1. Vietnam as a Case Study in the Global Impact of U.S. Tariff Shocks

Every country is having problems with American tariffs right now—whether they’re waiting for their own letters of challenge to tariff policies, or, like Vietnam, have recently settled them. But even in Vietnam’s case, while there is news of a settlement of some sort, the details are not yet known—and the details are crucial.

I do think that Vietnam, right now, could claim the title of the country having the most problems with American tariffs. To understand that, we have to look a bit back into the history of Vietnamese external trade, particularly in the 1990s after normalization with China.

Vietnam began importing many goods from China because its own economy had been devastated—both by war and by the isolation of the 1980s. With all these goods coming in, it developed a significant trade deficit with China, with no offsetting surplus of exports in the 2000s. Vietnam managed this ongoing deficit by building up a trade surplus with the United States, especially in seafood and textiles at first. After 2010, electronics became more prominent.

However, the large external inputs for these exports still came from China—not just in electronics. Even in textiles, for example, Vietnam was sourcing two-thirds of its fabrics and fibers from China.

So what is the deal Vietnam got from Trump? It’s a 20% tariff—which doesn’t sound terrible, considering Vietnam’s current tariff rate was around 15%. The threat had been 40%, so 20% is better. However, under the new agreement, there’s still a 40% tariff on goods “sourced from China.” And we don’t yet know what “sourced from China” really means.

This is especially concerning because half of Vietnam’s workers are in export industries. So while the deal has been signed, there’s total confusion about what effect it will have on Vietnam’s exports to the U.S.—and on Vietnamese exports in general. And this couldn’t be more important: Vietnam has, by far, the highest ratio of exports to GDP among Asian countries.

What does Vietnam need to do? Well, it needs to diversify its trading partners, which it is working hard on, and it needs to develop its domestic market. But those are difficult steps. They’re in the right direction, but they’re difficult.

Vietnam simply doesn’t have the domestic market opportunities that China does. Vietnam is basically the size of Guangdong Province—and if Guangdong had to rely only on its local market, it would be in serious trouble.

So the traumas of the current Trump tariff policy remain unresolved in Vietnam. Vietnam becomes a case study of just how extreme the effects of the new U.S. policy can be.

2. Trump’s Second Term: What Does It Mean for the Global Order?

If we try to get a big picture on Trump’s second term, I would say that it introduces traumatic uncertainty in every dimension of global affairs.
Let’s talk about three broad dimensions.

Bilateral Relationships

First of all, bilateral relationships. We’ve just discussed the bilateral relationship with Vietnam—it’s an extreme case. But Trump’s second term is creating serious problems for everyone, including U.S. allies. Everyone is watching the news from Washington to see what has changed this week. There’s even the phenomenon of “TACO”—Trump Always Chickens Out—regarding tariff scares, or whether the policies persist.

The Global Order

The second dimension of global affairs affected is the global order. The United States, even under Trump, doesn’t determine everything happening in the world. For example, Japan and South Korea are both facing elections. The Japanese election might go more to the right, while the Korean election might lean more to the left.

Besides domestic effects, these elections will influence their bilateral relationship and their relationships with China and other countries in the region. However, the consequences of these internal developments are made more uncertain by Trump’s second term and his approach to international relationships.

How does Trump feel about allies in Asia? How will he deal with China? These questions influence how domestic political shifts in the region translate into regional and global relationships. This global-order effect is a significant dimension of the consequences of Trump’s second term.
Trump has shaken the web of global relationships. Every country will react differently based on its own circumstances. But as each country reacts differently, they also affect one another. These are the secondary, ripple effects of Trump’s policies.

The End of the American Century

The third effect is harder to define, but it may be the most important: the symbolic end of the “American Century.” It already sounded hollow when President Biden spoke of “democracy versus authoritarianism.” Now, even in Washington, that framing seems to have collapsed. What will replace it?
What kind of modernization and development will define the world going forward? Will global values and new forms of international—and domestic—relationships emerge? Or will we be left only with chaos?

Professor Wang Jisi has identified five eternal themes in international relations: security, wealth, faith, freedom, and justice. I think Professor Wang makes a good case for calling these eternal. But their content and urgency are changing. We’re living in a time of deep, fundamental transformation.
Trump’s second term doesn’t dictate what other countries do, but it certainly shakes the framework they are accustomed to.

3. Can Emerging Institutions Fix a Broken Global System?

I would make a basic distinction between inclusive and exclusive regional architectures.

