Regardless of who wins the 2024 election, international trade will be impacted and U.S. foreign policy will be “transactional,” says Steven Okun, senior adviser at McLarty Associates.
“As my friend, Bilahari [Kausikan], a former Singaporean diplomat says, ‘Under the Biden administration, it’s a polite transactionalism. Under the Trump administration. It’s an in-your-face transactionalism.'”
Okun spoke to NPF’s International Trade Fellows about what outcomes the U.S. election may have.
‘Whoever wins, we’re going to have new and more protectionism’
“There will be more bans. There will be more export controls. There will be more tariffs,” Okun said. The difference is in their approach.
The Biden administration has a lattice policy, trying to make things stronger, especially when it comes to Asia, he said. Japan’s Prime Minister Fumio Kishida visit to Washington is an example of the lattice approach where the U.S. is trying to align with Japan from an economic, militaristic and diplomatic perspective. Okun suggests that Japan may join the AUKUS, which is the Australia, UK, US agreement on nuclear subs.
Trump’s “transactional isolationism” will focus on decoupling the U.S. from foreign trade. “Donald Trump has said, ‘If South Korea doesn’t pay more to support U.S. troops to deter Kim Jong Un, then we should withdraw. Why would we defend somebody?’ And we’re talking about a very wealthy country. So very different than a lattice approach.”
Okun says that despite this there are still huge opportunities in Asia — specifically, the opportunity to diversify out of China.
“But this is going to take a long time. Chinese production capabilities are going to be very tough to replicate. The diverse economies of Asia do not work well together despite ASEAN, despite CPTPP, despite RCEP, very difficult to make a system out of everything outside of China that you have in China, so China is going to be essential for supply chains for a long period of time. And the more US-China tensions make that harder and harder, it is going to be much more difficult for businesses and trade to deal with.”
‘Trans-shipments will be a major focus’ for Trump or Biden
While ASEAN is benefitting from the U.S.-China tensions, with a lot of the supply chain shifting from China to Southeast Asia, there’s more trans-shipments occurring. For example, a product manufactured in China, being sent to Vietnam and then to the U.S., as if it came from Vietnam.
“The U.S. does not want to see that the tariffs that they’re putting in place, that there’s workarounds. The U.S. does not want to see that the restrictions they’ve put on, for example, through the Uyghur Force Labor Protection Act for human rights violations, just have workarounds.”
Sustainability is also a big topic of the election, Okun said. The Biden administration has taken aggressive actions, especially through the use of subsidies when it comes to addressing the climate crisis, he said.
“What is Donald Trump’s view on climate? What’s his view on renewables? ‘I hate wind.’… We are going to have very different approaches on climate, especially when it comes to renewables, wind, EVs, between Biden and Trump.”
Who will succeed?
The United States has become so polarized and so hyper-partisan that Okun says we’re now down to seven states, or even four, that will make the difference in the electoral vote count. Okun noted that the election was decided by 73,000 votes in three states in 2016 and 43,000 votes in three states in 2020. This year could be even more razor thin, enough so that a third party candidate – or even an endorsement from Taylor Swift – may sway the election, Okun posited.
“Most people in Asia think Donald Trump is going to win. … It’s really, really going to be very close.”
Access the full transcript here.
*This fellowship is part of an ongoing program of journalism training and awards for trade coverage sponsored by the Hinrich Foundation. The National Press Foundation is solely responsible for the content. All programs are on the record and resources and transcripts from this and previous fellowships are published.
