Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Soothing East Asia's Nerves as Trump's Administration Reaffirms US Power in Asia-Pacific

Politics / US Military Apr 19, 2017 - 05:57 PM GMT

By: STRATFOR

Politics

Forecast

  • U.S. Vice President Mike Pence's 10-day tour of East Asia will focus primarily on easing uncertainty among U.S. allies about the administration's policies in the region.
  • U.S. moves to contain North Korea and compel China toward cooperation will dominate discussions in Seoul and Tokyo, though tension over the Trump administration's trade policies will loom large in both visits.
  • Indonesia and Australia will remain wary of joining U.S. initiatives that risk provoking China but also receptive to U.S. efforts to lay the groundwork for more robust defense cooperation.

Analysis

Nearly 100 days into Donald Trump's presidency, uncertainty over the direction of U.S. policy and its behavior in the Asia-Pacific continues to pervade the region, including among many of Washington's most important allies. In particular, between Trump's early calls for strategic partners such Japan and South Korea to cover more of the costs of supporting U.S. troops on their shores, his decision to withdraw the United States from the 12-nation Trans-Pacific Partnership, and his administration's recent statements and actions in response to North Korea's nuclear weapons program, Trump has helped put the typically slow-moving and carefully managed geopolitics of the Asia-Pacific in flux. In doing so, his administration has arguably opened avenues for progress on issues of longstanding concern to Washington, especially U.S.-China trade relations and North Korean nuclearization. At the same time, the White House's actions have left countries such as Japan, South Korea and Australia — traditional linchpins of U.S. strategy in the region — looking for greater stability and predictability from Washington.

During his ongoing tour of the region, which started April 15 and will end April 25, U.S. Vice President Mike Pence is seeking to project precisely that: a more stable, predictable and reliable United States. In meetings with heads of state and key lawmakers in South Korea, Japan, Indonesia and Australia, the vice president will reaffirm Washington's commitment to stability in the region and the defense of allies and partners against a range of threats, including North Korea, Chinese maritime expansion and terrorism. Likewise, in scheduled "listening sessions" with business leaders from each country — and, in particular, by formally opening the U.S.-Japanese economic dialogue with Japanese Deputy Prime Minister Taro Aso — Pence will seek to address regional concerns over Washington's trade, investment and currency policies and foreground its continued commitment to regional free trade, albeit through avenues other than multilateral pacts like the Trans-Pacific Partnership. (Notably, on April 18, Pence announced that Washington plans to review and reform the 2007 U.S.-South Korean trade pact.)

To the extent that Pence's visit is aimed at shoring up Washington's regional alliances and partnerships, the four stops of his tour share at least one common theme: the goal of countering China's expanding security footprint in the South and East China seas and, more broadly, to constrain Beijing's long-term strategy of replacing the United States as the dominant power in East Asia. But each leg of his tour will address a different aspect of this underlying imperative. Like his visit to South Korea on April 16-17, Pence's subsequent meetings in Tokyo likely will center on managing North Korea's nuclear weapons development program and, in Japan's case, checking Chinese maritime activities in the East China Sea. His meetings in Indonesia and Australia from April 20-23, by contrast, will focus on clarifying Washington's positions on regional trade and South China Sea security, while smoothing over earlier bumps in relations (in Australia's case) and offering increased defense support both for maritime and counterterrorism activities (in Indonesia's case).

Pence's Seoul Visit and the North Korean Nuclear Quagmire

Given the visibility and significance of mounting tensions on the Korean Peninsula, it is no surprise that South Korea was the first stop on Pence's tour. His visit, which comes just ahead of the expected arrival in Northeast Asian waters of the USS Carl Vinson carrier strike group and, more significantly, the North's ballistic missile test on April 15 — the 105th anniversary of the birth of North Korean founder Kim Il Sung — sought to reaffirm U.S. defense support for South Korea and signal Washington's willingness to take unilateral military action against the North if diplomacy fails. Such moves are aimed as much at compelling China to step up its own efforts to coerce North Korea as at deterring Pyongyang itself from conducting further nuclear or missile tests. Last week, the semiofficial Chinese news outlet Global Times said China would cut off oil supplies to the North (one of Beijing's most effective tools of leverage over the Kim government) if Pyongyang conducted additional nuclear tests.

But while China's tacit announcement, followed with a phone call between Trump and Chinese President Xi Jinping, signal burgeoning cooperation, however limited, between Washington and Beijing on North Korea, the situation on the peninsula is highly fraught and fluid. In particular, it remains to be seen whether the United States can compel China to throw its full diplomatic weight behind the effort to halt North Korea's nuclear weapons program. It is also unclear whether China possesses sufficient leverage to compel the North to meaningfully change its behavior.

Washington's ability to nudge Beijing toward action depends on a number of factors — in particular, what measures the White House has asked the Chinese to take toward Pyongyang and the extent to which Beijing, given its own geopolitical constraints and often countervailing interests, can or is willing to intervene. The Trump administration's threats to use military force against Pyongyang and its expected positioning of the carrier strike group near the peninsula are likely intended to undercut China's capacity to parlay its leverage on North Korea into concessions from Washington on other issues. The U.S. moves also raise the direct costs for China of continued intransigence on negotiations with Pyongyang. The prospect of an even greater U.S. defense footprint in South Korea and Japan is deeply worrisome for Beijing, independent of what happens to North Korea. China's recent statements suggest that Washington's actions have had some effect. Even so, it is questionable whether any action China takes against North Korea, short of completely cutting off the latter's economic lifelines, will deter Pyongyang from pursuing a functional nuclear deterrent. In fact, punitive actions by Beijing and increased saber rattling by the United States may only accelerate the North's nuclear weapons development efforts.

