Trade in Southeast Asia under Trump

Southeast Asia appears vulnerable to Donald Trump's threat of universal tariffs and a renewed trade war with China. Five of the region's six largest economies run trade surpluses with the United States. According to Nikkei Asia, all is not lost for Southeast Asia. Exports and economic growth would take a hit in the short term, but the region can reap rewards from trade diversion and substitution and might even take a tougher stance against Chinese firms' anticompetitive practices.

Geopolitically neutral, the area saw an increase in gross trade with both China and the US between 2017 and 2020 during the first Trump presidency. Vietnam, Indonesia, Malaysia and Thailand won big as companies from China, Japan, South Korea, Taiwan and the US relocated from China or duplicated their manufacturing bases in Southeast Asia to avoid US tariffs. 

Here's what you need to know: 

What is Trump's tariff threat?

The objective of Trump's stated trade policy is to return manufacturing jobs to the US and disentangle its supply chains from China. Trump and his advisers view China's trade advantage as unfairly derived from currency manipulation, intellectual property theft and forced technology transfers. 

During his first term, Trump used executive powers to impose tariffs of up to 25% on US$250 billion worth of electronics, machinery and consumer goods imports from China. Beijing retaliated with similar measures against US agricultural, automotive and technology exports. 

Now, Trump has proposed a 60% duty on all Chinese goods entering the US and tariffs of up to 20% on imports from everywhere else. That would be done with a mix of executive and legislative tools.

How bad could it be for Southeast Asia? 

Nearly 40% of Cambodian exports go to US, the largest exposure in ASEAN, in terms of proportion of total exports, followed by Vietnam at 27.4% and Thailand at 17%, according to Oxford Economics, putting all three at particular risk. Thanavath Phonvichai, president of the University of the Thai Chamber of Commerce, said Thailand's economy might take a 160.5 billion baht ($4.6 billion) hit if Trump follows through on his promises.

Vietnam has the fourth-largest trade surplus in the world with the US The imbalance grew rapidly as Chinese, Taiwanese and South Korean firms used Vietnam to bypass Trump-era tariffs. Vietnam's fortunes could just as quickly turn, especially if the US continues to classify it as a "nonmarket economy," which tends to entail higher tariffs. 

Uncertainty about Trump's tariffs could prompt firms to pause or stop investment plans in Southeast Asia. US companies accounted for about half of the US$9.5 billion in fixed asset investments in Singapore last year, according to the city-state's Economic Development Board. Prime Minister Lawrence Wong was quick to remind Trump in a congratulatory letter that the US has maintained "a consistent trade surplus" with Singapore. 

Any blow to the Chinese economy will spill over to ASEAN countries that depend on Chinese consumption, export demand and tourism. Weaker appetite for Chinese goods will affect Southeast Asian suppliers of inputs to Chinese producers. Indonesia, Southeast Asia's largest economy, would suffer most because of its 24.2% export exposure to China, mainly of commodities.

Chinese exporters unable to send their wares to the US might divert them to Southeast Asia, where governments have fielded complaints from local producers hurt by dumping of metals, textiles and consumer goods. 

What is the upside for Southeast Asia? 

Southeast Asia's current manufacturing boom began because of the trade war. Analysts expect that, in time, trade substitution and diversion will outweigh the hit to growth. 

"We think an even greater pushback on China could drive more supply chain diversion, with Chinese businesses trading and investing more within Asia," said Jayden Vantarakis, head of ASEAN research at Macquarie Capital. 

The electric vehicle factories that some Southeast Asian governments aggressively courted could provide an economic buffer. "There is also EV demand growing outside the US, so I think there may actually be a net benefit to Indonesia. What will happen is that smaller countries that are trying to become carbon neutral, especially since petrol prices are increasingly expensive, will try to take over the supply and buy more electric cars," said Sumit Agarwal, professor at the National University of Singapore Business School. 

Trump's promised tariffs may provide ASEAN governments with the impetus to impose antidumping tariffs on Chinese goods, as Thailand did with rolled steel this year. Tighter US rules of origin could also give governments an opportunity to ensure that more high-value parts production and assembly are done locally. 

What will happen to Southeast Asian currencies and markets?

Trump's tariffs may ease the pressure on Southeast Asian central banks to further loosen monetary policy.

"Essentially, Trump's victory is inflationary for the world due to his planned tariffs, so the global monetary normalization or easing cycle likely won't be as sharp as previously thought, including in the Philippines," said Miguel Chanco, chief emerging Asia economist at Britain-based Pantheon Macroeconomics. 

Chanco told Nikkei Asia that Southeast Asian currencies will not strengthen as previously expected, due in part to the markets re-pricing the pace of easing by the US Federal Reserve and therefore continuing dollar strength. 

