Asia looking out for signs of shift in US trade policy

Trump's protectionist stance is once again in the spotlight, as carmaker Ford Motor on Tuesday scrapped plans to build a US$1.6 billion (Sing$2.3 billion, Bt57 billion) factory in Mexico - a move announced after the President-elect criticised General Motors on Twitter for importing cars from Mexico for sales in the US.
Commentators and economists saw Trump's criticisms of US carmakers as the latest signal that his administration is poised to implement the aggressive policies he advocated while campaigning.
Trump has chosen Robert Lighthizer - a former trade official in the Reagan administration and long-time sceptic of free trade - as his US trade representative.
The incoming Republican president has also vowed to pull the US out of the Trans-Pacific Partnership, a free-trade pact signed by 12 countries - including Singapore - that together account for 40 per cent of world trade.
Economists have warned that Trump-driven trade chaos could weigh on export-dependent Asia.
“The fact that the world's largest economy is becoming increasingly inward-looking is not good for the global economy,” said DBS Bank economist Irvin Seah.
This could impact Asian economies in the short term, especially if more US companies pull back on foreign investment.
But “the US will have to realise that it is highly plugged into the global economy... Protectionism is never good for anyone”, Seah said.
Professor Andrew Delios, head of the Department of Strategy and Policy at the National University of Singapore Business School, said Ford's move to call off building its Mexico factory was likely a one-off decision and does not necessarily hint at more trade trouble ahead for Asia.
Such moves “take a tremendous amount of personal and political capital” on the part of those involved and “will occur on fronts where the political payoff is highest”, he said.
While some have raised longer- term concerns that the US could pull back from trade and investment globally, “until we see actual changes in US policies and laws, it is still far too early to say”, added Prof Delios.