Sunday, November 12, 2017

Trump in the Philippines: The island nation with the clues to US strategy - BBC News

Trump in the Philippines: The island nation with the clues to US strategy
Karishma Vaswani
Asia business correspondent
For most Asian leaders, it would be fair to say that Donald Trump is an enigma. But could the key to understanding US objectives in the region lie with a small island nation known for its chaotic politics - the Philippines?
If you're surprised, don't be.
It's been clear for some time that the Philippines is a nation stuck between the US and China, a proxy, if you will, for the position many Asian countries now find themselves in.
While his tour has certainly been about trying to show the region that the US is to some extent still engaged in Asia, it's obvious the American president cares deeply about two issues: North Korea, and trade. And if we're honest, North Korea, is probably his most pressing concern.
So how could the Philippines unlock any solutions to what Donald Trump wants from Asia? And what does the Philippines need from the US in return?
A brief history: 'Frenemies' forever
First, history matters. You've got to know the past, to understand the present. The Philippines and the US have a long and difficult relationship starting with the Philippine-American war in 1899, which lasted three years and resulted in thousands of deaths on both sides. But the Filipinos suffered most.
The US decision to annex the Philippines was a controversial decision at best. In part it was motivated by the Age of the Empire - countries planting flags wherever they could, colonising other nations to mark as their own.
But it was also motivated by the US desire to have a strategic place in the Asia Pacific region - to protect the US mainland from invasion, and to protect US commerce.
Anti-US protesters burn effigies of President Donald Trump and Philippine President Rodrigo Duterte during a rally in Manila in September 2017Image copyrightAFP
Image caption
Filipino protesters burned effigies of Trump and Duterte earlier this month
Sound familiar?
Fast forward 100 years and not much has changed. Eventually the US granted the Philippines independence in 1946, but kept its military bases in the archipelago, ostensibly to keep an eye on what was going on in the neighbourhood.
Post-independence Philippines has had an on-off-on-again relationship with the US. Protests over what was seen as American imperialism marked the 1980s and 1990s, and the combination of anti-American sentiment as well as a natural disaster in 1991 drove some US bases to Guam and elsewhere in the region after that.
Still, the war on terror and Islamic insurgencies in the Southern Philippines and the South China Sea issue have brought the two nations closer together again - with the resurrection of temporary US military bases in the Philippines.
Philippine conflict: Duterte says Marawi is militant-free
Marawi siege: US special forces aiding Philippine army
But change is afoot in the balance of power
China changed the game when it catapulted its way to become the top trading partner for Asian countries, including the Philippines.
Beijing is also making inroads into the Philippines with its Belt and Road investments, and has pledged $9bn worth of investment there. And while the Philippines was at one point actively fighting China's claims in the South China Sea, and even took its case to an international tribunal and won, under President Duterte's watch it has basically "rolled over", says Carl Thayer, director of Thayer Consultancy in Sydney.
"No one besides Cambodia has gone as far as Duterte has to placate China," adds Mr Thayer.
So does that mean the US has lost the war for influence in the Philippines - and by proxy, Asia? Not quite, points out Mr Thayer.
"The US helped the Philippines fight the Islamic State in Marawi and that has kept them in the game." Mr Thayer has also written about how well President Duterte is playing both China and the US against one another to his advantage - a strategy other Asian leaders are likely to use as well.
This is where North Korea comes in
Cast your mind back to when Donald Trump announced via Twitter that he would stop trading with any country that does business with North Korea. As I wrote at the time, that was an unrealistic move - mainly because it would hurt the US more in the long run. But even stranger, was the reaction of the Philippines.
Trade between Manila and North Korea jumped by 170% in 2016. And when that news started making headlines, the Duterte government took measures to rectify this imbalance almost immediately by cutting off trade with North Korea.
North Korean leader Kim Jong-UnImage copyrightAFP
Image caption
Tougher sanctions follow an escalation in North Korea's nuclear threats this year
Why the rush? None of the other countries on that list jumped into action immediately, and it's not like the US was telling Manila to get its house in order.
Well, one reason is that the Philippines wanted to make sure it was on the right side of the UN sanctions, and that none of the money Pyongyang was making from Philippine trade, was being ploughed back into the weapons industry.