Among the six major Southeast Asian economies, the Thai baht and Malaysian ringgit have been the worst performers since Trump's victory, declining 3.2% and 2.9%, respectively, against the US dollar through Wednesday. 

Thai securities house InnovestX recommended stocks that will benefit from the strong dollar and weak baht. These include companies with significant export revenue like CP Foods and Delta Electronics, or which are involved in tourism, such as Airports of Thailand, property developers and hoteliers. 

How should Southeast Asian economies prepare? 

Governments are already taking steps to reduce their overreliance on either the US or China by deepening relationships with other countries and regions, and stressing their neutrality.

The Philippines sees its trade agreements with the likes of South Korea as a buffer against US shocks. "We want to see many more of these ... bilateral and multilateral agreements, so that we can open up many more opportunities," said National Economic and Development Authority Secretary Arsenio Balisacan. 

Former Thai Prime Minister Thaksin Shinawatra has suggested, governments could do more to support local companies investing in the US and other diversified manufacturing bases, as Japan did in 2020 with a US$2 billion program known as the "China exit subsidy." 

That support could include reducing operating and logistics costs, providing trade risk insurance and removing barriers to trade. Amending relevant laws to allow transshipment at Laem Chabang port, Thailand's main export channel, would be an invaluable boost to Thai exporters, said Kongrit Chantrik, executive director of the Thai National Shippers' Council. 

Southeast Asian economies should also focus on building resilience by strengthening intra-ASEAN trade, according to Jaideep Singh, analyst at the Institute of Strategic & International Studies, Malaysia.

"There should be efforts to promote economic integration through reduced non-tariff measures, improved trade facilitation and better coordination of regional value chains," he said.

Similarly, countries like Vietnam could "win brownie points" from Trump by buying aircraft engines or liquefied natural gas from the US, according to VinaCapital chief economist Michael Kokalari. 

But he added that fears are "hyperbolic" about trade under Trump, who visited Vietnam twice in his first term. There are no "significant reservations from American consumers to purchase 'made in Vietnam' products," he wrote. On the contrary, the US cannot re-shore everything, so "Vietnam may be viewed as helpful in [weaning] the US off of low-end China-made goods."

 

Vietnam: Exports boost GDP growth to 5.66%

Vietnam's gross domestic product grew 5.66% in the first quarter from a year earlier as exports boomed. This was despite higher shipping costs due to turmoil in the Red Sea.

Growth in the January-March quarter was faster than the expansion of 3.41% in the corresponding period last year, but slower than the fourth-quarter growth of 6.72%. First-quarter numbers are generally lower because of festival holidays.

The Southeast Asian nation, a manufacturing hub and key exporter of smartphones, electronics and garments, is seeking to shore up business activities after missing last year's growth target on weak global demand and brief power shortages. It has set a target of 6.0% to 6.5% GDP growth this year.

The manufacturing and construction sector grew 6.28%, while the services sector expanded 6.12% in the quarter from a year earlier, the General Statistics Office (GSO) said in a report.

Goods exports from Vietnam grew sharply in the quarter, despite Red Sea shipping disruptions, which official estimates show boosted costs by 55% to 73% for cargoes from the country.

Goods exports in the quarter grew 17% from a year earlier to US$93.06 billion, while imports were up 13.9% at US$84.98 billion, resulting in a trade surplus of US$8.08 billion.

Shipments of electronics rose 30% from a year earlier, while smartphone exports increased 10% and garments 7.9%, the GSO said.

Industrial production in the quarter rose 5.7% from a year earlier, the GSO said, adding that March consumer prices rose 3.97% from a year earlier and retail sales in the January-March period rose 8.2%.

Last week, Prime Minister Pham Minh Chinh reassured foreign investors there would be no repeat of last year's power shortages for their factories, as Vietnam ramps up coal imports.

Vietnam's electricity output in the first quarter grew 11.4% from a year earlier to 65.5 billion kWh, the GSO said.

 

Bangladesh: Apparel export to EU falls 20%

Bangladesh’s apparel exports to the European Union (EU) in the 11 months, from January to November 2023, declined by 19.92% to 16.26 billion euro from 20.30 billion euro during the same period of 2022.

Exporters said that the shipment of readymade garments to the EU market decreased in recent months due to the economic slowdown caused by the Russia-Ukraine war.

Global brands and buyers also placed orders in lower quantity due to the election time in Bangladesh but the orders started to increase after the national election in the country.

They hoped that the export to EU would rebound in the next quarter as buyers started to increase their orders thanks to easing inflation.

