US President Donald Trump came to power vowing to shake things up. It is clear from his inaugural address, the composition of his cabinet and his comments in press interviews that he means what he said. There will be seismic changes in US policies on trade, security alliances, energy and the climate — and many of these will cause ructions in Asia.

Trade will be a major risk for Asia
That the Trump administration would pull the US out of the Trans-Pacific Partnership Agreement was expected. What has shocked Asian observers though is the stridently protectionist tone of the inaugural address, whereby Trump proclaimed that “protection will lead to great prosperity and strength”. The references in his address to other countries “stealing our companies and destroying our jobs” were chilling. It is clear that more restrictions on trade are coming soon.

Apart from demanding an early renegotiation of the North American Free Trade Agreement, one of Trump’s next actions on trade will probably be measures directed against China. China will almost certainly be labelled a currency manipulator, which would help justify restrictions, beginning with anti-dumping charges and expanding to other non-tariff barriers. It is unlikely that the new American trade authorities will act only against China; other trading nations are also likely to face trade restrictions as well, especially those that have had consistently large trade surpluses with the US.