But a more pragmatic reason goes back to trade: the Philippines does at least $8bn worth of trade with the US every year in comparison to the $53m with North Korea, so it's far too much of a risk not to do what the US wants.
Donald Trump to North Korea: "Do not try us"
What's life like on the border of North Korea?
What does Asia want from Donald Trump
Still, it was interesting to hear an emotional appeal recently from President Duterte about North Korea's Kim Jong Un: "If somebody could just reach out, talk to him and say, 'My friend, why don't you just join me in the table and we'll just talk about things?" It's unlikely President Trump will see things the same way.
So there is still common ground
One thing the Philippines and the US may well agree on though, is their perspective on matters of human rights. While the Obama administration was critical of President Duterte's war on drugs, in contrast President Trump has said he is going to the Philippines because it is "a strategically important place", and a US official has said that the two leaders share a "warm rapport".
Thousands have been killed since President Duterte launched his war on drugs last year
They're often compared to one another, because of their larger than life personalities, and their blunt manner. In return for support on North Korea, President Trump is unlikely to press hard on human rights and extrajudicial killings in the Philippines as his predecessor did - and that will suit President Duterte just fine.
So as you can see, the Philippines and the US have a symbiotic relationship.
It's not just because the two nations are democracies, historical allies (despite their long and difficult past) and that their two leaders share interesting personality quirks.
It's because they are strategically and symbolically wedded to one another, and the Philippines has increasingly become a bellwether for America's position in Asia.

Statement on status of Tax Foundation response to Equitable Growth critique -Washington Center for Equity growth

Statement on status of Tax Foundation response to Equitable Growth critique
November 10, 2017
Yesterday, in the context of the Tax Foundation’s score of the Tax Cuts and Jobs Act, the Washington Center for Equitable Growth published a partial critique by Greg Leiserson, Director of Tax Policy and Senior Economist, of the model the Tax Foundation uses to project the macroeconomic impact of tax legislation. We provided a copy of the analysis to Tax Foundation staff on Wednesday, November 8, the day before its release.
This critique made two key arguments:
The Tax Foundation appears to incorrectly model the interaction between federal and state corporate income taxes, thus overstating the effect of statutory rate cuts.
The Tax Foundation appears to treat the estate tax as an annual property tax paid by businesses, which results in inflated estimates of the effect of repealing the tax.
As noted in the original, this critique did not attempt a complete assessment of the Tax Foundation model, which would be impossible without greater knowledge of the equations that make up the model.
The Tax Foundation has since acknowledged that the interaction between federal and state corporate income taxes in its model is incorrect and stated that the flaw will be addressed. Accordingly, the organization reduced its projected growth figure for the Tax Cuts and Jobs Act. We appreciate the Tax Foundation’s prompt attention to this issue. Leiserson has provided additional technical assistance to help with the changes to the model necessary to correct the problem.


In addition, the Tax Foundation indicated that staff would be putting out a longer response that would provide greater detail on the modifications it made to the model in response to Leiserson’s first critique and would address the second issue he raised. As this latter issue potentially has an effect on the growth estimate of nearly 1 percent of gross domestic product, any changes could substantially affect the results of its analysis of pending tax legislation. We look forward to this additional analysis.

The Tax Foundation’s score of the Tax Cuts and Jobs Act - Washington Center for Equity Growth

The Tax Foundation’s score of the Tax Cuts and Jobs Act
By Greg Leiserson November 9, 2017
Update: The Washington Center for Equitable Growth has issued a statement regarding the Tax Foundation’s response to this critique.
The Tax Foundation last week released an analysis estimating that the recently released Tax Cuts and Jobs Act would increase U.S. Gross Domestic Product by 3.9 percent.1 The Trump administration and congressional Republicans have made it clear that they will justify their new tax proposals in large part on the basis of claims about economic growth and an associated increase in incomes, and proponents of the legislation immediately seized upon the Tax Foundation’s estimates as support for their claims. This note identifies two issues in the Tax Foundation’s analysis that suggest its estimated increase in GDP is probably substantially overstated.
