Visiting leaders invoke idea of agency as Trump 2.0 tariffs loom

Idea is that smaller economies can act to mitigate effects of great-power rivalry

- Clement Tan

Agency, agency, agency.

With Trump 2.0 tariffs lurking on the horizon, that was the common refrain invoked by several world leaders visiting Singapore this week, in asserting the idea that smaller economies have the power to act for themselves to mitigate the fragmenting effects of the rivalry among great powers such as China and the US.

In the Asia-Pacific, that could well mean increasing regional trade to ensure economic stability.

South-east Asia as a bloc is expected to be the world's fourth-largest economy after the US, China and India by the end of this decade.

"In the context of intense pressure on the global trading system, our region has agency," Mr Don Farrell, Australia's Minister for Trade and Tourism, said on Dec 2 in an address at the annual Next Step (Solutions To Economic Problems) Global Conference. It was organised by the Lee Kuan Yew School of Public Policy and Paterson Institute for International Economics.

"In 2025, it will be incumbent on those of us who understand the benefits of global trade rules to actively engage in support of the multilateral trading system with the World Trade Organisation at its core," he added.

Incoming US president Donald Trump has so far vowed to impose punitive tariffs on China, Canada and Mexico, and he promised more while on the campaign trail.

If he goes through with these measures, they may spur retaliatory moves, triggering a trade war. Growth could slow in China, and the reduction in demand would in turn hurt many other exporting countries in the Asia-Pacific.

"The way we manage our interests in the face of challenges involving great powers is only partly through direct dealing.

Much of the answer lies in approaching these challenges in regional terms," Ms Penny Wong, Australian Minister for Foreign Affairs, said on Dec 3 in a dialogue convened by geopolitical think-tank International Institute for Strategic Studies (IISS).