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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This past weekend, the

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Speaker 1: Asia Pacific Economic Cooperation Summit, better known as APEX, wrapped

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Speaker 1: up in Kyoungju, South Korea. The annual gathering, which began

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Speaker 1: as a way to promote free trade and cooperation across

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Speaker 1: Asia Pacific, was largely overshadowed by ongoing trade tensions between

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Speaker 1: its two biggest member economies, the US and China.

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Speaker 2: I think going into this we had a distinct impression

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Speaker 2: that this was going to be the Trump show, even

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Speaker 2: though he actually didn't intend to actually go to the

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Speaker 2: meetings at all.

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Speaker 1: Adam Fair is Bloomberg's senior geoeconomics analyst for Asia Pacific.

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Speaker 2: His meetings occurred before the official summit began, and yet

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Speaker 2: his presence and US policy kind of loomed large over

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Speaker 2: the entire meeting. Despite President Ches's opportunity, which he did

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Speaker 2: take advantage of to kind of rian placed China at

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Speaker 2: the center of a more stable global trade arrangement, President

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Speaker 2: Trump and the United States and the tariff conversation kind

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Speaker 2: of remained at the center of all discussions.

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Speaker 1: During his five day tour of Asia, President Trump stopped

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Speaker 1: in Malaysia and Japan, before a World Win one day

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Speaker 1: visit to South Korea. He held several high profile bilateral meetings,

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Speaker 1: including a summit with President She. So many right the whole,

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Speaker 1: so many meetings great for our country with literally hundreds

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Speaker 1: of billions trillions of dollars come into a country. As

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Speaker 1: Air Force one lifted off from the city of Busan,

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Speaker 1: the sleek Hong Chi limo carrying President She rolled in

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Speaker 1: and with Trump gone, she stepped into the spotlight.

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Speaker 3: President She being there the whole time.

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Speaker 2: The fact that China will host the next APEC summit

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Speaker 2: gave him an opportunity to kind of continue to hammer

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Speaker 2: the message that China is the more stable and better

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Speaker 2: partner for countries looking for clear economic gains in the

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Speaker 2: near future, and that unlike the United States, they will

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Speaker 2: follow through their commitments. They can be seen as reliable.

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Speaker 1: This is the Big Take Asia from Bloomberg News. I'm Wanha.

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Speaker 1: Every week we take you inside some of the world's

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Speaker 1: biggest and most powerful economies and the markets, tycoons and

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Speaker 1: businesses that drive this ever shifting region. Today, on the

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Speaker 1: show Beyond the Trump, she spotlight what got overshadowed at

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Speaker 1: APEX and as countries try to balance open trade with

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Speaker 1: national security. How are they navigating rising tensions between the

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Speaker 1: world's two largest economies without picking sides. The Trump she

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Speaker 1: meeting last week dominated headlines and overshadowed the APEC summit

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Speaker 1: that followed. Bloomberg's Adam Ferrer says, it's a reflection of

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Speaker 1: a broader shift in how these multilateral forums are perceived.

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Speaker 2: The reality is that APEC and these other large multilateral forums,

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Speaker 2: I think of the G twenty as well, have been

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Speaker 2: losing significance as a major mover of policy. And that's

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Speaker 2: not just a symptem of the Trump administration. It's been

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Speaker 2: happening for the better part of the past decade, as

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Speaker 2: we've seen divergence in the objectives and policy goals of

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Speaker 2: the largest participants.

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Speaker 1: APEC has nearly four decades of history. It's twenty one

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Speaker 1: member economies span the Pacific Rim and include global powerhouses

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Speaker 1: like the US, China, Japan, and Australia. Together, they account

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Speaker 1: for nearly sixty percent of global GDP and half of

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Speaker 1: world trade. And while apex's founding mission breaking down trade

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Speaker 1: barriers and promoting economic cooperation is increasingly challenged, Adam says

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Speaker 1: the forum still plays an important role.

