US President Donald Trump boarding Air Force One in March. The  president will be making a trip to Asia in November. Photo: AFP, Mandel Ngan
US President Donald Trump boarding Air Force One in March. The president will be making a trip to Asia in November. Photo: AFP, Mandel Ngan

The US administration is ramping up pressure on India, Japan and Australia to put up a trade and security cordon around China’s geopolitical advancement in Asia. This is part of President Donald Trump’s “surround and enforce” strategy to keep in check China’s power in the Indo-Pacific rim.

Trump’s trip to Asia in November is poised to show that the securitization of regional trade and investment is the key feature of the US strategy for Chinese containment.

In economics, securitization refers to the process of transforming an illiquid asset into a security through financial engineering. In the present geopolitical context of waning US influence in Asia, the illiquid asset is China’s distorted trade, and the security is an Indo-Pacific rim free from Chinese’s dominance.

Indeed, it appears that the US administration is planning to revive the so-called Asia-Pacific “Quad” security forum including also India and Australia.

The Quadrilateral Security Dialogue (QSD) was established in 2007 upon Japanese initiative much to Chinese annoyance, but soon ceased after then-Australian prime minister Kevin Rudd withdrew his country to signal a closer relationship with China.

Many things have changed in the past decade, so much so that the new Quad would go beyond maritime security cooperation also to coordinate alternatives for regional infrastructure financing to that offered by China.

It should come as no surprise that Xi Jinping’s major-power diplomacy and trade expansion are leading conservative hardliner governments in the US, Japan, India and Australia back into the Quad.

With the worst economic consequences of the Great Recession now tamed, the four democratic countries have more breathing space to come together and deal with China’s appetite for global influence.

The sense of anti-China urgency is evident in the simultaneous anti-dumping policies that the Quad countries are revving up against China. In fact recently, the US Commerce Department imposed preliminary import duties in the range of 96.81% to 162.24% on Chinese aluminum foil.

That highly anticipated US measure follows Japanese anti-dumping duties ranging from 39.8% to 53% on polyethylene terephthalate with a high degree of polymerization (HP-PET) originating in China.

At the same time, the Australian government got busy giving itself sweeping anti-dumping price-fixing power, which is telling if we consider that as of June, two-thirds of cases on hand by Australia’s Anti-Dumping Commission pertain to the steel industry, and one-third of its overall measures are in force against China.

India is also particularly active on this front, with anti-dumping duties currently in force on 93 products from China, and 40 more to come, ranging from chemicals, machinery products, steel, fibers, yarn, plastic, and electronics to various consumer goods.

China’s legal position is rather weak, as the WTO Anti-Dumping Agreement amply covers the rules and procedures being unilaterally enforced by the four Quads. It remains to be seen whether Xi Jinping will remain so congratulatory on the workings of the multilateral trading system order after realizing that the World Trade Organization law applied to the letter could be easily used against China’s industrial policy.

Trump’s Asia strategy is thus taking shape. In essence, the master plan is that the US will be facilitating a coordinated anti-dumping barrage over China’s heavy industries in exchange for maritime security with a close range of key geo-economic partners. Japan’s precarious relationship with China is urging this development, and Australia is set to cross the Rubicon on China relations. This explains why the US administration is wooing India into a game-changing alliance against China.

Trump’s surround-and-enforce China strategy supersedes and somehow sublimates his predecessor Barack Obama’s hedge-and-engage approach. To escape the perceived Thucydides trap, the US is thus accelerating toward an Asian balance of power within a new bipolar order that echoes Nicholas J Spykman‘s Rimland Theory.

Spykman was famously prescient of the Eurasian struggles in the Cold War and of the resulting rise of China in the global stage, and memorably wrote, “Who controls the rimland rules Eurasia; who rules Eurasia controls the destinies of the world.”

Dr Giovanni Di Lieto teaches international trade law in the International Business program at Monash University in Melbourne, Australia, and engages in expert analysis on the geopolitics of trade and investment for media, industry and government outlets. His professional career developed as a commercial law practitioner in Italy, and then as a global value chain specialist across the US, Europe and China.

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