First, the Tax Foundation appears to incorrectly model the interaction between federal and state corporate income taxes, thus overstating the effect of statutory rate cuts. Second, the Tax Foundation appears to treat the estate tax as a nondeductible annual property tax paid by businesses, which results in inflated estimates of the effect of repealing the tax. Appropriately addressing the issues raised in this note could reduce the Tax Foundation’s estimate of the increase in GDP that would result from the legislation to 1.9 percent—a reduction of roughly half—even if there are no other issues with the Tax Foundation’s estimates.
There is substantial uncertainty in this estimate of the GDP impact that would be generated by a revised version of the Tax Foundation model since it depends on an attempt to approximate the results of a model for which only partial documentation is publicly available. The estimate that would be generated by a revised model could be larger or smaller than this value.
Nonetheless, the significance of this difference raises important questions about the reliability of the Tax Foundation’s estimates. Critical assessment of the Tax Foundation’s analysis is particularly warranted, as some legislators have suggested that they might consider dynamic scores from organizations other than the nonpartisan Joint Committee on Taxation—the traditional source of nonpartisan estimates of congressional tax proposals—in determining the budgetary effects of the legislation.
This note does not attempt a complete assessment of the Tax Foundation model, which would be impossible without greater knowledge of the equations that make up the model. The criticisms raised in this analysis are based on inspection of publicly available estimates and documentation, as well as communication with Tax Foundation staff.2
The Tax Foundation appears to incorrectly model the interaction between federal and state taxes, inflating the effects of changes in the statutory corporate rate
The Tax Foundation model assumes that there is a fixed return required by investors. The long-run capital stock is set equal to the level at which a $1 increase in investment yields a pretax return sufficient to generate exactly that fixed required return after taxes. In computing the taxes on this $1 increase in investment, the Tax Foundation uses an estimate of the effective marginal tax rate on new investment.
It is well understood that the effective marginal tax rate on new investment can differ substantially from the statutory tax rate on business income. For example, in the case of a business tax system that allows full expensing—a policy under which businesses may deduct the full cost of any investment in the year the expense is incurred—the business-level effective marginal tax rate is zero, regardless of the statutory rate.3
Given this general finding, it is surprising that estimates generated by the Tax Foundation model suggest large effects of reductions in the statutory corporate rate, even after adoption of full expensing. The Tax Foundation’s estimates of House Republicans’ “Better Way” tax plan, for example, suggest that even after adopting full expensing and repealing the estate tax, reducing the corporate income tax rate from 35 percent to 20 percent would increase the size of the economy by 1.7 percent.4
A more recent Tax Foundation analysis concluded that full expensing for C corporations would increase GDP by 3 percent, a reduction in the statutory corporate rate from 35 percent to 20 percent would increase GDP by 3.1 percent, and both policies together would increase GDP by 4.5 percent.5 This analysis thus suggests not only a large effect of statutory rate cuts on top of expensing, but also finds that a 15 percentage point reduction in the corporate rate would have a larger effect than full expensing. This result is surprising, as expensing would be expected to have an effect roughly equivalent to reducing the statutory corporate rate to zero in a model like that used by the Tax Foundation.
