In his quest to bring jobs back to the U.S. , president Donald Trump has railed against the trade policies of major Asian trading partners including China, Japan, and South Korea, all of which run large trade surpluses with the U.S. But Trump's focus on big deficits may lead him into a widening trade war with a long list of Asian nations, including India, Malaysia and Vietnam, according to Bloomberg.
The U.S. runs a trade deficit with most of its trading partners in Asia, according to an analysis by Bloomberg. Data from the U.S. Census Bureau indicates that the U.S. ran a 2016 trade deficit of $347.0 billion with China, $68.9 billion with Japan, $32.0 billion with Vietnam, $27.7 billion with South Korea, $24.8 billion with Malaysia, $24.3 billion with India, $18.9 billion with Thailand, $13.2 billion with Indonesia, and $1.8 billion with the Philippines. (To read more, see: What if Trump Starts a Trade War With China?)
Here is an assessment of how a trade war might affect U.S. relations with Vietnam, India and Thailand, according to Bloomberg.
According to data from the World Bank, Vietnam exported a total of $162.0 billion worth of goods and services in 2015, representing 89.8% of its total GDP. As of 2015, the U.S. was Vietnam’s largest export destination, receiving 20.66% of the country’s exports including furniture, bedding and knitwear.
While trade between the two nations is currently governed by WTO rules and a Trade and Investment Framework Agreement, Vietnam had been anticipating the finalization of the TPP trade agreement in order to strengthen its ties with the U.S. But with Trump already moving to scrap the TPP, Vietnam may find it harder to export t the U.S. (To read more, see: President Trump Strikes TPP.)
While India’s total exports in 2015 are valued at $264.4 billion, they represent just 20.0% of the nation’s GDP, making it much less export-dependent than Vietnam. Still, the U.S. is its largest export market, 15.3% of total exports. America is a big consumer of Indian information technology services, textiles and precious stones.
Trade between the two countries is also governed by WTO rules, but with an additional Trade Policy Forum that originated in 2005. According to Bloomberg, the relationship between Trump and Prime Minister Narenda Modi has so far been amiable, and trade issues have not yet arisen. However, that could change if Trump were to slap a general tariff on all imports.
Thailand, another highly export-dependent economy, boosted total exports in 2015 to $210.9 billion, representing 69.1% of GDP. Like both Vietnam and India, the U.S. is Thailand’s largest export destination, receiving 11.3% of total exports, as Americans buy the nation's electrical machinery and rubber.
Trade with the U.S. is also governed by WTO rules, and since 2002, a Trade and Investment Framework Agreement. Attempts at forming a Free Trade Agreement in 2004 that were later interrupted in 2006 just prior to a military coup, Thailand will likely have to wait at least several years before it can begin to strengthen trade ties with America.