What the US-China detente means for Asean businesses

THE recent one-year pause in US-China trade tensions, with the US reverting its tariffs to more manageable levels and China lifting its rare earth export bans, led to a sigh of relief across the globe.

Stock markets in the US were inching up in anticipation of the truce announced on Oct 30 after US President Donald Trump and his Chinese counterpart Xi Jinping met in South Korea. It seemed that the world economy had once again averted a large-scale jolt to the trading system.

Yet the pause – as it implies – is to buy time before next year’s review as both sides cannot afford the immediate fallout. China will continue its race to grow new markets, develop its own semiconductors and artificial intelligence (AI) capabilities, while the US will rush to identify new partnerships and investments in rare earths.