These results are unusual for a model that determines the capital stock based on the effective marginal tax rate on new investment. Changes in the statutory rate could have an effect on the economy independent of the effective marginal tax rate in a model that assumes shifting of real economic activity across borders in response to changes in statutory rates. The Tax Foundation model, however, does not appear to include this channel, so this cannot explain the results.6
Another potential reason for the large effects of the statutory rate reduction could be that the Tax Foundation might compute effective marginal tax rates on intellectual property using a different methodology than for other types of assets. Some analysts have suggested that traditional effective marginal tax rate computations are inappropriate for intellectual property because the nature of such investments differs. But there is no indication that the Tax Foundation has chosen this approach.7
One factor that may partially explain these unexpected results could be that the Tax Foundation’s estimates of proposals to provide full expensing do not include expensing of inventories. If this is the case then proposals to reduce the statutory corporate rate would reduce the effective marginal tax rate on inventories, yet proposals for full expensing would not. As inventories account for less than 10 percent of the corporate capital stock, this could have a modest but noticeable impact on the results.8
In response to an inquiry about the growth from cutting the statutory rate, even after enacting expensing and repealing the estate tax in the “Better Way” plan, Tax Foundation staff attributed this growth to interactions between the federal corporate income tax and property, excise, and state and local taxes. On its surface, this does little to resolve the mystery, as state and local taxes are generally deductible from federal corporate income taxes, and the deductibility of such taxes would seem likely to moderate or eliminate most interactions.9 A recent paper from the Tax Foundation, “Measuring [the] Marginal Tax Rate on Capital Assets,” offers a potential explanation for why the Tax Foundation’s model might generate this surprising interaction.10
Specifically, the formula in this paper for computing the service price of capital—the pretax return gross of depreciation required for an investment to yield the required after-tax return—appears to suggest that federal corporate taxes are deductible from state corporate taxes when determining the value of depreciation allowances, but also that federal corporate taxes are not deductible from state corporate taxes when determining the rate at which profits are taxed.11
This apparent inconsistency would inflate the estimated tax rate on investments by undervaluing the depreciation deductions to which a business is entitled. More importantly, it would create a potentially spurious interaction that would cause reductions in the statutory corporate tax rate to reduce the effective marginal tax rate in the model—even when no such effect exists in practice. It would also likely cause the model to understate the growth impact of expensing.
To get a rough sense of the quantitative significance of this interaction, assume that the Tax Foundation’s recent estimate of the growth impact of expensing for C corporations and a 20 percent corporate rate is an approximately valid estimate for the impact of a proposal to expense capital investment including inventories. (This assumption is likely not precisely correct. Expensing of inventories would tend to increase the estimate and the potentially spurious interaction with state and local taxes likely could increase or decrease it depending on other details of the model.)
In models like that used by the Tax Foundation in which the effective marginal tax rate drives economic behavior, reducing the statutory corporate rate to zero would tend to yield the same result as providing full expensing. Thus, a rough estimate of the impact of reducing the statutory rate would be the ratio of the proposed reduction in the statutory corporate rate to the current statutory rate multiplied by the economic impact of full expensing including inventories. This suggests an estimate of the GDP impact of reducing the statutory corporate tax rate from 35 percent to 20 percent of 1.9 percent, rather than 3.1 percent.
This approximation for a revised estimate of the impact of reducing the statutory rate from 35 percent to 20 percent in the Tax Foundation model is subject to several sources of uncertainty. First, it assumes that the diagnosis of a spurious interaction between federal corporate taxes and state corporate taxes in the Tax Foundation model is correct. Second, it uses the Tax Foundation’s recent estimate of the impact of full expensing for C corporations and a 20 percent corporate rate as an estimate of the impact of full expensing including inventories. This could be understated if the impact of expensing inventories on GDP is particularly large, due to the impact of the federal-state interaction on the growth impact of expensing, or due to other interactions with the corporate rate such as that discussed in the next section. Third, it uses a linear approximation for the relationship of the rate cut proposal to a full expensing proposal, which likely slightly overstates the adjustment.
Notwithstanding this uncertainty, using this estimate of the increase in GDP from a reduction in the statutory rate from 35 percent to 20 percent would reduce the growth effect from 3.9 percent to 2.7 percent, a reduction of about one third. Even if the appropriate adjustment is somewhat overstated, it would still reflect a substantial change in GDP. Notably, this potentially spurious interaction would appear to affect any estimate generated by the Tax Foundation model for proposals that change the corporate tax rate—not only its estimates of the Tax Cuts and Jobs Act.
The Tax Foundation appears to treat the estate tax as an annual property tax paid by businesses, which would overstate the effects of repeal
As noted above, the capital stock in the Tax Foundation model is set at the level at which a $1 increase in investment yields a pretax return sufficient to generate a fixed return required by investors. In computing the tax rate for this computation, the Tax Foundation appears to incorporate a cost associated with the estate tax that would be equivalent to treating the estate tax as an annual nondeductible property tax paid by businesses.12 The tax rate appears to be based on a measure of the average estate tax liability divided by the capital stock, which is then grossed up to reflect a marginal rate.13
Treating the estate tax as a property tax paid by businesses would not be an accurate description of the practical operation of the tax. The estate tax applies to the transfer of personal estates with a value of more than roughly $11 million at death for couples.14 If this is, in fact, the modeling assumption adopted in the Tax Foundation model, it would seem to suffer from several flaws.
