Trump’s Zero-Sum Diplomacy

Trump’s first Asia diplomacy tour in his second term has confirmed that his reciprocal tax war has been effective. He sees it as a zero-sum game in which he, the winner, takes all. Trump has boasted for years in his ability to negotiate a deal and even wrote a book about this, The Art of the Deal. Now, it appears that on this regional visit he has successfully weaponised tariffs as a bargaining chip.

While visiting South Korea for the APEC summits, he was successful in securing billions in landmark deals, including initiatives to support American jobs, further America’s energy dominance, promote American leadership in the technology revolution and build a maritime partnership.

Moreover, Korean Air has agreed to purchase 103 new Boeing aircraft valued at USD 36.2 billion, supporting up to 135,000 jobs across the United States. To power these new aircraft, Korean Air will also purchase state-of-the-art GE Aerospace engines in a separate deal valued at USD 13.7 billion. Also, the ROK Air Force selected L3Harris Technologies to develop its new Airborne Warning and Control aircraft in a USD 2.3 billion deal that will support over 6,000 American jobs. Not only that, America’s ReElement Technologies and POSCO International will partner to launch a US-based, vertically integrated rare earth separation, refining and magnet production complex focused on high-value mobility magnets.

In the energy sector, the Korea Gas Corporation (KOGAS) signed agreements to purchase about 3.3 million tons/year of American LNG via long-term agreements with sellers, including Trafigura and TotalEnergies. Meanwhile, Centrus Energy Corp, KHNP and POSCO International Corporation agreed to support the expansion of Centrus’ uranium enrichment capacity in Piketon, Ohio, creating 3,000 jobs in the United States.

The President has also secured from the Republic of Korea (ROK) investments to modernise and expand the capacity of American shipbuilding industries through investments in US shipyards and America’s workforce. HD Hyundai and Cerberus Capital Management will partner on a USD 5 billion investment program for modernising American shipyards, strengthening supply chains and applying new technologies like autonomous navigation, digitalization and automation.

Samsung Heavy Industries and Vigor Marine Group will cooperate on naval vessel maintenance, repair, overhaul (MRO) as well as shipyard automation and construction of US-flagged vessels while Hanwha Ocean announced a USD 5 billion infrastructure plan to strengthen Pennsylvania’s Philly Shipyard workforce and increase its current production capacity by more than ten-fold.

It appears President Trump’s state visit to the Republic of Korea (ROK) has reaffirmed the steadfast alliance between the United States and the ROK while advancing US economic interests—delivering tangible benefits for the American people.

On his visit to Japan after the ROK, President Trump announced some major projects advancing Japan’s previous USD 550 billion investment commitment to the United States to further revitalise the US industrial base. The new prime minister, Sanae Takaichi, and Trump signed a landmark critical minerals agreement while Trump also secured historic purchases of US energy, and they agreed to increase US-Japan cooperation in combating illegal drug trafficking.

While in Tokyo, President Trump and Japan’s Prime Minister Sanae Takaichi conducted a signing ceremony memorialising the US-Japan Framework Agreement. As part of this agreement, Japan and various Japanese companies outlined their commitments to pursuing the following investments in Critical Energy Infrastructure Investments, investing as much as USD 332 billion to support critical energy infrastructure in the United States, including the construction of AP1000 and small modular reactors (SMRs) in partnership with Westinghouse; the construction of SMRs in collaboration with GE Vernova and Hitachi; the supply of large-scale baseload power infrastructure from ENTRA1 Energy; engineering, procurement and other services to build critical power plants, substations and transmission systems in collaboration with Bechtel and Kiewit; other services for design, procurement and maintenance of large-scale power infrastructure in collaboration with SoftBank Group Corp; and natural gas transmission and power infrastructure services in collaboration with Kinder Morgan.

The agreement also includes providng up to USD 25 billion in large-scale power equipment such as gas turbines, steam turbines and generators for grid electrification and stabilization systems, including high-voltage direct current and substation solutions for mission-critical facilities in partnership with GE Vernova. They also said they would invest up to USD 25 billion to supply electrical power modules, transformers and other power-generation substation equipment in collaboration with Toshiba and at least USD 20 billion to supply thermal cooling systems and solutions, including chillers, air handling systems and coolant distribution units essential for power infrastructure in partnership with Carrier.

On AI Infrastructure Investments, they will spend up to USD 30 billion in partnership with Mitsubishi Electric to supply power station systems and equipment for data centres, up to USD 25 billion in collaboration with TDK for advanced electronic components and power modules and up to USD 20 billion with Fujikura to supply optical fibre cables.

On Electronics and Supply Chain Investments, Japan agreed to invest up to USD 15 billion to produce advanced electronic components, including multilayer ceramic capacitors, inductors and electromagnetic interference suppression filters in partnership with Murata Manufacturing and as much as USD 15 billion to supply energy storage systems and electronic devices and components in collaboration with Panasonic.

On Critical Minerals Investments, they said they will invest as much as USD 3 billion to construct an ammonia and urea fertiliser facility in the United States and USD 2 billion to construct a copper smelting and refining facility in the western US.

On defence, the United States welcomed Japan’s commitment to significantly increase their defence capabilities. This commitment supports the US-Japan Alliance’s goal of peace through strength by rapidly strengthening deterrence in the Indo-Pacific. Trump said the United States would accelerate deliveries of Advanced Medium-Range Air-to-Air Missiles for Japan’s F-35 fighter jets, with the first deliveries coming soon, to enhance their deterrence and burden sharing in the First Island Chain. Both nations agreed to enhance cooperation through intelligence-sharing, risk profiling and operational collaboration, and they announced plans to amend their Customs Mutual Assistance Agreement (CMAA) to prevent, investigate and repress customs law violations.

However, experts have said the deals that Trump sealed with several trading partners could have a “mixed blessing”, with the long-term economic costs potentially outweighing the short-term trade benefits if Washington maintains the 19 to 20% tariffs it has imposed on all countries.

For ASEAN, Malaysia, Thailand, Cambodia and Vietnam, the deals Trump agreed to offer greater short-term market access to the US, but they do not significantly alter a global trade landscape dominated by tariffs and non-tariff barriers. The four countries “now face increased imports of US agricultural and industrial products as well as energy commitments that favour American exporters by opening more market access for US exporters and investors,” said Vu Lam, a policy analyst and ASEAN observer.

Lam called the agreements with Trump “more a tactical respite than a transformative shift, providing some immediate gains but falling short of a deeper, long-term economic reset for the region.”

In addition, Joanne Lin, a senior fellow and coordinator at the ISEAS-Yusof Ishak Institute’s Asean Studies Centre, said that the tariff concessions may look like good news on the surface, especially for export-driven economies like Vietnam, Malaysia and Thailand that rely heavily on access to the US market, but they do come with strings attached.

Hence, this is all why at first sight Trump’s regional visit seems to many to have been a winner takes all outing for the US.

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