According to data from Eurostat, the statistical office of the European Union, the readymade garment imports of the EU from the world in January-November 2023 fell by nearly 10% cent to 82.71 billion euro from 91.89 billion euro during the same period of 2022.

Apparel imports of the EU from China in the first 11 months of 2023 declined by 21.42% to 21.15 billion euro from 26.92 billion euro during the same period of 2022.

Although China remained the top apparel exporter to the EU in value, the Eurostat data showed that, in terms of volume, Bangladesh emerged as the highest knitwear exporter to the market in January-November 2023.

Bangladesh’s woven garment exports to the EU in the first 11 months of 2023 were reported at 6.89 billion kilogram while those of China were 5.74 billion kilogram.

In value terms, Bangladesh’s knitwear exports to the EU in January-November of 2023 were reported at 9.94 billion euro against China’s exports of 10.48 billion euro during the period under review.

Bangladesh Garment Manufacturers and Exporters Association President Faruque Hassan recently said that apparel exports to the EU would come back on a positive track in the second quarter of 2024 as the inflation was coming down in the western countries and retail sales were getting better.

He also said that not only Bangladesh but also all the major RMG suppliers witnessed negative growth in the EU and the United States as the global demand decreased due to the economic turmoil.

Apparel imports of the EU from Turkey in January-November of 2023 declined by 13.42% to 9.20 billion euro from 10.62 billion euro during the same period of 2022.

India’s RMG exports to the EU in the first 11 months of 2023 also fell by 11.87% to 3.81 billion euro from 4.33 billion euro during the same period of 2022.

As against this, apparel imports of the EU from Vietnam during January-November of 2023 grew by 2.48% to 3.49 billion euro from 3.40 billion euro during the same period of 2022.

Horrors of Kissinger legacy in Southeast Asia

Half a century after Henry Kissinger drove the US foreign policy in Southeast Asia, the region continues to live with the fallout from the bombing and military campaigns backed by the former secretary of state, who died recently.

In Cambodia, unexploded ordnance left over from Vietnam War-era carpet bombings, orchestrated by Kissinger and President Richard Nixon, are among the remnants of war that continue to kill and maim adults and children, year after year.

The country of roughly 17 million is also still recovering from the genocide perpetrated by the Khmer Rouge, the brutal, ousted government that experts say gained recruits buoyed by desperation in the country after the relentless American assaults.

“(Before the Americans) the countryside of Cambodia had never been bombed out ... but (then) something would drop from the sky without warning and suddenly ... explode the entire village,” said Youk Chhang, executive director of the Phnom Penh-based Documentation Center of Cambodia.

“When your village is bombed and you were told that it’s some Americans that dropped the bomb and when you lost your sister, your brothers, your parents ... what is your choice? Be a victim and die by the bomb or fight back,” said Chhang, himself a survivor of the Khmer Rouge’s notorious killing fields, whose organization now documents the legacy of the genocidal regime.

Even today, the generation born after the Khmer Rouge may largely not be aware of the names or legacy or Kissinger and Nixon, Chhang added, “but (they know) the history of the B52 (bombers) and the American involvement in Cambodia.”

Kissinger’s death at the age of 100 last week has placed back into the spotlight the actions of the controversial titan of American diplomacy, with some of the starkest critiques coming from Southeast Asia, where the US was already at war when Nixon took office in 1969.

Kissinger, who served as his national security advisor and later secretary of state, was awarded the Nobel Peace Prize in 1973 for his role brokering a ceasefire that ended US involvement in the war in Vietnam – and came on the heels of heavy US bombing across northern Vietnam.

But documents declassified in recent decades have shown an unvarnished picture of the closed-door calculations that saw Kissinger and Nixon ramping up covert bombings across Cambodia and extending a secret war in Laos as they sought to choke off North Vietnamese supply lines and quashes Communist movements in the countries.

It’s not known how many people died during this time in Cambodia and Laos, which were officially neutral in the war, but historians say the number could be well over 150,000 in Cambodia alone.

Documents have also revealed what analysts say was the role of Nixon’s successor Gerald Ford and Kissinger in signaling America’s approval of Indonesian President Suharto’s bloody 1975 invasion of East Timor, estimated to have left at least 100,000 dead.

“Kissinger and Nixon saw the world in terms of getting the kinds of outcomes that they wanted – people who were in weaker or marginalized positions, they didn’t really matter that much. So the fact that they were made unwilling pawns, the fact that they became literally cannon fodder, was of no consequence,” said political scientist Chong Ja Ian, an associate professor at the National University of Singapore.

“This sort of action does have a cost on the US more broadly – a lot of the continuing skepticism and suspicion about the US and US intentions was born out of actions such as what Kissinger and Nixon had engaged in.”