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Speaker 2: The value seems to really be in the convening function, right,

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Speaker 2: bringing together leaders from a very diverse set of economic

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Speaker 2: powers and providing an avenue for them to engage with

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Speaker 2: key market leaders in business as well, that you don't

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Speaker 2: get to do every day, and particularly for some of

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Speaker 2: the smaller economies, there's nothing like it. APEX also unique

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Speaker 2: in that Taiwan, as a major economy, is invited, and

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Speaker 2: while it is not represented at a leader level, it

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Speaker 2: is there and has the opportunity to hold many bilateral

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Speaker 2: meetings with senior officials and leaders across the world, which

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Speaker 2: is incredibly important for it.

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Speaker 1: During his Asia tour, President Trump struck a warm tone

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Speaker 1: with US allies and partners. He danced with performers at

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Speaker 1: a welcome ceremony in Malaysia and wrapped his arm around

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Speaker 1: Japan's Prime Minister Senai Takichi during his speech. That was

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Speaker 1: a stark contrast to months of tariff threats, rusing trade

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Speaker 1: battles and America First rhetoric.

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Speaker 2: I think there's deep scars with many US allies, and

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Speaker 2: that includes NATO, that includes Japan and Korea with how

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Speaker 2: they've been treated in this trade war. Korea is a

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Speaker 2: good example, Korea maintained not only an alliance with the

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Speaker 2: United States, but a free trade agreement with the United States,

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Speaker 2: and what they found when they entered these negotiations with

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Speaker 2: the White House was that was worth basically nothing. But

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Speaker 2: at the same time, now sitting here after APEC, after

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Speaker 2: President Trump and President ejmy Jung sat down and actually

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Speaker 2: agreed to finalize their trade agreement, you do land in

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Speaker 2: a slightly different place than I think we expected, which

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Speaker 2: is that President Trump has actually elevated Korea and Japan

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Speaker 2: and the EU to some extent as preferred partners in trade.

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Speaker 2: But not only just in trade, but in terms of

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Speaker 2: bringing the key industries and investment into the United States

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Speaker 2: that's necessary for his vision of reindustrializing and bringing manufacturing

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Speaker 2: back in those key industries that are going to determine

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Speaker 2: the future for the United States.

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Speaker 1: It wasn't that long ago, just in September, really, when

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Speaker 1: the US raided a Hyunda plant in Georgia and they

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Speaker 1: detained hundreds of CREA nationals. It was a deeply embarrassing

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Speaker 1: episode for Korea. Then, of course Trump was in Korea

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Speaker 1: making nice. What kind of messaging does that send to

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Speaker 1: other Asian countries.

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Speaker 2: So the raid at the Hyndei facility, I think caught

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Speaker 2: everyone off guard, and particularly those in Soul in regard

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Speaker 2: to how they would be treated by the United States,

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Speaker 2: and not only just how their nationals would be treated,

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Speaker 2: but how the individuals they are sending to the United

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Speaker 2: States session do the work to build out these massive investments.

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Speaker 2: The fact that even they are not immune from the

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Speaker 2: other priorities of the administration, which is to push back

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Speaker 2: on immigration or a legal immigration as they see it,

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Speaker 2: you know, it raised real questions about what the intent

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Speaker 2: is that the United States and what their willingness is

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Speaker 2: to actually prioritize these partnerships. And so while I think

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Speaker 2: Trump's demeanor and approach to partners and allies on this

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Speaker 2: series of meetings certainly is helpful to address the problem

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Speaker 2: and remind them that the US does see them as important,

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Speaker 2: it certainly doesn't solve it.

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Speaker 1: Then there's Trump's decision to skip the APEX summit altogether

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Speaker 1: and meet with key Asian leaders one on one instead.

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Speaker 1: Adam says it may not be a deliberate snub, but

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Speaker 1: the message it sent was clear.

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Speaker 2: I think the staff would say that folks should be

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Speaker 2: very happy that Trump showed up at all, and that

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Speaker 2: his arrival in South Korea, the fact that actually he

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Speaker 2: also went to Malaysia some element of the East Asia

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Speaker 2: Summit were a better than expected deliverable from President Trump

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Speaker 2: in terms of his willingness to travel a very long way,

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Speaker 2: and it is having just done those flights.

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Speaker 3: It is a very long way to meet with leaders.

