From coalitions to tariffs: The US economic reset and its impact on Asia

AMID rising geopolitical tensions and economic uncertainty, President Donald Trump, like his predecessor Joe Biden, has prioritised two key economic objectives: revitalising American manufacturing and strengthening supply chains to reduce dependence on China while countering its market-distorting practices.

Yet, their strategies differ markedly. Biden leaned heavily on coalition-building and industrial policy, while Trump is doubling down on economic nationalism and protectionist measures. These contrasting approaches will shape global trade, particularly in Asia, where US policy shifts carry significant ripple effects.

Securing critical inputs: Allies vs insularity

Both administrations acknowledged vulnerabilities in supply chains for semiconductors, rare earth elements and industrial metals. Biden sought to mitigate these risks through strategic alliances, launching initiatives such as the Mineral Security Partnership and the Indo-Pacific Economic Framework to strengthen ties with partners such as Australia, India, Japan, and the European Union. This “friend-shoring” strategy aimed to reduce dependence on China without resorting to full-scale economic decoupling. At the same time, Biden’s tariff exemptions for allied nations created unintended loopholes, as firms exploited these carve-outs by routing production through third countries to maintain access to the US market.