Sunday, 14 Jul 2024

US, China must ensure trade war does not poison their wider relationship: PM Lee

SINGAPORE – The leaders of the United States and China have to work out how to resolve their trade disputes, and ensure ongoing tensions do not harm the broader relationship between them, Prime Minister Lee Hsien Loong said on Tuesday (Nov 6).

“The leaders of two countries need to decide what they want to do and if it cannot be worked out, then they really want to keep it from boiling over,” he said.

“They need to respond in a restrained way… and prevent it from poisoning all their other relationships. There are so many things to work together on, starting with North Korea,” he added.

PM Lee was responding to a question at a dinner dialogue at the Fullerton Bay Hotel for around 400 top business and thought leaders attending the Bloomberg New Economy Forum.

The trade war and its impact on Sino-US ties was a top concern at earlier sessions on the first day of the forum, as the tit-for-tat tariffs slapped on hundreds of billions of dollars of one another’s goods by the world’s two biggest economies, ostensibly triggered by the trade deficit the US has with China, has dampened business confidence globally.

At the dialogue, a delegate asked PM Lee what he would advise Chinese President Xi Jinping and United States President Donald Trump to do about the trade war if they were at the same table with him.

“I would be hesitant to be at such a table,” he said to laughter from the audience.

But he added: “The trade issues are genuine ones. The trade deficit is on top of Mr Trump’s mind but economists will tell you it’s a manifestation of other economic problems… like intellectual property.”

These are things that have to be worked out, and both sides had come close to a deal several times, but did not sign one in the end, he said.

At the session hosted by Bloomberg News’ editor-in-chief John Micklethwait, PM Lee was also asked what the new world order would look like, with the US taking a back seat in world affairs in recent years.

PM Lee said he did not see this move as a retreat but as the US “rethinking its role”, and one that applies more to the current Trump administration.

“Up till now, America was such a dominant player in the world economy that it felt it was in its interest to provide global public goods… The world has prospered greatly, and America with it,” he said.

But with its economic fortunes shifting – the US now makes up 20 per cent of the world’s economy, compared to half after World War Two – it is relooking whether it should put itself first.

“America is entitled to take such a position, but if you work like that it will be a very different global position. There is nobody to take on the role that the US hitherto played,” he said. If this persists, it would be “a different kind of world in which not only small countries feel uncomfortable,” he said.

“I hope it doesn’t go that way… And that depends on a multilateral global order, where there is some weight and authority and respect given to supranational institutions like the United Nations, the World Bank, the International Monetary Fund,” he added.

PM Lee was also asked questions about global rivalries spreading over and affecting relationships between countries in Singapore’s neighbourhood.

“Neighbours are never without complexities,” he said, adding that even the US and Canada have their issues. “This is what God gave us… We don’t choose our neighbours and we are blessed with two bigger than us,” he said, referring to Malaysia and Indonesia.

“There will always be issues that will come up, and we will deal with them in a way that is win-win,” he added.

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