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Speaker 2: But I think the reality is it does align very

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Speaker 2: well with how Trump has been approaching his engagements globally,

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Speaker 2: both in the White House and abroad.

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Speaker 3: Is his objectives come first.

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Speaker 1: Now, Adam, you've served across both of Biden and Trump administrations,

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Speaker 1: how would you characterize the US economic and diplomatic strategy

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Speaker 1: here in Asia. I mean, it seems as if it's

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Speaker 1: changing the region and diplomacy and relationships dramatically.

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Speaker 2: Well, the last part is certainly true. I think it

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Speaker 2: is helpful though, to remind ourselves that trade has been

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Speaker 2: an increasingly complicated issue for US efforts and diplomatic efforts

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Speaker 2: in the Indo Pacific. And that's not new to the

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Speaker 2: Trump administration, even in the Biden administration, which set out

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Speaker 2: a very clear policy objective in the New Pacific, basically

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Speaker 2: putting allies and partners first, seeking to compete with China

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Speaker 2: where it was necessary, but cooperate where possible. Even there

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Speaker 2: because of the kind of this shifting and growing economic

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Speaker 2: nationalism that we saw in the United States and across

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Speaker 2: the globe, Biden administration was unable to move forward with

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Speaker 2: any substantive trade agenda. Throughout all four years of its administration.

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Speaker 2: There were efforts, lots of efforts from countries in the

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Speaker 2: region to try and convince the United States to rejoin

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Speaker 2: the Transpecific Partnership, a trading agree that had actually been

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Speaker 2: built very much by the Obama administration, but that was

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Speaker 2: completely off the table. The big difference though, that we

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Speaker 2: see this time around with President Trump. He views the

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Speaker 2: entire world and this key part of the world through

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Speaker 2: one lens and one lens alone, and that is trade,

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Speaker 2: and not only trade overall, but really through trade balance, right,

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Speaker 2: and only goods, not goods and services, where the United

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Speaker 2: States is far more competitive. And so with that he's

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Speaker 2: kind of put aside the history, both good and bad,

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Speaker 2: with countries.

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Speaker 3: In the region.

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Speaker 2: And as he said multiple times, he asked them for

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Speaker 2: their best offer. Right, give me your best offer, and

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Speaker 2: we will send back a deal for you. To sign

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Speaker 2: and that's been his approach. And in some ways that's

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Speaker 2: understandable for some leaders in the region who kind of

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Speaker 2: get the desire for the United States to take a

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Speaker 2: more nationalistic approach similar to some of them, But at

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Speaker 2: the same time, it's antithetical to how the United States

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Speaker 2: has approached its alliance relationships in the region for the

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Speaker 2: past decade, where it saw a broader strategic importance to

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Speaker 2: the relationship even when there were maybe negative or unequal

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Speaker 2: parts of the relationship, potentially on trade and on economics.

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Speaker 1: After the break with Trump gone, China steps in. How

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Speaker 1: are smaller economies responding and what is China's growing influence

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Speaker 1: mean for the region's future. That's next Donald Trump back

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Speaker 1: in DC.

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Speaker 3: It's she's imping stage right now.

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Speaker 2: He's going to be meeting with Mark Karni of Canada,

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Speaker 2: meeting with Sanai Takaiji of Japan.

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Speaker 1: He'll be giving a speech over the weekend. President. She

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Speaker 1: took center stage at the APEX summit, appearing in nearly

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Speaker 1: every photo and headline. After holding talks with regional leaders

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Speaker 1: and delivering a speech calling for stables, supply chains, and

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Speaker 1: open trade. She arrived at the welcome dinner shoulder to

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Speaker 1: shoulder with South Korean President Eugenie, ladies and gentlemen, the

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Speaker 1: leaders and spouses on the twenty one AID pack Nember Economy.

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Speaker 1: The display of camaraderie was part of She's effort to

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Speaker 1: position himself as a champion of free trade and regional cooperation.

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Speaker 1: Bloomberg's Adam Ferrer says this comes in the wake of

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Speaker 1: Trump's latest trade war, which is hit manufacturing economies like Vietnam, Malaysia,

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Speaker 1: and Indonesia that rely heavily on the US market. But

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Speaker 1: China's pitch isn't without its own complications.

