and limit China's role and access to the region.
And I think to that point, many APEC countries are caught between this need to maintain open trade and also feeling the pressure to safeguard national security. How do you see countries like South Korea, like Vietnam, or Australia navigating these tensions, especially as they try to avoid choosing sides right between the US and China.
To start with, I think there is deep confusion among leaders around the world, and particularly the Asia Pacific, about what US priorities on national security really are right now. What is the US policy towards China, What is the US policy in the Indo Pacific. We don't even have the formal policy documents yet, right we don't have the National Security Strategy or the National Defense Strategy, which gives some hints of what the United States is trying to do.
Because at the end of the day, it really seems that President Trump is viewing the world through the same lens. It's not Asia first, it's trade first, and it's his version of trade. And so with that, we've seen big changes on this question of national security, particularly when it
comes to things like export controls. These are tools that were put in place to restrict the flow of advanced technology, particularly to China, under the guides of national security and therefore, in principle, as the United States had said in the first trun administration and did say in the Biden administration, they're non negotiable, right These are things that the United States has to do for its own defense, and that it expects partners and allies to do if they wish
to be part of the broader US tech ecosystem. But here in the trade negotiations with China, we saw the United States theoretically willing to back away from entity listings and lots of conversations at senior levels over the past several months about not moving forward with new export controls to limit damage in the broader trade relationship.
She held mylateral meetings with Japan's new leaders in Iakichi and Kennedy's Prime minister. What do you think China was trying to signal through these engagements?
So at the top line, I think China saw an opportunity again to demonstrate that it is a more stable and different type of partner than the United States is presenting itself as now in twenty twenty five. But that said, I think particularly Canada and Japan, each one is unique
in their bilateral relationship. President she did actually meet with Prime Minister Ishiba last year at APEC, and this year we had this unique opportunity of Takaichi, the new Japanese Prime Minister, having just been sworn in, and so meeting with her was not unusual, And the fact is that it was an incredibly frosty meeting from all observations, and I think we didn't see any signs that the relationship is moving in a particularly new or positive direction between
the two and the messaging from She and Takaichi seemed to demonstrate that, with She kind of emphasizing that Japan needed to take the correct approach to dealing with China to recognize their power and interests, and Takaichi, who is seen as a hardline conservative, not sounding off in that direction, but in fact defending Japan's interests while understanding that China remains a major economic power and a major economic partner
for Japan. On Canada, their relationship with China has been incredibly fraught now going back to twenty seventeen twenty eighteen, and so Mark Karney presents a new opportunity for China to reset relations with Ottawa, and so I think that's what we saw there.
But he's got a really big task ahead of him.
The United States makes up more than sixty percent of overall trade for Canada, and even if he were to double trade with China, or triple shade with China, you'd still be overly reliant in the United States and be held in that domain, and so US interests, particularly security interests, could really undermine that relationship.
President Trump wrapped up his Asia tour with a one year trade truce with China. Under the deal, Beijing will suspend new export controls on rare earth elements, resume purchases of US soybeans, and work harder to curb the flow of fentanyl into the US. In return, Washington will reduce tariffs on Chinese goods and delay as sanctions plan that
would have hit more Chinese companies. With the Trump she spectacle at APEX still fresh, I asked Adam what he'll be watching to gauge the real impact of this truce and what it means for regional stability.
I think one of them is whether the Chinese will live up to the deal. And one of the big issues there is purchases of US agricultural goods. If we look back to Trump's first term, Trump actually signed a very similar deal with China under the Phase one Trade Agreement that called for China to make huge purchases of
US agriculture and energy. Two again to try and offset this trade and balance, and due to a variety of factors, one of which very much being COVID, China didn't live up to those purchases.
We also really need to look.
Out as to what the United States is saying and doing related to Taiwan. Chi Jimping and the Chinese system have made very clear that Taiwan is not the only part of China, and more importantly, that the issue itself is not negotiable. And so the question becomes where the United States actually does continue down the trend that they have right now, where they have quietly supposedly delayed arm shipments potentially stopped present Live from entering the United States
for a transit on his way to another meeting. Whether we see that kind of new approach which would worry very much Typeay, or we see the United States return to more traditional approach of supporting TYPEY militarily and speaking up in defensive type pay, which could anger Beijing and lead to a re escalation in the trade and conflict.
This is the Big Take Asia from Bloomberg News. I'm wanha to get more from the Big Take and unlimited access to all of Bloomberg Dot com Subscribe today at Bloomberg dot com Slash podcast offer. If you liked the episode, make sure to subscribe and review The Big Take Asia wherever you listen to podcasts. It really helps people find the show. Thanks for listening, See you next time.