First, the Tax Foundation model is a model of homogeneous capital. In other words, there is nothing unique about assets held by one business relative to those held by others or about the capital provided by one investor relative to another.15 If capital is homogeneous, then there is no reason the marginal supplier of capital would necessarily be subject to the estate tax at all. Indeed, the underlying assumption of the model appears to be not only that increases in investment financed by increases in saving are uniform (in percentage terms) across the population, but also that they translate into increases in assets held at death, which also need not be true.16
Second, as noted above, the Tax Foundation assumes a fixed required rate of return. The assumption that there is a fixed rate of return required by investors is often referred to as the small open economy assumption and is justified on the basis that there is a global pool of capital ready and willing to finance profitable investments in the United States. Tax Foundation staff have endorsed this label and justification in descriptions of their model.17 Yet assuming that foreign investors are the marginal source of finance can dramatically change the effects of the tax system on the economy. In the extreme case in which capital is perfectly mobile across countries—the assumption made by the Tax Foundation—investor-level taxes in the United States that do not apply to foreign investors become irrelevant to the determination of the capital stock.18
While there are cases in which foreign residents are subject to the U.S. estate tax, there are numerous ways for foreigners to avoid the tax through planning or careful selection of assets. There is no compelling reason to think that in a small open economy model, foreign residents would treat the U.S. estate tax as fully marginal in their decision-making.
Third, this modeling approach appears to treat the estate tax as a nondeductible tax for the purposes of business income taxes.19 If the tax is nondeductible, then businesses must not only pay the estate tax but also corporate income tax on the additional return they earn to cover the estate tax. This modeling assumption would appear to create spurious interactions between different taxes. Suppose, for example, the United States adopted full expensing at both the federal and state levels. Corporate income taxes would then not affect the rate of return on an investment. But because the Tax Foundation model appears to treat the estate tax as a nondeductible tax, the statutory corporate tax rate would still discourage investment because it would increase the effective estate tax rate. Thus, even if the U.S. estate tax did affect the effective marginal tax rate in a small open economy model, the modeling approach would still appear to be inappropriate.
In the context of the Tax Cuts and Jobs Act, the Tax Foundation estimates that repealing the estate tax would increase GDP by 0.9 percent.20 But if this estimate is based on a decision to model the estate tax as a property tax paid by businesses, then this result is likely inappropriate. In a small open economy model with homogeneous capital, zero would probably be a more appropriate estimate. Reducing the impact of estate tax repeal from 0.9 percent to zero would represent a roughly 25 percent reduction in the growth effects of the plan.
It is important to note that the estate tax could, at least in theory, have important effects on the level of output in models that reject other assumptions of the Tax Foundation’s model. But this would require more substantial changes to the Tax Foundation model that would have significant consequences for estimates of the effect of other policies. In a closed economy model, for example, it might be reasonable to assume that some portion of the additional savings necessary to finance an increase in investment would come from wealthy families subject to the estate tax. Or, as another possibility, recognizing the heterogeneous nature of capital and the frequency of company founders and their heirs among the wealthiest Americans, one could argue for impacts based on indirect taxation of new businesses. Yet pursuing this latter approach would require a more significant recognition of the estate tax as a burden on labor rather than capital than the Tax Foundation’s current marginal tax rate computations suggest.
Conclusion
This note is far from a complete assessment of the Tax Foundation model, and conducting such an assessment would be challenging given the limited information publicly available about the model. Nevertheless, this note concludes that the Tax Foundation’s model probably includes at least two important flaws. Addressing these two flaws could reduce the Tax Foundation’s estimates of the growth impact of the Tax Cuts and Jobs Act roughly in half. The significance of this change raises substantial questions about the reliability of the Tax Foundation’s estimates of economic growth and suggests that policymakers should be skeptical of the results, especially when considering substituting these estimates for those from traditional legislative scorekeepers at the nonpartisan Joint Committee on Taxation.

