Unlike in his first presidency, US President-elect Donald Trump is more confident and prepared for his second term, said Professor Chan Heng Chee. - Photo: Reuters
SINGAPORE (The Straits Times/ANN): The unpredictable nature of Donald Trump, poised to begin his second US presidency, will make 2025 a volatile year, two veteran Singapore diplomats said at the UOB Global Markets Economic Forum held at Pan Pacific Singapore on Jan 14.
The US President-elect is due to assume office on Jan 20.
Professor Chan Heng Chee, ambassador-at-large at the Ministry of Foreign Affairs in Singapore, said: “What the US does or does not do matters to the whole world.
“It is the largest and most powerful economy in the world. It has the most powerful military in the world.
“Mr Trump himself values being unpredictable. It is his negotiating tactic and he uses this tool to his advantage.”
On Trump’s threat to impose universal tariffs while hiking tariffs for China to as high as 60 per cent, Prof Chan said tariffs will rise and affect Asean members, particularly Vietnam.
The region has benefited from the diversification of the supply chain from China to countries such as Vietnam, Thailand, Malaysia and Singapore.
“That attracted attention because it is seen in the US as avoiding sanctions. President Biden was going to fix this and tax these countries in South-east Asia. What more President Trump,” she said.
Prof Chan added that free trade agreements (FTAs) with the US are not foolproof. There is a provision which allows the US to push aside the agreement for national security reasons, she noted.
Singapore could end up as “collateral damage”, she said. While US tariffs may not be targeted at the Republic, they affect the whole economic environment, and that impacts Singapore.
She advises keeping calm and observing the situation, noting that Asia remains relatively sanguine compared with Europe, which is anxiously awaiting Trump’s moves.
On the dangers of a war between the US and China, Prof Chan, who was Singapore’s ambassador to the US from 1996 to 2012, believes that Trump is not “a man of war”.
She noted that when he first took office back in 2017, he did not initiate a single war, and it was Trump who took the first steps then to end the war in Afghanistan.
Her concern, however, is for Taiwan, specifically how lower-level US officials will handle cross-strait issues with China. By the time Trump turns his attention to it, options would have been narrowed, she said.
Unlike in his first presidency, Trump is more confident and prepared for his second term, said Prof Chan. He has had time to think about his goals and team members, she said. So far, he has assembled a “moderate” economic team.
On China, Prof Chan has a positive view and believes it is only a matter of time before the world’s second-largest economy recovers.
Confidence, however, remains a major problem facing China’s policymakers. It takes consistent policies to boost confidence and trust.
Asked if there is the possibility of a grand bargain between Trump and China’s President Xi Jinping for global stability, Prof Chan noted that both sides have made positive comments about each other – but that was on a personal level. There are structural reasons for tensions between the two superpowers, with both wanting to maintain their dominance, she said.
“So I don’t see a grand bargain but some stabilisation,” she added.
Prof Chan also delivered Professor Tommy Koh’s keynote address at the forum as he was feeling unwell.
The former ambassador to the US from 1984 to 1990 made five predictions for 2025.
Prof Koh predicts that there will be no war between the US and China due to Trump’s aversion to war.
The ambassador-at-large sees Trump’s protectionist trade policies hurting global trade, saying Singapore is naturally worried by the threat.
Prof Koh said Singapore would seek an exemption from tariffs based on its FTA with the US and the trade surplus the US enjoys with the Republic.
The Singapore Government also allows the US Navy and Air Force access to military facilities here for transit and logistics support.
Singapore also hosted the first North Korea-US Summit in 2018 when Trump was president.
Prof Koh believes China’s economic miracle is not over, disagreeing with views that the country has entered an era of slow growth.
China’s economy will grow 4 per cent to 5 per cent this year, powered by electric vehicles, clean and renewable energy as well as artificial intelligence, he said.
The Asean economy is a “bright spot” in a darkening world, and is expected to grow 4 per cent to 5 per cent annually. He predicts that the region will overtake Germany to become the fourth-largest economy in the world, from fifth currently.
Prof Koh also predicts that Trump will withdraw from the Paris Agreement on climate change for the second time. This will be a setback but “not fatal” as the rest of the world will carry on, he said. - The Straits Times/ANN