From October 1965 to August 1973, the United States dropped at least 2,756,941 tons of ordnance over Cambodia, a country roughly the size of the US state of Missouri. That’s more than the Allies dropped during World War II, according to an account by Yale University historian Ben Kiernan.

Such ordnance in Cambodia, Laos and Vietnam, as well as landmines and other explosives from the decades of conflict that followed in the destabilized region, continue to pose a grave risk to people living there.

Nearly 20,000 people have been killed by mines and unexploded ordnance between 1979 and this past August in Cambodia, with more than 65,000 injured or killed since 1979, according to government data. Most of those casualties are from landmines, but more than a fifth are victims of other kinds of leftover explosives, which include those from American campaigns, experts say.

During the first eight months of this year, four people were killed, 14 injured, and 8 needed amputations due to explosives, according to government data. Experts say the devastation – which is especially acute for people in rural areas – will go on for years to come.

“Twenty, thirty percent of everything shot fired and dropped from an airplane doesn’t work ... we’re going to be dealing with that stuff over here for probably 100 years. That’s Kissinger’s legacy,” said Bill Morse, president of the nonprofit Landmine Relief Fund, which supports organizations including Cambodia Self-Help Demining.

That group works not just to diffuse explosives, but also train people to recognize them. Morse says children across the country are often familiar with how to identify landmines largely planted from years of regional fighting, but may be less aware of the range of unexploded ordnance, often from American operations, which continue to drive injuries and deaths.

Kissinger is widely seen as shrugging off responsibility for wartime decisions and the toll of the campaign in Cambodia, which government documents indicate he helped devise. One journal entry from Nixon’s chief of staff describes Kissinger as really excited as the bombing campaign got underway in 1969.

In a 2014 interview with American radio broadcaster NPR, the diplomat deflected criticism when asked about the bombings in Cambodia and Laos, instead arguing that the B-52 campaigns were less deadly for civilians than the drone attacks in the Middle East ordered by US President Barack Obama.

“The decisions that were taken would almost certainly have been taken by those of you who are listening, faced with the same set of problems. And you would have done them with anguish, as we did them with anguish,” he said at the time.

Today, in Vietnam, Laos and Cambodia government-run agencies and other groups continue to work to remove explosive remnants of war, with experts saying the US government has become the world’s biggest funder of unexploded ordinance and landmine clearance in the world.

But aid groups who are also working on the issue say that the US and other countries shouldn’t lose sight of the on-going consequences of conflict in the region.

“There is particular concern that funding for dealing with the aftermath of historic conflicts in Southeast Asia and elsewhere in the world might be jeopardized if funds are diverted to address new conflict-related crises,” a spokesperson from the United Kingdom-based Mines Advisory Group, which clears explosives in countries including Cambodia, Laos and Vietnam, told CNN.

“The global community has a moral responsibility to all those in the world whose lives continue to be blighted by the impact of wars that ended before many of them were even born.”

 

ASEAN losing its composure

Southeast Asia is at a dangerous crossroads. Once regarded as a haven of relative stability and economic progress, today the region is buffeted by escalating geopolitical struggle between the United States and China, state fragmentation in Myanmar and internal political conflicts that are exposing the limits of democratic reform and the dangers of populism.

These issues will be on full display at the annual leaders' summit of the Association of Southeast Asian Nations next week in Jakarta and may well intensify as the group's rotating chairmanship passes afterward from Indonesia to Laos, the bloc's smallest and poorest member.

Civil society and the international community have long looked to ASEAN, which has reliably preserved regional peace for decades, to deal with major challenges.

But the bloc is now deeply divided. On Myanmar, for example, mainland states have put a premium on state integrity and security over political change and reform while more democratic maritime states, led by Indonesia, regard military rule as intolerable.

In an alarming public display of regional dissonance, Thailand recently directly engaged with Myanmar's military junta without informing Indonesia. By playing on such divisions, the junta has avoided complete ostracization.

The region is also divided over the extent to which China poses a threat and whether it should be contained by the United States and its allies.

Laos, Thailand and Cambodia have close ties with Beijing, reflecting proximity or long-standing political alignment. Vietnam views China with deep historical enmity but maintains a dual-track relationship sustained by ties between the two nations' ruling communist parties. Even so, Hanoi has drawn closer to the US.

The Philippines has effectively checked out of ASEAN because officials in Manila believe the group has done nothing to defend the country's maritime claims against Chinese intrusions, noting its failure to support the 2016 arbitral ruling by a court in The Hague affirming Philippine sovereignty over contested areas.

"We might as well be allied with Taiwan, Japan and South Korea," said a former official after the recent confrontation between a Chinese coast guard ship and Philippine vessels attempting to resupply troops on Second Thomas Shoal in the disputed Spratly Islands. Manila has indeed moved closer to the US since Ferdinand Marcos Jr. became president last year.