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Speaker 2: While China, I think, has made hay of this situation,

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Speaker 2: has tried to demonstrate themselves, as we've talked about already,

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Speaker 2: as a more stable and reliable partner, they also come

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Speaker 2: with a huge amount of baggage to start with. Right

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Speaker 2: we saw recently with these threats on export controls that

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Speaker 2: China is also willing to take extreme actions, extra territorial

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Speaker 2: action to try and limit the flow of goods that

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Speaker 2: they don't want moving to any individual company or country,

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Speaker 2: depending on their own interests and their ability to leverage

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Speaker 2: that if they want, And that's a real threat for

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Speaker 2: countries and companies that produce electronics around the world, and

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Speaker 2: particularly in Southeast Asia. Simultaneously, China's manufacturing power and the

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Speaker 2: size of their exports are a real threat to domestic

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Speaker 2: industry throughout the region, not only prior to this trade war,

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Speaker 2: but now with the United States erecting this trade wall,

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Speaker 2: we are seeing the diversion of goods, and while we

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Speaker 2: can't be certain that it is all diversion, export figures

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Speaker 2: from China in the last quarter showed a twenty seven

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Speaker 2: percent drop in exports to the United States, but somehow

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Speaker 2: still an eight percent increase in exports overall, and that

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Speaker 2: means much more goods are flowing to Europe, Southeast Asia, Africa,

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Speaker 2: and for that to be pulled into the market, someone

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Speaker 2: else has to lose. And so the question becomes how

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Speaker 2: long can that go on before these local markets have

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Speaker 2: to put up their own trade barriers to try and

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Speaker 2: limit China's role and access to the region.

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Speaker 1: And I think to that point, many APEC countries are

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Speaker 1: caught between this need to maintain open trade and also

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Speaker 1: feeling the pressure to safeguard national security. How do you

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Speaker 1: see countries like South Korea, like Vietnam, or Australia navigating

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Speaker 1: these tensions, especially as they try to avoid choosing sides

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Speaker 1: right between the US and China.

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Speaker 2: To start with, I think there is deep confusion among

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Speaker 2: leaders around the world, and particularly the Asia Pacific, about

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Speaker 2: what US priorities on national security really are right now.

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Speaker 2: What is the US policy towards China, What is the

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Speaker 2: US policy in the Indo Pacific. We don't even have

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Speaker 2: the formal policy documents yet, right we don't have the

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Speaker 2: National Security Strategy or the National Defense Strategy, which gives

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Speaker 2: some hints of what the United States is trying to do.

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Speaker 2: Because at the end of the day, it really seems

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Speaker 2: that President Trump is viewing the world through the same lens.

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Speaker 2: It's not Asia first, it's trade first, and it's his

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Speaker 2: version of trade. And so with that, we've seen big

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Speaker 2: changes on this question of national security, particularly when it

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Speaker 2: comes to things like export controls. These are tools that

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Speaker 2: were put in place to restrict the flow of advanced technology,

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Speaker 2: particularly to China, under the guides of national security and therefore,

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Speaker 2: in principle, as the United States had said in the

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Speaker 2: first trun administration and did say in the Biden administration,

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Speaker 2: they're non negotiable, right These are things that the United

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Speaker 2: States has to do for its own defense, and that

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Speaker 2: it expects partners and allies to do if they wish

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Speaker 2: to be part of the broader US tech ecosystem. But

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Speaker 2: here in the trade negotiations with China, we saw the

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Speaker 2: United States theoretically willing to back away from entity listings

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Speaker 2: and lots of conversations at senior levels over the past

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Speaker 2: several months about not moving forward with new export controls

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Speaker 2: to limit damage in the broader trade relationship.

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Speaker 1: She held mylateral meetings with Japan's new leaders in Iakichi

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Speaker 1: and Kennedy's Prime minister. What do you think China was

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Speaker 1: trying to signal through these engagements?