Trump to Asia: Unite on North Korea, but Go It Alone on Trade - New York Times

Trump to Asia: Unite on North Korea, but Go It Alone on Trade
By MARK LANDLERNOV. 11, 2017
DANANG, Vietnam — President Trump has issued two starkly contradictory calls on his trip to Asia this past week: The nations of the world must rally behind the United States to confront the nuclear threat from North Korea, but they should expect America to go its own way on trade.
Reconciling those messages will be hard, and it may determine the near-term fate of the United States as a Pacific power.
In South Korea on Wednesday, Mr. Trump put on the mantle of a superpower leader. In a speech that crackled with the urgency of a Cold War manifesto, he told lawmakers there, “It is our responsibility and our duty to confront this danger together, because the longer we wait, the greater the danger grows, and the fewer the options become.”
Two days later, in the Vietnamese resort city of Danang, where American troops once came ashore to fight Communist insurgents, Mr. Trump reverted to the protectionist themes of his presidential campaign. “There is no place like home,” he told Pacific Rim leaders, warning them that the United States would never again sign a regionwide trade agreement.
At one level, the contradictory messages illustrate Mr. Trump’s transactional approach to statecraft — one that prizes individual victories over a unified theory of America’s role in the world. That pragmatism is also reflected in his singular brand of leader-to-leader diplomacy.
From Tokyo to Beijing, Mr. Trump has played the dealmaker with foreign leaders, flattering them personally even as his administration pushes hard-edge views on economic issues.
But the contradictions also reflect a more fundamental disarray in the presidency’s policy toward Asia. It seems caught between the geopolitical realism of Mr. Trump’s diplomats and the economic nationalism of his political aides.
These competing impulses have left allies and adversaries alike confused about America’s motives and staying power. Over time, several experts said, the balancing act will be impossible to maintain.
Already with China, Mr. Trump has had to soft-pedal his ambitious trade agenda in an uphill effort to persuade President Xi Jinping to do more to press the neighboring North Korean government.
With the smaller nations of Southeast Asia, Mr. Trump may feel less pressure to compromise. His comments in Vietnam lacked the solicitous tone he had used in China and Japan, veering into the defiant populism he used on the campaign trail. Yet his go-it-alone message could drive these countries further into the orbit of China, which has moved at this meeting of Pacific leaders to fill the vacuum left by the United States.
“The region is looking for a robust American presence, not just on security but on trade,” said John Delury, an associate professor of Chinese studies at Yonsei University in Seoul, the South Korean capital. “For Trump to come with an ‘America First’ agenda leaves Asian leaders in the lurch.”
Mr. Trump, right, with other leaders at the Asia-Pacific Economic Cooperation Economic Leaders’ Meeting in Danang, Vietnam, on Saturday. Credit Pool photo by Jorge Silva
Jeffrey A. Bader, a former China adviser to President Barack Obama, said Mr. Trump’s words would make Asian leaders “feel that the U.S. is less of a factor in the region.”
“They’re always looking for hedges against local bullies, like China,” he added, “and the U.S. is much less of a hedge.”
Indeed, Mr. Trump was the odd man out at this meeting of the Asia-Pacific Economic Cooperation forum. The other 20 leaders formally endorsed the idea of a liberal trade regime, arbitrated by the World Trade Organization, and condemned moves to erect new barriers.
“We recognize the work of the W.T.O. in ensuring international trade is rules based, free, open, fair, transparent, predictable and inclusive,” the members wrote in their joint statement released on Saturday, using language that American negotiators had reportedly resisted.
On Friday, Mr. Trump railed against the W.T.O., accusing it of treating the United States unfairly. Rather than uphold principles of free trade, he said, it contributed to a systematic exploitation of Americans, in which “jobs, factories and industries were stripped out of the United States.”
While Mr. Trump vowed never to sign a regional trade deal like the Trans-Pacific Partnership, from which he withdrew the United States early in his presidency, the remaining 11 members of that deal agreed on Saturday to press on with it, creating a “broader free-trade area” across Asia that will pointedly exclude the United States.
As the Pacific leaders gathered here on Saturday, much of the attention focused on whether Mr. Trump would meet with President Vladimir V. Putin of Russia.
The White House steered clear of a formal meeting, though the two men conferred briefly. The United States and Russia later issued a joint statement on Syria that reaffirmed previous commitments to defeat the Islamic State and to untangle conflicts between their respective forces on the Syrian battlefield.
