America’s Asian Balancing Act

The US President just completed his three nations - Malaysia, Japan and South Korea, East Asian tour (October 26-30), where he met leaders from the Association of SouthEast Asian Nations (ASEAN) and the Asia Pacific Economic Cooperation (APEC) bloc. Malaysia hosted the 47th ASEAN Summit, and South Korea played host for the APEC 2025 Korea. ASEAN comprises 11 core member nations from South East Asia, and ASEAN+6 has free trade agreements with India, China, Japan, South Korea, Australia and New Zealand –the six major economies of the Asia Pacific region. The Asia-Pacific Economic Cooperation (APEC) has 21 members, namely, Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Chinese Taipei, Thailand, the United States, and Vietnam, that represent more than 50 per cent of global GDP and are home to about 2.7 billion people. APEC defines membership as “economic entities” rather than “sovereign states,” allowing China, Taiwan, and Hong Kong to join simultaneously in 1991. However, Taiwan participates under the name “Chinese Taipei,” and Hong Kong, after its return to Chinese sovereignty in 1997, uses “Hong Kong, China.”

Significance of Trump’s East Asia tour

Both APEC and ASEAN+5 (RCEP) member nations of the Asia Pacific region are important trading partners of the USA. Table 1 reveals that, except for Australia, the USA runs huge trade deficits with ASEAN, China, Japan, South Korea, and Taiwan. Again with India, which is not part of APEC and RCEP (ASEAN+5), the USA has a substantial trade deficit. Considering the importance of these Asia Pacific economies to the USA, Trump should have visited this region much earlier.

Trump’s East Asia tour is significant as the US president faces mounting criticism –both at home and abroad, due to his clumsy and incoherent ways of handling major issues. Recently, he threatened to nearly triple tariffs on Chinese imports on November 1 unless China reaches a new trade deal with the USA. China also enacted retaliatory taxes, which have halted key U.S. imports like soybeans and restricted the sale of rare earth minerals to the United States. Moreover, the USA’s two trusted allies, Japan and South Korea, were also not happy with Trump’s tariff war and immigration policy. Relations with South Korea turned bitter when in September 2025, U.S. federal officials conducted a major immigration enforcement raid at a Hyundai-LG electric vehicle battery plant construction site in Georgia, leading to the detention of approximately 475 workers, over 300 of whom were South Korean nationals. According to U.S. immigration officials, the largest single-site enforcement operation in the U.S. Department of Homeland Security’s (DHS) history, reports Reuters. The incident sparked a diplomatic dispute, with the South Korean government expressing “concern and regret” and demanding that the rights of its nationals and investors be respected. The U.S. government shutdown stretches into a fourth week with no end in sight. The shutdown could cost the economy up to $14 billion, depending on how long it lasts, the Congressional Budget Office warned on Wednesday (October 29). Trump badly needed a face-saving deal with China and two of its allies-South Korea and Japan.

ASEAN leaders invited the US President, as most ASEAN states want to have good relations with both the United States and China and are frustrated with US President Trump’s aggressive actions. Moreover, after the formation of China initiated Regional Comprehensive Economic Partnership (RCEP) which is actually a bloc of ASEAN+5 nations, as many analysts are questioning the relevance of original ASEAN, Trump’s presence has helped the bloc to retain its core policy of ‘ASEAN Centrality’- which refers to the idea that ASEAN has or should have a central role in forming the political and economic institutional architecture of a wider Asia Pacific region. As the Indo-Pacific has entered into a new era of turbulence due to China’s increasing assertiveness and economic power, ASEAN leaders wanted Trump’s presence in their 47th Summit to insulate its members from great power pressure. Historically ASEAN bloc tries to hedge its autonomy by engaging both Washington and Beijing, and even participating in both US and China-led naval exercises, underscoring its determination to avoid choosing sides in the deepening US-China rivalry.

Outcome of the tour

Trump has presided over the signing of a ceasefire between Thailand and Cambodia. Trump co-signed the ceasefire on Sunday with his Malaysian, Thai and Cambodian counterparts on the sidelines of the Association of Southeast Asian Nations (ASEAN) summit in Kuala Lumpur. This will certainly boost his chances for a Nobel Peace Prize nomination in 2026. After the ceremony, Thailand’s foreign minister refused to call it a peace agreement, telling the BBC, “I would call it a pathway to peace” instead.