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Speaker 2: So at the top line, I think China saw an

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Speaker 2: opportunity again to demonstrate that it is a more stable

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Speaker 2: and different type of partner than the United States is

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Speaker 2: presenting itself as now in twenty twenty five. But that said,

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Speaker 2: I think particularly Canada and Japan, each one is unique

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Speaker 2: in their bilateral relationship. President she did actually meet with

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Speaker 2: Prime Minister Ishiba last year at APEC, and this year

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Speaker 2: we had this unique opportunity of Takaichi, the new Japanese

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Speaker 2: Prime Minister, having just been sworn in, and so meeting

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Speaker 2: with her was not unusual, And the fact is that

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Speaker 2: it was an incredibly frosty meeting from all observations, and

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Speaker 2: I think we didn't see any signs that the relationship

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Speaker 2: is moving in a particularly new or positive direction between

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Speaker 2: the two and the messaging from She and Takaichi seemed

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Speaker 2: to demonstrate that, with She kind of emphasizing that Japan

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Speaker 2: needed to take the correct approach to dealing with China

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Speaker 2: to recognize their power and interests, and Takaichi, who is

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Speaker 2: seen as a hardline conservative, not sounding off in that direction,

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Speaker 2: but in fact defending Japan's interests while understanding that China

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Speaker 2: remains a major economic power and a major economic partner

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Speaker 2: for Japan. On Canada, their relationship with China has been

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Speaker 2: incredibly fraught now going back to twenty seventeen twenty eighteen,

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Speaker 2: and so Mark Karney presents a new opportunity for China

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Speaker 2: to reset relations with Ottawa, and so I think that's

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Speaker 2: what we saw there.

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Speaker 3: But he's got a really big task ahead of him.

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Speaker 2: The United States makes up more than sixty percent of

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Speaker 2: overall trade for Canada, and even if he were to

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Speaker 2: double trade with China, or triple shade with China, you'd

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Speaker 2: still be overly reliant in the United States and be

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Speaker 2: held in that domain, and so US interests, particularly security interests,

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Speaker 2: could really undermine that relationship.

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Speaker 1: President Trump wrapped up his Asia tour with a one

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Speaker 1: year trade truce with China. Under the deal, Beijing will

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Speaker 1: suspend new export controls on rare earth elements, resume purchases

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Speaker 1: of US soybeans, and work harder to curb the flow

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Speaker 1: of fentanyl into the US. In return, Washington will reduce

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Speaker 1: tariffs on Chinese goods and delay as sanctions plan that

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Speaker 1: would have hit more Chinese companies. With the Trump she

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Speaker 1: spectacle at APEX still fresh, I asked Adam what he'll

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Speaker 1: be watching to gauge the real impact of this truce

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Speaker 1: and what it means for regional stability.

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Speaker 2: I think one of them is whether the Chinese will

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Speaker 2: live up to the deal. And one of the big

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Speaker 2: issues there is purchases of US agricultural goods. If we

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Speaker 2: look back to Trump's first term, Trump actually signed a

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Speaker 2: very similar deal with China under the Phase one Trade

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Speaker 2: Agreement that called for China to make huge purchases of

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Speaker 2: US agriculture and energy. Two again to try and offset

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Speaker 2: this trade and balance, and due to a variety of factors,

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Speaker 2: one of which very much being COVID, China didn't live

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Speaker 2: up to those purchases.

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Speaker 3: We also really need to look.

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Speaker 2: Out as to what the United States is saying and

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Speaker 2: doing related to Taiwan. Chi Jimping and the Chinese system

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Speaker 2: have made very clear that Taiwan is not the only

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Speaker 2: part of China, and more importantly, that the issue itself

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Speaker 2: is not negotiable. And so the question becomes where the

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Speaker 2: United States actually does continue down the trend that they

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Speaker 2: have right now, where they have quietly supposedly delayed arm

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Speaker 2: shipments potentially stopped present Live from entering the United States

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Speaker 2: for a transit on his way to another meeting. Whether

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Speaker 2: we see that kind of new approach which would worry

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Speaker 2: very much Typeay, or we see the United States return

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Speaker 2: to more traditional approach of supporting TYPEY militarily and speaking

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Speaker 2: up in defensive type pay, which could anger Beijing and

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Speaker 2: lead to a re escalation in the trade and conflict.

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Speaker 1: This is the Big Take Asia from Bloomberg News. I'm

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