Until Saturday evening, when Mr. Trump unloaded to reporters on Air Force One about Mr. Putin and the investigations into Russian election meddling, this trip had been a surprisingly disciplined exercise for the president.
With a jam-packed schedule, he had tweeted sparingly and kept generally on message. The White House cut down on unscripted moments, limiting media access and acquiescing to the Chinese reluctance to allow questions after his joint statements with Mr. Xi.
But Mr. Trump let loose on Sunday morning, when he fired back at North Korea’s leader, Kim Jong-un, after North Korean state media disparaged him as a “lunatic old man.”
“Why would Kim Jong-un insult me by calling me ‘old,’” Mr. Trump said on Twitter, “when I would NEVER call him ‘short and fat?’ Oh well, I try so hard to be his friend.”
Donald J. Trump @realDonaldTrump
Why would Kim Jong-un insult me by calling me "old," when I would NEVER call him "short and fat?" Oh well, I try so hard to be his friend - and maybe someday that will happen!
11:48 AM - Nov 12, 2017 · Vietna
Mr. Trump had avoided ridiculing Mr. Kim personally during this trip, though he listed a catalog of North Korea human rights abuses during a speech in Seoul, which drew the angry response from North Korea.
While in Beijing, President Trump lavished praise on President Xi Jinping, only to criticize China’s trade practices a day later in Vietnam. At a news conference on Sunday, Mr. Trump also said that he was open to being friends with Mr. Kim. “Strange things happen in life,” he said on a podium next to Vietnam’s president, Tran Dai Quang. “It’s certainly a possibility. If that did happen, it would be a good thing for — I can tell you — for North Korea, but it would also be good for lots of other places, and it would be good for the world.”
Throughout the trip, his face-to-face meetings with leaders have been harmonious — even leaders, like President Moon Jae-in of South Korea, with whom he has differences. That is in keeping with Mr. Trump’s pattern throughout his presidency, though it was perhaps never as striking as in Beijing, where he lavished praise on Mr. Xi, only to criticize China’s trade practices a day later in Vietnam.
“There is some value in treating counterparties with respect, in trying to build relationships with them, despite the distasteful nature if it,” said Mr. Bader, the former Obama official.
But if Mr. Trump’s stops in Northeast Asia were aimed at building a coalition against North Korea, his swing through Southeast Asia seemed calculated to remind people that he has little use for the post-World War II concept of the United States as global leader.
At moments, his speech in Vietnam had the tub-thumping atmosphere of one he may have given in Pennsylvania or Wisconsin. When a member of the audience broke into applause after he accused countries of not opening their markets to American goods, a sardonic Mr. Trump exclaimed: “Funny. They must have been one of the beneficiaries.”
Administration officials framed the speech as a chance for Mr. Trump to promote a “free and open Indo-Pacific,” which the White House has embraced as its answer to Mr. Obama’s “Asia pivot.” But the president put little meat on the bones, emphasizing the sovereignty and independence of nations over common interests or universal rights.
“Human rights are, in essence, an international agreement,” said John Sifton, the director of Asia advocacy for Human Rights Watch. “When he talks about trade in those terms, it suggests that he doesn’t hold the multilateral legal system in very high regard — and that’s frightening.”
Human rights groups, Mr. Sifton said, were focusing their energies on lobbying Canada and Japan rather than the United States.
Chinese leaders do not dwell on human rights either, to say the least. But Mr. Xi came to Vietnam primed to take over some of the ground usually commanded by the American president. During his speech, which came right after Mr. Trump’s, he declared, “Opening up will bring progress, and those who close down will inevitably lag behind.”
In the absence of an alternative sales pitch from the United States, experts said, China will inevitably make further gains.
“China has made significant inroads in cultivating Southeast Asia,” said Tang Siew Mun, head of the Asean studies center at the ISEAS-Yusof Ishak Institute in Singapore. “This isn’t an entirely bad proposition for the region, but China’s success is disastrous for the U.S., as Chinese advances are at the U.S.’s expense.”
“At the end of the day,” Mr. Tang said, “‘America First’ may devolve into the U.S. being home alone.”