The newly elected Prime Minister Sanai Takaichi detailed $550bn in Japanese investments in the US and offered the American president a gift of 250 cherry trees for America’s 250th birthday. She also became the latest foreign leader to nominate Trump for his much-desired Nobel Peace Prize.

South Korean President Lee Jae Myung held an “honour ceremony” for Trump during which he gave the American leader his nation’s highest medal and a replica of an ancient Korean dynastic crown. South Korea agreed to invest $200bn in the USA, $20bn a year, to be invested at the direction of Trump’s government. Agreement on the terms of those payments ensured that the tariff rate on South Korean exports to the US would drop from 25 per cent to 15 per cent.

A landmark meeting after a gap of six years, between Chinese leader Xi Jinping and US President Donald Trump on the sidelines of the APEC Summit on Thursday appears to have made major strides to resolve frictions in the volatile relationship between the world’s two largest economies and rival superpowers. The two leaders had agreed on “almost everything” and reached a trade deal that could be signed “pretty soon,” Trump told reporters. Xi also pointed to the “consensus” reached on resolving “important economic and trade issues” and called on the two sides to “refine and finalise follow-up work as soon as possible, uphold and implement the consensus, and deliver tangible results. “Economic and trade relations should continue to be the ballast and engine of Sino-US relations, not a stumbling block or point of conflict,” the Chinese leader said, reports CNN.

According to Trump, overall tariffs on Chinese goods would drop by 10 per cent. China said it will make “corresponding adjustments” to its trade war countermeasures, including pausing its new curbs on rare earth exports for one year. Nonetheless, before the meeting in the southern city of Busan, Trump announced that he instructed the Department of Defence to “immediately” begin testing nuclear weapons on an “equal basis,” in apparent response to advanced weapons testing by rival countries, including China and Russia.

U.S. President Trump left the APEC venue on September 30 after his much-awaited meeting with the Chinese President. As Trump skips APEC, China’s Xi fills the void with a message on multilateralism contrasting Trump’s America First policies. On Friday (October 31), in his opening remarks to the forum, Xi called for unity and cooperation between the grouping of 21 economies on both sides of the Pacific. During the two-day APEC summit, Xi will hold high-profile meetings with global leaders, including South Korea’s President Lee Jae Myung, Japan’s new leader Sanae Takaichi and Canada’s Mark Carney. Beijing has positioned itself as the defender of free trade as Washington’s tariff hikes disrupt the global economy. China’s President Xi Jinping has called for maintaining supply chain stability in the opening session of the Asia-Pacific Economic Cooperation (APEC) summit in Gyeongju.

For Chinese leader Xi Jinping, a landmark meeting with Donald Trump was a moment to showcase something Beijing has long sought. The US president’s trade war against China has given Beijing the unintended gift of a bright spotlight under which to flex its economic strength. At the APEC Summit, where Xi and Trump met, a message was loudly conveyed to the world that ‘China will negotiate, but it won’t be cowed’.

Where India stands

Speaking at the APEC CEO Summit, Trump called Modi the ‘nicest-looking guy’ and recalled his initiative to stop the Indian-Pakistan conflict. He said that he had read that “seven planes were shot down” and offered trade deals to both nuclear-powered countries. He also added that he threatened India and Pakistan with 250 per cent tariffs to help spur the resolution of their conflict earlier this year. “I warned of the tariffs. I said I’m going to put 250 per cent tariffs on each country [if you don’t stop the war], which means that you’ll never do business.”

India suffers from a trade deficit with all the prominent members of ASEAN+5 (RCEP), except New Zealand, with which it has a marginal trade surplus. Trade deficits with ASEAN, South Korea, and Japan, with whom India has enjoyed free trade agreements for over a decade, are also substantial. India imports nearly 25 per cent of its total imports, and exports less than 10 per cent of its total exports to the ASEAN+5 (RCEP) bloc. India’s trade deficit of $179.2 billion with this bloc is nearly double the country’s total trade deficit of $94.41billion in 2024-25.

The Indian Prime Minister should have attended the ASEAN Summit and utilised that platform to meet US President Trump and other ASEAN leaders to improve India’s trade relations with these major economies. Unfortunately, trade data indicate, India has failed to leverage on trade agreements the nation has entered into with its trading partners. In all the cases (refer to Table 2), India ended up as a loser, not a gainer.