A better understanding of Harris’ international trade position may emerge in the months to come.
THE contenders for the US presidency are a study in contrast when it comes to international trade.
Former President Donald Trump has been very vocal on the subject, especially regarding China, whereas Vice President Kamala Harris has not said much on it, despite coming from California, the state that is second only to Texas in total US exports in 2023. For Harris, this may change in the coming months as she seeks to sway voters in a tightly contested race.
US exports were valued at US$3.05 trillion (RM13.54 trillion) last year, up US$35bil compared to 2022, while imports were US$3.8 trillion, down by US$142.7bil. As a result, the goods and services deficit has narrowed compared to 2022 and has actually decreased since the 2010s.
The picture is far different when goods trade is separated from ser- vices trade, in which the US with its cutting-edge technology and state-of-the-art R&D has always maintained a global lead role, with a trade surplus that hit US$1 trillion in 2023, the highest since 2019.
The assumption is that Harris will continue President Joe Biden’s trade policies, which are centred around supporting agriculture and food security in the 2024 trade policy agenda released in March.
Assuring supply chain resilience, addressing unfair policies and practices, and advancing inclusive, sustainable trade policy through expanded engagement will strengthen workers’ rights and sustainable trade practices. These issues may influence trade policy in the US due to their resonance in domestic politics.
Biden’s foreign policy, including on international trade, is not much different from Trump’s “America First” platform. Their stated goals are to support US workers and industry, with Biden’s CHIPS and Science Act emphasising R&D investments and bringing back semiconductor manufacturing to the US. As an alternative to China’s Belt and Road Initiative, there is also the Partnership for Global Infrastructure and Investment, a G7-led initiative.
Relevant to Asia is the Indo-Pacific Economic Framework for Prosperity, which was launched in May 2022 and includes Malaysia among the seven Asean members that signed up.
China views this initiative as confrontational while analysts see it as a US effort to counter China’s influence amid friction over trade and the wider geopolitical struggle between China and the US in the region. Countering China’s influence in the Indo-Pacific region is about the only issue that Democrats and Republicans agree on.
As Harris has chosen Governor Tim Walz of Minnesota as her running mate and vice president contender, Asian governments are likely to pay close attention to Harris’ stance on international trade. Walz is familiar with China as a teacher and once had business contacts through a summer education programme.
According to media reports, he has been hawkish on China, lending his support to Hong Kong democracy activists although his knowledge and experience dealing with the country may give him a better perspective on US-China rivalry.
In a broader geopolitical context, experts point out that Trump and Biden’s strong stance on international trade will not change despite domestic concerns over jobs and globalisation. Analysts see the initiatives emanating from the America First platform as clumsy compared to Biden’s more focused approach, which Harris is likely to continue.
In Malaysia’s case, the country has been cited five times this year in media releases by the US International Trade Commission (USITC), the federal agency that investigates and determines whether imports negatively impact domestic industries or violate the country’s intellectual property rights.
The latest mention by the USITC was on June 21, when Malaysia was among a group of eight countries whose paper shopping bags were determined to be sold in the US “at less than fair value”. As a result, the US Department of Commerce issued anti-dumping duty orders on these products.
There are other cases, including an investigation into the import of crystalline silicon photovoltaic (CSP) cells from Malaysia, Cambodia, Thailand and Vietnam. The USITC said on June 10 there were “reasonable indications” that imports of CSP cells materially injured a US industry and that a group of US solar manufacturers filed a petition for anti-dumping and countervailing duty investigations alleging that the CSP cells are sold for less than fair value and subsidised by the respective governments.
Trump has called for 60% tariff on all goods manufactured in China and in his usual adversarial style, also wants to revoke the “Most Favoured Nation” status granted to Chinese imports.
His vice presidential candidate, JD Vance, is known as a China hawk and for being even more hawkish on trade. According to some, Trump is only hard on China to fish for a deal, unlike Harris, who may continue Biden’s more focused policies.
A better understanding of Harris’ international trade position may emerge in the months to come.
This article first appeared in Star Biz7 weekly edition.
