Monday, 30 Mar 2020

Asian Insider May 31: What tariffs on Mexico mean for the US-China trade war

More US tariffs: When you have a hammer, every problem looks like a nail

US President Donald Trump sent shockwaves through the markets and industry when he made what is becoming an increasingly common pronouncement: he is imposing tariffs on a country until he gets what he wants. In this case, the country in question is Mexico and what he wants is for Mexico to remedy the illegal immigration problem. No specific benchmark was laid out for what a successful remedy looks like.

The details: A statement from the White House said that the US would impose a 5 per cent tariff on all goods coming in from Mexico on June 10. With the rate then rising to 10 per cent on July 1 and then a further 5 per cent every following month the immigration problem is not fixed – topping out at 25 per cent on Oct 1.

The impact on the US-China trade deal:  Already difficult negotiations were made even harder by this move. After all, Mexico has already successfully negotiated a deal with the US to update the North American Free Trade Agreement. Observers say the inevitable message is that Trump is an unreliable negotiating partner. What good is spending political capital and making concessions to reach a deal if the president just wakes up one day and decides to impose tariffs anyway. Mexico made concessions and is facing the same fate as China. Expect the Chinese to be ever more circumspect moving forward.

Latest reports on the trade war:

ST EXCLUSIVE: Will HK become battlefield for growing US-China conflict?

Trump to impose 5% tariff on Mexican imports over illegal immigration

US weaponry may be hit if China tightens its grip on rare earths

Ex-China central bank chief says progress at Xi-Trump Japan meet ‘difficult’

Mexico tariffs make China-US deal less likely, analysts say

North Korea executed officials for failed Trump-Kim summit in Hanoi

North Korea has reportedly executed five officials who carried out working-level negotiations for the failed second Trump-Kim summit in Hanoi, charging them with “spying for the United States for poorly reporting on the negotiations without properly grasping US intentions”. Several others were spared execution but sent to a labour and re-education camp.

The scapegoats:  South Korean newspaper Chosun Ilbo reported that North Korea’s special envoy to the US Kim Hyok Chol and four unnamed foreign ministry officials were executed. Those sent to the camp for political prisoners includeIt also said Mr Kim Yong Chol, Kim Jong Un’s right hand man before the summit; Mr Kim Song Hye, who led preparations as part of Kim Yong Chol’s team; and Ms Shin Hye Yong, an interpreter. Ms Shin is accused of making critical interpretation mistakes, including missing an unspecified last-minute offer Kim Jong Un supposedly made as Trump was about to walk out.

The full story: North Korea’s Kim Jong Un executed officials after failed Hanoi summi

A showdown over exported waste

The Philippines today shipped some 69 containers containing some 2,500 tonnes of household waste back to Canada, removing a thorn that has been in the side bilateral ties between both countries for years. Canada paid the approximately US$190,000 cost of shipping the trash.

The background:   The row between the two countries centred on 103 containers of garbage falsely declared as recyclable plastic scrap shipped in batches in from Canada to the Philippines in 2013 and 2014. In the intervening six years, 34 containers were disposed off but a dispute over the remaining containers prompted Manila to withdraw its envoys from Ottawa this year.

The big picture:  This isn’t just a Philippines-Canada thing and there are concerns in Manila that garbage will continue to arrive. For years, China had been the destination for the bulk of the world’s scrap plastic but decided last year to ban all foreign refuse. That meant huge quantities of waste plastic have been redirected to other countries, especially in South-east Asia. All are now pushing back against becoming the world’s garbage dump. Malaysia earlier announced it was shipping 450 tonnes of imported plastic waste back to its sources.

Go deeper:

Manila sends back thousands of tonnes of garbage to Canada

Return to sender: KL gets tough on illegal plastic waste import

Shangri-la Dialogue prelude: Commentaries on Asean, Sino-US ties and the South China Sea

In a few hours, Singapore Prime Minister Lee Hsien Loong will deliver the keynote address at this year’s Shangri-La Dialogue – opening one of the most anticipated editions of the annual forum in years.

This year’s dialogue comes at a time of heightened tensions between Washington and Beijing and will be the first edition in years to have the top ranking military official from both US and China. Chinese Defence Minister Wei Fenghe and US Acting Defence Secretary Patrick Shanahan will address plenary sessions on consecutive days and if previous forums are any guide, there might well be some fireworks.

We’ve gathered a series of commentaries from Asia watchers on a range of issues likely to be raised at the dialogue to set the scene for what’s to come.

Beijing moves to own the discourse at Shangri-La Dialogue by Alexander Neill, a Shangri-La Dialogue Senior Fellow for Asia-Pacific security at IISS-Asia

What China and Asean can do to maintain stability in South China Sea by Liu Lin, an associate research fellow with the War Studies College, PLA Academy of Military Sciences

Viewing Asia’s flashpoints and disputes through a different lens by Parag Khanna, managing partner of FutureMap Pte Ltd and author of the new book The Future Is Asian: Commerce, Conflict And Culture In The 21st Century

How South-east Asia can navigate Sino-US competition by Prashanth Parameswaran, a fellow with the Wilson Centre’s Asia Programme and a senior editor at The Diplomat Magazine

The Straits Times is the official media partner of the event. Get all the latest from the Shangri-La Dialogue 2019 at our special website for the event and look out for a special edition of the Asian Insider newsletter in your inbox this Sunday.

And finally, some light reading for your weekend – a court judgment

I thought we’d try something different for the final item today. Supreme Court judges in any country are not best known for having a sense of humour and certainly in supposedly strait-laced Singapore, few would expect any sort of levity while reading judgments from the Court. That is until Judge Choo Han Teck was asked to decide on a case of whether a woman could bring her dogs with her when moving into a house with her siblings. The 4-page judgment is filled with quotable lines from “The court is not a dog licencing authority” to “True misery is what we create for ourselves.” to my personal favourite, “I think that the dogs will probably be the most benign occupants in the House. It seems more likely that it is the human siblings who are going to tear each other apart”.

I am not one to recommend judgments as recreational reading, but this is an exception.

The full judgment is embedded here: Court is not where one goes to for permission to keep pets’: Judge on siblings’ dog dispute

Other developments:

Nirmala Sitharaman was appointed India’s first woman finance minister in almost five decades to steer the economy through a rocky patch of weak growth and mounting global risks. In a surprise move, Prime Minister Narendra Modi on Friday (May 31) picked Ms Sitharaman to succeed Arun Jaitley, who chose not to take an active role in the new government because of health reasons.

Hong Kong said it would make further amendments to scale back a proposed extradition law that has raised concerns over the city’s autonomy and risks undermining its status as an international trade hub.

The health of the wife of Indonesia’s former President Susilo Bambang Yudhoyono has taken a turn for the worse. Mrs Ani Yudhoyono, 66, is in the intensive care unit at the National University Hospital (NUH) in Singapore, said her son Agus Harimurti Yudhoyono on Thursday.

That’s a wrap for today. Thanks for reading.  Have a good weekend.

– Jeremy

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