If we look at exclusive architectures, the comfort of alliances is certainly something. If you feel at risk, you want to have allies. This shared exposure to risk—and the desire to combine strengths—creates a situation in which you are, in a sense, acting as if you have an adversary. You’re confirming an adversarial stance between yourself and the target of your alliance.

By forming such an alliance, you reduce your ability to build potentially positive relationships with your adversary. You’re also subordinating your national policy to the alliance’s collective policy. In effect, you’re giving up some autonomy in how you manage relations with the country you perceive as a threat.

Finally, if you’re not the organizer of the alliance, you’re also subordinating your national interest to the interest of the alliance leader. So, while joining an alliance might feel warm and security-enhancing, it comes with significant opportunity and autonomy costs.

Let me take an example: Finland joining NATO after the Russian invasion of Ukraine.

This seems logical—Finland has a long border with Russia. Before joining, it maintained a neutral stance. In fact, the term “Finlandization” in international relations refers to being a neutral country—neither clearly aligned nor adversarial. Because of its neutrality, Finland had a nuanced relationship with Russia, guided by its own interests rather than being pulled into Cold War dynamics.

Now, as part of NATO, Finland may feel more secure, but it loses the flexibility it once had. Its border with Russia will now be more restricted. If the Russian situation changes, Finland will have to respond as part of NATO, not independently. In other words, it becomes a small voice in a large organization rather than having its own voice.

This illustrates the problems with exclusive alliances.

Now let’s look at AUKUS and the Quadrilateral Security Dialogue (the Quad).

These are semi-alliances, not full ones.

• AUKUS is a trilateral security partnership between the UK, Australia, and the US. It ties Australia and the UK more tightly into U.S. military strategy. I personally don’t see long-term benefits for Australia in having nuclear submarines. It may actually reduce its flexibility in dealing not just with China, but also with Southeast Asia, which strongly opposes nuclear weapons in the region.

• The Quad is less of an alliance. It’s more of a discussion forum. It’s not deeply rooted in military cooperation, and it lacks concrete outcomes. It’s ambiguous and underdeveloped.

By contrast, inclusive architectures—like ASEAN (Association of Southeast Asian Nations)—are, in my view, models for the world.

With East Timor joining, ASEAN will have complete regional membership. Internally, it operates by consultation and consensus. That slows decision-making—ASEAN is not a rapid actor—but when it does take action, everyone is on board. That’s something even the EU sometimes struggles with.

Externally, ASEAN increases the visibility and voice of Southeast Asia in Pacific and global politics. For example, take Secretary of State Marco Rubio’s visit to Malaysia. Why is he there? To show respect for ASEAN and to attend its post-ministerial conference and the East Asia Summit of foreign ministers. It also gives the U.S. an opportunity to meet with Chinese and Russian foreign ministers on the sidelines.

This visit isn’t about Malaysia alone—it’s about the U.S. relationship with ASEAN. If Malaysia weren’t part of ASEAN, there would likely be no visit at all.
Meanwhile, under Trump’s second term, Malaysia just received notice of a new U.S. ambassador nominee who has no qualifications. Some groups in Malaysia even want to refuse accreditation—but they’re cautious because he’s a friend of Trump. The State Department has also announced major personnel cuts—many of whom handle the details of relationships with countries like Malaysia.

So ASEAN is not only important internally for its members—but also externally for its collective leverage.

Another example is the Shanghai Cooperation Organization (SCO). It’s also inclusive and consensus-based, but lacks the regional coherence that ASEAN has. Still, its significance lies in the fact that it is not threatening to outsiders—which sets it apart from alliances. Unlike the Quad, which carries ambiguity about being aimed at China, the SCO is clearly not designed to oppose neighboring countries.

AUKUS, on the other hand, is premised on the real possibility of conflict—that’s why people buy nuclear submarines.

In contrast, ASEAN and the SCO are based on shared interests, and therefore reduce the likelihood of conflict.

That’s the key difference between inclusive and exclusive regional architectures.

4. What Role Is Pacific Asia Playing in the Changing Global Economic Order?

I think that the re-centering of what I call Pacific Asia—which includes the Koreas, Japan, China (or greater China), and Southeast Asia—is underappreciated for its regional significance and interconnectedness. The region’s GDP is larger than that of the US and Europe combined.
It’s not just a question of adding numbers. If you look at the trading patterns of all the countries involved, the internal integration of Pacific Asia is greater than that of either North America or Europe. Moreover, the kind of integration going on is not about final products being exchanged between countries. Instead, it’s about interconnected global value chains that often begin as regional value chains.

Sometimes these chains remain within the region; sometimes they aim at developed markets. But essentially, products are produced not simply in one country or another—they are produced in the region. So, we have a region that is truly functioning with a tremendous amount of economic coherence.
What is its structure?