Compounding such rifts over external issues is a distinct political divide. The rise of democratic reform movements in Indonesia, Malaysia and even Thailand over the last 30 years has led to more frequent changes in national leadership.

As a result, the personal relationships that held ASEAN nations together under more authoritarian regimes have frayed. Some democratic leaders have begun to wonder why they need to spend so much time with tedious ASEAN meetings when their domestic constituents are more interested in social equality and food security than strengthening regional identity.

All this has made Southeast Asia more fragile and isolated than it appears. Great power leaders who once routinely attended regional summits now often skip them. The US and China prefer bilateral engagements during which they can press for alignment. While he will skip this month's ASEAN summit, US President Joe Biden will visit Vietnam right afterward, reportedly to sign a bilateral strategic partnership agreement.

ASEAN has lost its much-touted centrality and is frankly on life support as an autonomous multilateral platform, reflecting to some degree the decline of multilateralism globally.

What can be done to revive effective multilateral cooperation and rescue the region from fracture by competing great powers and division by political dispute?

Civil society has traditionally helped in quiet ways to build and sustain the sinews of connectivity in the region. Networks of academics and think tanks helped promote connections and address sensitivities among governments and offered regional policy ideas.

Many of those veteran scholars are now retired or deceased. The younger generation has not filled the void, in part because the rivalry of the great powers has polarized much of their ranks.

A possible new approach would be to launch a recovery process to help reconnect the 10 ASEAN states. This would involve identifying common challenges rather than relying on outdated institutionalized processes or weak mechanisms to manage conflicts and protect human rights.

There is clearly a need for cross-bloc dialogue about what can be done. A bottom-up approach could offer innovative ideas and help ease the acrimony that has built up over the past few years. Post-pandemic, there is an urgent need for more contact and understanding in a region vastly more challenged than it was even five years ago.

The US and China are locked in an epic, dangerous rivalry that treats Southeast Asia as a battleground, so they will not be of help. But midsized powers and traditional partners such as Australia, the EU and UK could support regional cohesion if they spent less time pushing Western values and seeding animosity toward China, which even if justified, generates further division.

Southeast Asian governments and their leaders could help by speaking with one voice on critical issues and maintaining traditional balancing approaches to great power competition. As things stand today, there is a real chance that the Philippines and China will come to blows over the Second Thomas Shoal.

That would bring the United States and China dangerously close to war. Will ASEAN leaders be able to combine and collaborate to prevent any crisis from escalating? Right now, that looks doubtful.

 

Hydropolitics: A new term coined in Asia

Most of Asia's major rivers originate in China and flow into countries like India, Bangladesh and Vietnam. China has earned the title of "upstream superpower," but concerns over the weaponization of water, the responses of nations downstream, and climate change are stirring up water politics and stoking tensions.

The visually rich three-part Nikkei Asia series titled Asia's Age of Hydropolitics explores the effects that the actions of upstream nations -- exacerbated by climate change -- have on countries downstream.

The first story focuses on Asia's rivers that originate in the Indo-Tibetan plateau in China. They flow into 18 other nations, delivering water to a quarter of the world's population.

As China gets ambitious about managing its own water shortages by drawing on these rivers -- and allows its foreign policy to dictate its actions upstream -- many nations downstream are feeling its presence.

The second story frames Bangladesh -- and the geopolitically significant Brahmaputra River -- as a proxy of Sino-Indian conflict. The story follows the Brahmaputra as it enters India through the disputed border with China, and explores the effects of dams and upstream politics on the region's most disenfranchised.

As the Brahmaputra makes its way into Bangladesh, the lowest riparian country in the region finds itself at the center of China-India hydropolitical hostility.

The third and final piece in the series focuses on the Mekong -- one of the world's longest and most biodiverse rivers. Dams being built upstream, 22 by China alone, combined with climate change and human activity, have contributed to the sinking of the Mekong Delta. Half of the river-strewn region could be underwater before the century is through.

But locals are adapting -- and emerging innovative strategies offer hope of mitigating the worst.

Courtesy: Nikkei Asia

 

 

 

Britain to join trans-Pacific trade pact

Britain on Sunday formally signed the treaty to join a major trans-Pacific trade pact, becoming the first country to take part since its inception in 2018 and opening the way for members to consider other applications including from China and Taiwan.

The signing was part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) commission meeting being held in New Zealand.

Ministers from member countries will meet later on Sunday to discuss a range of topics, including how to move forward with new applications and a review of the agreement itself.

Britain's Business and Trade Secretary, Kemi Badenoch said at the signing that her country was delighted to become the first new member of the CPTPP.