Against this backdrop, Pence's visit to Seoul served primarily as an opportunity to reaffirm Washington's commitment to the South's security and, to that end, to shore up political support within South Korea for rapid deployment of the Terminal High Altitude Area Defense (THAAD) missile defense system in the face of Chinese economic retaliation. The emphasis on the reliability of U.S. support will carry over into Pence's visit to Japan from April 18-21. But unlike in South Korea, where Washington must carefully weigh its options against the risks and costs of retaliation by China or further provocations by North Korea, the United States faces fewer such constraints in Japan. Reflecting the approach of U.S. Defense Secretary James Mattis during his February visit to Tokyo, Pence will use his time in Japan to emphasize the importance of the U.S.-Japanese alliance as foundational to regional stability. In addition, he may urge Tokyo to take on a more prominent and proactive role in maintaining security in the East and South China seas and discuss avenues for future U.S.-Japanese defense cooperation.

Looking South: Indonesia and Australia

Pence's discussions on Japan's expanding diplomatic and security roles in Southeast Asia and the South China Sea will pave the way for the second half of his trip. Conspicuously, Pence is not visiting Thailand or the Philippines, the United States' two treaty allies in Southeast Asia, but which have both been tilting slightly toward China. Nor is Pence visiting Vietnam or Malaysia, two parties to the dispute with China over the South China Sea with which the Barack Obama administration was keen to enhance defense ties. What the decision to steer clear of the front lines of the South China Sea dispute signals, if anything, is difficult to say, though the Trump administration appears to be relying increasingly on Japan's growing influence in these countries to further U.S. regional goals.

But Indonesia and Australia are increasingly pivotal players in the Western Pacific in their own right. In Jakarta, Pence will urge an inward-focused government to embrace the country's potential role as a regional counterweight to China, a unifying voice within the Association of Southeast Asian Nations (ASEAN), and a robust check on sources of maritime insecurity. And in Australia, a steadfast treaty ally of the United States, Pence will focus on smoothing over lingering uncertainties about the Trump administration's commitment to maintaining the U.S.-led economic and security architecture in the Western Pacific — doubts magnified by the famously rocky start to Trump's relationship with Australian Prime Minister Malcolm Turnbull. In particular, Pence will seek to build on the momentum of his lengthy, reportedly fruitful talks with Australian Foreign Minister Julie Bishop during her trip to Washington in February.

One important difference between Japan on one hand, and Indonesia and Australia on the other, is that where Tokyo possesses the requisite economic, diplomatic and military power to chart a strategic course openly at odds with Chinese interests, Jakarta and Canberra depend heavily on China for investment and as a market for their raw materials and finished goods. Indonesia and Australia's interests in maintaining stable, close ties with Beijing will limit their ability and desire to throw their full weight behind U.S.-led efforts to check Chinese actions in the South China Sea.

In fact, though the United States and Indonesia have ample room for cooperation on issues such as counterterrorism, Jakarta remains exceedingly reluctant to entangle itself in regional disputes, and bilateral defense ties are relatively underdeveloped because of past U.S. sanctions over the military's human rights abuses. (Jakarta's deep suspicions about Canberra's strategic intentions have also hindered development of Australian-Indonesian defense cooperation, despite a recent warming of ties.) Meanwhile, entrenched protectionist forces at home limit Indonesia's ability to diversify its trade relationships and expand its economic influence in Southeast Asia. Australia, for its part, has a geopolitical imperative to ally itself with the world's foremost naval power, but it, too, remains wary of provoking China, for example by joining U.S. "freedom of navigation operations" aimed at discrediting Chinese territorial claims in the South China Sea.

Even so, both countries have powerful incentives to keep the United States close. Though not directly involved in maritime territorial disputes in the South China Sea, Australia relies on global sea lines of communication — and the freedom of navigation through them afforded by U.S. protection — as the bedrock of its export-intensive economy. Indonesia, for its part, has stepped up efforts in recent years to defend its territorial claims in areas such as the Natuna Islands against China, as well as Malaysia and Vietnam. For Jakarta, substantially stronger defense ties with the one country capable of enforcing rules and checking Chinese expansionism in the region would be critical in a crisis.

Overall, Pence's Asia tour is unlikely to bring major policy breakthroughs. Rather, the aim of his visits is to reaffirm the fundamental continuity of U.S. power in the Asia-Pacific and to communicate that while the ways in which Washington wields its power may be subject to modification under the Trump administration, that power and influence will not diminish.

"Soothing East Asia's Nerves is republished with permission of Stratfor."

This analysis was just a fraction of what our Members enjoy, Click Here to start your Free Membership Trial Today! "This report is republished with permission of STRATFOR"

© Copyright 2017 Stratfor. All rights reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.

STRATFOR Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in