If you look at trade patterns—I’m focusing on the economic side here—you’ll see that many of them center on China. So, is China the center of Pacific Asia? I would say: yes, but.

The “yes” is because China is certainly the major part of the population and production. It is geographically and geopolitically central. But is it the hegemon of the region? No. The region does not have a hegemon. There are still important conflicts and differences of interest. However, the region hasn’t needed a hegemon to develop and prosper over the last 40 years.

It has been a region led by mutual interests. Its development has been peaceful, and because it’s peaceful, it hasn’t gotten as much attention as more dramatic geopolitical developments.

So, what sort of centrality does China have?

It’s a centrality of participation—a centrality as a major component of a functioning regional system in which every country plays a role. That is not hegemonic centrality. It’s not the American Century. It’s not European colonialism or neo-colonialism. It’s asymmetric, yes—but most international relationships are asymmetric.

5. How Should Middle Powers Navigate an Uncertain World Between U.S. and China?

Inevitably, as countries wake up in the morning and read the news or listen to the radio, they are thinking: How does this affect our interests? And the truth is, it affects every country differently.

The United States and China together represent the middle third of the global political economy. Because of this, they are each other’s primary focus. China wakes up and looks toward the U.S.; the U.S. wakes up and looks toward China.

It’s easy for large, global powers to assume their relationship is the most important one in the world—because it is the most important to them. And yes, the U.S.-China relationship is a major concern for everyone else too. But the rest of the world is not divided into two camps. We are living in an international system of global powers, where every nation has its own relationship to those powers.

However, these global powers are not hegemonic. When we speak of China’s centrality in Pacific Asia, we are not referring to a hegemonic “sphere of influence,” but rather to a sphere of cooperation. And that cooperation does not end at Pacific Asia’s borders—China and the region as a whole maintain positive relationships with much of the rest of the world.

Importantly, middle powers are not passive spectators in a boxing match between the U.S. and China. Their core strategic challenge is to stabilize uncertainty in a volatile world, while also pursuing the opportunities that such a world presents.

This is not easy. It requires hedging—protecting against risks and unexpected shocks. It also requires building and maintaining partnerships. Every country today should be multiplying its partnerships, because whatever comes next in global affairs will be shaped by existing relationships. Having firm and positive ties in place means that, when change does come, a country will have friends to face it with.

6. Where Is the U.S.-China Relationship Ultimately Headed?

I think that a complete decoupling between the U.S. and the global economy is quite unlikely—primarily because of the nature of the global economy and the nature of global information systems.

We’ll likely see continuing efforts—if Trump’s second administration continues in its current direction—to isolate the United States from the global economy, and also increasing alienation in global politics.

But as the consequences of that isolation begin to affect American prosperity, as well as the public mood and economic outlook at home, I believe there will be a gradual realization of the costs of an isolationist U.S. foreign policy.

It is not possible to make America great again by isolating it and emphasizing exclusively American interests at the expense of the rest of the world.
And if I’m correct—and if Trump is wrong, which only the future can determine—then the United States will be isolating itself, but its isolation will not change the fundamental structure of the global economy.

For example, if the U.S. dollar loses ground as the global reserve currency as a result of these policies, and other developments reduce America’s clout in global finance, trade, diplomacy, or even security, the effects will inevitably reach American domestic politics.
One of the strengths of American politics, however, is its capacity for course correction. Trump himself has shown that a change in direction is possible—let’s hope that ability to change continues.

7. How Should We Understand and Manage Asymmetric Relations Today?

I have to say that my whole idea of asymmetry came from my travels between China and Vietnam in the 1980s. China and Vietnam have had an asymmetric relationship for as long as both have existed. Yet, both continue to exist. So obviously, asymmetric relationships can be resilient. Stable may be too strong a word, but asymmetric relationships can certainly tend to be resilient.

Before we get started on current events, I think it’s a good idea to review what an asymmetric relationship is. In a sense, every international relationship is asymmetric. The two sides are not the same. It’s not an “A equals A prime,” but I use the term asymmetric theory to analyze relationships between larger and smaller countries, where the larger country can do things to the smaller country that the smaller country cannot do to the larger country.
In the American war in Vietnam, Washington could bomb Hanoi, but Hanoi could not bomb Washington. So the question is, if the larger country has the capacity to damage the smaller country, can it make threats? Does this mean it can just threaten the smaller country to do what the bigger country wants? Does the big country simply dominate? It might seem natural that the larger side would win. If that seems natural, then rethink your sense of what is natural.