"This is a modern and ambitious agreement and our membership in this exciting, brilliant and forward looking bloc is proof that the UK's doors are open for business," Badenoch said.

The British government still needs to ratify the agreement.

The CPTPP is a landmark trade pact agreed in 2018 between 11 countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Britain will become the 12th member of the pact that cuts trade barriers, as it looks to deepen ties in the Pacific after its exit from the European Union in 2020.

China, Taiwan, Ukraine, Costa Rica, Uruguay and Ecuador have also applied to join the CPTPP.

New Zealand Prime Minister Chris Hipkins said the road to bringing Britain into the agreement had been long and at times challenging, but having major economies inside the partnership would bring the Atlantic to the Indo-Pacific in a way that strengthened the rules-based trading system in the region.

 

 

US exports over 100 million gallons of ethanol

The United States exported 101.48 million gallons of ethanol and 1.01 million metric tons of distillers’ grains in June, according to data released by the USDA Foreign Agricultural Service on August 04. Exports of both products were up as compared to June 2021.

Ethanol is an organic chemical compound. It is a simple alcohol with the chemical formula C₂H₆O. Its formula can be also written as CH ₃−CH ₂−OH or C ₂H ₅OH, and is often abbreviated as EtOH. Ethanol is a volatile, flammable, colorless liquid with a characteristic wine-like odor and pungent taste.

Ethanol is naturally produced by the fermentation of sugars by yeasts or via petrochemical processes such as ethylene hydration. It has medical applications as an antiseptic and disinfectant. It is used as a chemical solvent and in the synthesis of organic compounds, and as a fuel source. Ethanol also can be dehydrated to make ethylene, an important chemical feedstock.

The 101.48 million gallons of ethanol exported in June was down when compared to the 147.06 million gallons exported in May, which was a four-year high, but up from the 82.09 million gallons exported during the same month of last year.

The US exported ethanol to more than 30 countries in June. Canada was the top destination for US ethanol at 41.2 million gallons, followed by South Korea at 13.64 million gallons and the UK at 12.02 million gallons.

The value of US ethanol exports was at US$324.77 million in May, down from US$410.39 million a month ago, but up from US$187 million in June 2021.

Total US ethanol exports for the first half of 2022 reached 827.39 million gallons at a value of US$2.25 billion, compared to 662.62 million gallons exported during the same period of 2021 at a value of US$1.27 billion.

The 1.01 million metric tons of distillers’ grains exported in June was up from both 966,108 metric tons in May and 938,280 metric tons in June 2021.

The US exported distillers’ grains to approximately three dozen countries in June. Vietnam was the top destination at 197,192 metric tons, followed by Mexico at 158,501 metric tons and Turkey at 109,819 metric tons.

The value of US distillers’ grains exports was at US$311.08 million in June, down slightly from US$311.85 million the previous month but up from US$248.47 million in June of last year.

Total US distillers’ grains exports for the first six months of the year reached 5.67 million metric tons at a value of US$1.67 billion, compared to 5.4 million metric tons exported during the same period of last year at a value of US$1.42 billion.

United States-China ties as fraught as ever

At the height of the Cold War, US President Richard Nixon flew into communist China’s center of power for a visit that transformed US-China relations and China’s position in the world in ways that was unimaginable at the time.

The relationship between China and the United States was always a challenge, and after half a century of ups and downs, is more fraught than ever. The Cold War is long over, but on both sides there are fears a new one could be beginning. Despite repeated Chinese disavowals, the US worries that the democratic-led world that triumphed over the Soviet Union could be challenged by the authoritarian model of a powerful and still-rising China.

 “The U.-China relationship has always been contentious but one of necessity,” said Oriana Skylar Mastro, a China expert at Stanford University. “Perhaps 50 years ago the reasons were mainly economic. Now they are mainly in the security realm. But the relationship has never — and will never — be easy.”

Nixon landed in Beijing on a gray winter morning 50 years ago. Billboards carried slogans such as “Down with American Imperialism,” part of the upheaval under the Cultural Revolution that banished intellectuals and others to the countryside and subjected many to public humiliation and brutal and even deadly attacks in the name of class struggle.

Nixon’s 1972 trip, which included meetings with Chairman Mao Zedong and a visit to the Great Wall, led to the establishment of diplomatic relations in 1979 and the parallel severing of formal ties with Taiwan, which the US had recognized as the government of China after the communists took power in Beijing in 1949.

Premier Zhou Enlai’s translator wrote in a memoir that, to the best of his recollection, Nixon said, “This hand stretches out across the Pacific Ocean in friendship” as he shook hands with Zhou at the airport.

For both sides, it was a friendship born of circumstances, rather than natural allegiances.

