Pacific Polarity, a podcast released on June 28, featured Kurt Tong, Executive Partner at The Asia Group, in a sharp reflection on U.S. foreign policy in Asia during a conversation with podcast hosts Li Zexi and Richard Gray. Tong argued that the U.S. government is unlikely to implement tariffs at the high levels previously announced, although President Trump personally favored tariffs, he knew many Americans, including the public, did not like them, so Trump's stance had softened.

According to the introduction, Tong is a senior U.S. diplomat with about 30 years of experience, currently serving as an Executive Partner at The Asia Group. He has held key positions in the U.S. Department of State and the National Security Council, including Deputy Assistant Secretary for Economic and Business Affairs, U.S. Ambassador to APEC, U.S. Consul General in Hong Kong, and Director of Asian Economic Affairs at the National Security Council. Additionally, he was involved in designing the Trans-Pacific Partnership (TPP) and the Korea-U.S. Free Trade Agreement (KORUS FTA).

The host of the program, Richard Gray, asked whether the U.S. would adjust its overall approach to multilateral and bilateral agreements focusing on specific narrow areas, given the U.S. continuous withdrawal from free trade agreements and reduced participation in other trade mechanisms? What is the potential vision and possible scenario for future U.S. trade policy?

Tong analyzed, "I'm not sure what the final outcome will be, but I do believe that the U.S. will reach a series of bilateral trade agreements with many countries this year. I think the U.S. won't implement tariffs at the high levels previously announced, and they don't really want to do it now. They originally aimed to use tariffs to facilitate agreements. Now, the willingness to maintain high tariffs is not as strong as it was in March—before the incident—because the president found out that actually, American people don't like tariffs, and tariffs lead to inflation, which people dislike. Although Trump still favors tariffs, he knows others don't like them, so his position has softened."

"With Trump's stance becoming more moderate, and many countries still having a need to do business with the U.S., I think there will be a large number of bilateral, transactional agreements. These agreements are mainly aimed at preventing the worst-case scenarios and reducing negative impacts, rather than truly promoting economic integration or growth."

Photo of Kurt Tong

Tong also pointed out that the U.S. is a major source of foreign direct investment, securities investment, and financing, and also the largest exporter and licensor of productivity technology. These roles often complement each other—capital, technology, and management capabilities usually flow together. At the same time, the U.S. is the largest recipient of foreign investment because it is the world's largest economy and traditionally has been highly open to foreign investment. However, over the years, views on foreign investment in the U.S. political arena have been changing and contradictory.

"When people consider whether they want Fortune 100 companies to succeed, see their stock prices rise, and create more jobs in the U.S., the answer is definitely yes. These companies often say that in order to grow and succeed, they must be competitive globally, not just domestically; they need to invest overseas, produce abroad, and import some products back to the U.S., because this is more cost-effective and helps companies profit and develop."

Tong added, "But the political contradiction is: if you ask any politician or ordinary American whether they want the country's most successful companies to continue to succeed, they will say yes. If you ask them whether these companies should be allowed to freely invest in other countries and use other countries' economic growth to benefit U.S. shareholders, they will also agree. But if you ask 'Should U.S. companies build factories overseas, produce there, and sell the products back to the U.S.?' people's opinions become divided."

"You often hear the argument: 'These companies are exporting jobs abroad,' even though this is not necessarily true in most cases, but the public does have this impression. In the current political environment, the Midwest of the U.S. has become a key battleground for presidential elections, at least in the last three to four to five election cycles. Voters in these regions have been severely affected by the decline of traditional manufacturing, so the focus of U.S. politics is increasingly concentrated on the issue: do we have enough American-made products, especially traditional manufacturing? Compared to high-tech, robotics, and data-driven manufacturing, traditional manufacturing provides more jobs, not those that rely on heavy metal processing and process-oriented manufacturing."

"This brings up the political dilemma. People generally believe that most shipbuilding industries have moved to China, and the U.S. no longer engages in civilian shipbuilding, except for part of naval construction, which is bad for the U.S. Therefore, the political wind has clearly shifted, and many people advocate bringing some manufacturing back to the U.S., even if it may not be profitable or costly. After all, the U.S. is a high-income country, and workers' wages are high. Americans won't be willing to work in the U.S. for the same wage as Chinese shipbuilders, but they still want the shipbuilding industry to stay in the U.S. This is the dilemma we are facing now, which drives broad discussions on trade policies and is closely related to investment policies."

Tong concluded, from the perspective of foreign affairs, diplomats would think that foreign companies should actively and positively participate in the international relations of U.S. companies to help build a good image for the U.S. Especially when the U.S. government cuts aid budgets and adopts protectionist trade policies, these companies need to represent the U.S. and show a positive side. However, there is opposite pressure within the U.S. Therefore, the direction of U.S. policy is caught in a tug-of-war caused by the rise of protectionism and the attempt to bring investments and jobs back to the U.S.

"I don't know how it will end, but this is one of the key issues of this era. We are witnessing the evolution of U.S. policy," said Tong.

This article is an exclusive contribution from Observers, and without permission, it cannot be reprinted.

Original: https://www.toutiao.com/article/7522493107218039350/

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