Look at Trump’s recent threats to Canada. Has this led Canada to be more submissive? No. Actually, it led to a change in Canadian domestic politics to become more resistant to American threats. The smaller side is more exposed in the relationship, so it is more concerned about it, but it is also defending its autonomy, identity, and core interests. Whereas the bigger side—what does Trump get from annexing Canada? One more state and presumably some natural resources—those are marginal interests.

The bigger side has marginal interests in the conflict, while the smaller side has vital interests in any conflict. And even occupation of the smaller side by the larger side doesn’t guarantee victory. Look at Putin and Ukraine right now. Resistance emerges when you are pushed to the edge by occupation—it gives reasons to consolidate. What is your choice? You lose everything. What is the choice of the larger side? Continuing frustration.

So what happens? Mature asymmetric relationships are exchanges: the big country recognizes the autonomy of the smaller country, and the smaller country acknowledges the asymmetry of status that the larger country holds. Management is key to the relationship.

Let me give an illustration. Let’s contrast China’s relationship with Vietnam versus Russia’s relationship with Poland. China and Vietnam fought a war in the 1980s—so they had the most hostile relationship in this set. Russia hasn’t fought a war with Poland since the 1940s. But China has respected Vietnamese autonomy and developed the relationship. Vietnam, though very concerned about China, has cooperated with China and does not threaten China’s relationships with Southeast Asia. So China and Vietnam have a mature, asymmetric relationship. Russia, because of the pressure it has put on Eastern Europe, has a hostile relationship with Poland.

Both countries, Vietnam and Poland, have a sense of resistance to larger countries, but Vietnam has a positive relationship with China, while Poland has a negative relationship with Russia. This is due to how the relationships are managed.

How does that relate to the current world order? Take Japan’s relationship with the United States right now. It’s not just a question of the reliability of the American nuclear umbrella or the nuts and bolts of an alliance. It’s a question of whether the United States is really taking Japanese interests seriously, and whether it treats Japan with respect regarding its identity and interests. The Japanese are not about to abandon their relationship with the United States, but they are growing more concerned.

Every country dealing with the U.S. must wonder, as the United States recedes from a hegemonic conception of its relationship with the world, what kind of relationship will remain? Will it be simply the demanding of American interests in bilateral relationships and the abandonment of multilateral relationships? I hope not, and every other country hopes not as well.

China has proportionally improved its relationships with the rest of the world, maintaining a diplomacy that basically does not threaten sovereignty, autonomy, or core interests. That is why China has had a peaceful rise over the last 40 years, which has been an important part of its success. I hope this success continues.

If China continues to be perceived by its neighbors and the rest of the world as non-threatening—focusing not only on win-win cooperation but also on respect for the core interests, autonomy, and identity of its partners—then China’s position will continue to improve regardless of what happens with the United States.

If the United States pursued similar policies, relationships with most global powers could improve, including those with middle powers and other countries.

8. What’s the Future of Middle East Conflict?

Well, the Middle East, as far as politics and security in the region go, is the largest question mark— even larger than the Ukraine-Russia relationship. A large part of that can be attributed to the United States’ uncritical support of Israel, and Netanyahu’s pursuit, based on this uncritical US support, of domination goals that threaten the identity and core interests of Israel’s neighbors.

There are also other complicating factors. Iran has pursued an overly militaristic and alliance-driven approach toward its neighbors. I think its policies could have been better, and I believe there is Iranian leadership capable of better policies. But the general situation is certainly a terrible vortex of conflict in which bargaining seems to be off the table, and brutality has taken center stage.

I’m not sure where we are in the development of the Middle East conflict. The brutality continues, and even the medium- and long-term effects are not yet clear. Could the attacks on Iran lead to a change in Iranian policy that might be more successful? Could developments in Israeli politics lead to a post-Netanyahu situation with less brutality? Could the United States become more critical in its relationship with Israel?

October 7th, and the massacre of innocent Israeli citizens by Hamas, marked a critical point in this process. But there was already a long history of increasing desperation among Palestinians in both Gaza and the West Bank before that.

So where does it end? This is a situation of chicken-and-egg brutality. The problem with such interactions is that there is no clear endpoint. All sides need to think about what can be done to break this vicious cycle. I don’t have the answer, but I’m sure there are reasonable people—especially in Iran, though not currently leading the policy—who could make a difference. It will be interesting to see how things develop.

I tend to be optimistic. Perhaps it’s because of my readings of Confucius and others about the humanity of human beings. But I believe people will eventually see that their long-term basic interests are common with those of other humans.

Editor: LQQ