China and the Soviet Union, formerly communist allies, had split and even clashed along their border in 1969, and Mao saw the United States as a potential counterbalance to any threat of a Soviet invasion.

Nixon, embroiled in the Watergate scandal at home, was seeking to isolate the Soviet Union and exit a prolonged and bloody Vietnam War that had divided the US society. He hoped that China, an ally of communist North Vietnam in its battle with the US-backed South, could play a role in resolving the conflict.

The US president put himself in the position of supplicant to Beijing, said June Teufel Dreyer, a Chinese politics specialist at the University of Miami. Chinese state media promoted the idea that a prosperous China would be a peaceful China and that the country was a huge market for the US exports, she said.

It would be decades before that happened. First, the US became a huge market for China, propelling the latter’s meteoric rise from an impoverished nation to the world’s second largest economy.

Nixon’s visit was a pivotal event that ushered in China’s turn outward and subsequent rise globally, said the University of Chicago’s Dali Yang, the author of numerous books on Chinese politics and economics.

 

Overcrowding of warships in South China Sea

Senior Chinese diplomats have called on the United States not to show off its power over the South China Sea and warned of the risk of a misfire in the disputed waters with increasing presence of naval vessels.

Speaking to a South China Sea forum in Sanya, on the Southern Chinese island province of Hainan, via video link, Chinese Foreign Minister Wang Yi blamed an unspecified country for seeking to show off its power and maritime dominance.

“We must adhere to multilateralism and jointly maintain maritime order. The ocean is not a zero-sum game of competition, and no one should use the ocean as a tool to impose unilateral power,” Wang said.

“We oppose that certain countries, for the purpose of safeguarding maritime hegemony, flaunt their forces and form cliques at sea, and continue to infringe on the legitimate and lawful rights and interests of other countries.”

China and the US have been stepping up their military presence in the disputed waters, with increasing risks of an accidental clash. Concerns have escalated as the US has teamed up with its allies, including Britain and France, to send naval vessels to the South China Sea. Diplomatic observers have warned the consequences would be more serious if there was a clash between nuclear submarines.

Last month, the USS Carl Vinson carrier strike group and the British carrier HMS Queen Elizabeth conducted a series of exercises in the South China Sea. It was the USS Carl Vinson’s ninth visit to the area this year.

The South China Sea is heavily contested between China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan. The US is not a claimant, but accuses Beijing of stoking military tensions and restricting freedom of navigation there, and has said its presence is needed to provide security backup to its Asian allies.

“China calls on the United States to actively consider joining the convention and take concrete actions to participate in the defence of the international maritime rule of law,” he said.

Gloria Macapagal Arroyo, former president of the Philippines, said the tensions and troubles in the South China Sea were posing “grave threats” to stability, and Southeast Asian nations were seriously concerned.

“Imagine what an exchange of fire between warships of the People’s Liberation Army and the US Seventh Fleet would do to stock, currency and commodity markets worldwide,” she asked the forum.

“The world hopes that such an unwelcome event remains pure imagination. But there are reasons to worry. For the first time in years, if not ever, aircraft carrier groups of China and America deployed in the South China Sea at the same time; so did French and British warships. Earlier this year, the presence of hundreds of Chinese vessels near Whitsun Reef led to Philippine diplomatic protests and the exchange of unfriendly words between Manila and Beijing.”

Arroyo said the South China Sea disputes had previously been managed by the expansion of economic and diplomatic ties among the nations involved, and with a balance of power.

“Now, the balance of power approach is increasingly being taken with the growing presence of American and allied forces in the South China Sea, which will get even more formidable with the Aukus, to which the PLA may feel the need to respond,” she said, referring to the deal struck with the US and Britain to help Australia acquire a nuclear submarine fleet.

A Pentagon report last week said China’s navy had expanded to 355 ships and submarines by 2020. It said the Chinese navy had placed a high priority on modernizing its submarine forces, operating six nuclear-powered ballistic missile submarines (SSBNs), six nuclear-powered attack submarines (SSNs), and 46 diesel-powered attack submarines (SSs).

But Wu Jianghao, assistant Chinese foreign minister, said China had engaged in discussions with other South China Sea claimants on joint exploration of its resources and a code of conduct.

“We must oppose maritime hegemony, division and confrontation, and build the ocean into a territory where all parties expand cooperation, rather than a zero-sum arena,” he told the forum.

 

Corona virus likely to move from India to neighboring countries

The world is watching India’s coronavirus crisis but Asia’s developing nations are all at risk. From Laos, Vietnam and Thailand in Southeast Asia to Bhutan and Nepal bordering India, countries have been reporting significant surges.

The reported spikes in these handfuls of nations have been steep enough to raise the alert against potential dangers of an uncontrolled spread. The increase is mainly because of more contagious virus variants, though complacency and lack of resources to contain the spread have also been cited as reasons.

In Laos last week, the health minister sought medical equipment, supplies and treatment, as cases jumped more than 200-fold in a month.

In Nepal hospitals have been quickly filling up and running out of oxygen supplies. With infections surging, will Nepal be the next Covid-19 hotspot?

In Vietnam, authorities on Tuesday closed schools in Hanoi as Vietnam battles its first wave of Covid-19 cases via community transmission in more than a month.

In Thailand health facilities are under pressure, as 98% of new cases are from a more infectious strain of the pathogen, while some island nations in the Pacific Ocean are facing their first Covid waves.

Although nowhere close to India’s population or flare-up in scope, the reported spikes in these countries have been far steeper, signaling the potential dangers of an uncontrolled spread. The resurgence – and first-time outbreaks in some places that largely avoided the scourge last year – heightens the urgency of delivering vaccine supplies to poorer, less influential countries and averting a protracted pandemic.

Also on top of the list are Bhutan, Trinidad and Tobago, Suriname, Cambodia and Fiji, as they reported the epidemic erupting at a high triple-digit pace.

All countries are at risk as disease appears to be becoming endemic and will likely remain a risk to all countries for the foreseeable future.

The situation is very serious as new variants require a new vaccine and a booster for those already vaccinated. The economic hardship of poorer countries makes the battle even tougher.

The new cases emerged shortly before a three-day public holiday in Vietnam when many families travel across the country, raising the risk of a wider outbreak.

In Sri Lanka, authorities have isolated areas, banned weddings and meetings and closed cinemas and pubs to cap a record spike following last month’s local New Year festivities. The government says the situation is under control.

The Covax program to distribute vaccines around the world had planned to ship 1.9 million doses in the first half of this year. However, India’s surge in cases has resulted in global shortages.

The situations in many countries prove that vaccines are far from a panacea. Some vaccines, which had been considered highly effective, caused severe side effects, including even death, leading many countries to stop their use.

Why United States has lost almost every war?

Since the World War II, the United States has lost almost every war that it has initiated in a developing country. This symbolizes the tragedy of super power’s incapability. 

The US is bowing out without having achieved its original objectives. The withdrawal also poses serious consequences for Afghanistan, the region and NATO’s reputation.

After the Vietnam fiasco and the Iraq debacle, as well as the example of the Soviet defeat in Afghanistan, the US and its allies should have been wiser in their choice of intervention, but Afghanistan’s case clearly demonstrates the opposite. These interventions have been driven by the view that the super power has the necessary military power to easily overwhelm an enemy, which has turned out to be untrue.

Washington’s planners may have proved very effective in invading a country, but have been defeated invariably in every war. Four interrelated themes explain America’s failure in these three countries.

First, Washington’s inability to comprehend the complexity of the country it has invaded and the region. The US may have been good at overthrowing governments but has no idea when it comes to their replacement. The US invades without a clear and deep understanding of the very complicated nature of their societies and intricacies of their neighborhoods.

Second, the US hasn’t been able to secure a credible and effective partner on the ground in the invaded country. This was true in South Vietnam and has been also the case with Iraq and Afghanistan. Every leader and government that the US has backed in these countries has proved to be incompetent, manipulative, unpopular and incapable of generating national unity.

Third, US hasn’t been able to sell its invasions and fulfill its original promises to the people of these countries. The disillusionment in the invaded countries and in the US has undermined its war efforts.

Fourth, Washington has learned little or nothing from its past experiences: it is not well equipped or suited for fighting national insurgencies. The insurgents have shown the staying power to exhaust the US.

All of these issues have come together to demonstrate why America’s Afghanistan adventure has failed.

President Joe Biden’s declaration to withdraw troops is a clear admission of defeat. He is doing what his predecessor and long-standing critic of the Afghan war Donald Trump had set out to do.

The tragedy is that the withdrawal follows very high human and material costs for the US and its allies as well as for the Afghan people. The war has over US$2 trillion.

Afghan’s human and property losses have been far greater. Current estimates put the number of civilians and security service men and women killed at more than 100,000, with many more injured and displaced.

All the promises made initially by President George W. Bush to free Afghans and to transform the country into a stable, secure, prosperous democracy seem farther from the reality.

The US and its allies will leave behind a broken Afghanistan, just as the US left South Vietnam and Iraq. With no political settlement or ceasefire in place Taliban have already clinch victory.

Taliban are now well positioned to get control over Kabul, but the takeover will not be the end of the Afghan conflict. On the contrary the conflict will continue with more suffering for the poor Afghans.