

Globalization, Trump’s tariff war and APEC 2025
This speech itself is worth reading in its entirety. Here’s some of it below.
However, it is likely that the ordinary people of SE Asia and elsewhere, are going to be affected by these tariffs. There is a high likelihood that these tariffs will spark a global economic recession. US goods imports amounted to USD 3.3 trillion or about 11% of the US GDP in 2024. With Trumps tariffs levied on friend and foe alike, prices of goods in the US are going to go up an average of 10 to 15%.2 Unless there is a concomitant increase in the income of US citizens, the effective aggregate demand in the US is going to shrink significantly. This means that the demand for goods and services from both US firms and the firms exporting to the US is going to decrease by at least 10 – 15%. Given the size of the US economy, this decrease in aggregate demand is likely to set off a deep recession – perhaps in about 18 months for now.
The Malaysian government does not seem to take this possibility too seriously at present. They are forecasting a growth rate of 4.0 to 4.5% for the Malaysian economy for 2026. Progressive movements in all continents should be prepared to mount campaigns to ensure that our governments handle this recession on the basis of solidarity if it actually develops. No one must be deprived of basic needs whether it be food, shelter, medical care or education. Society must marshal its resources to ensure that no member of society is left behind.
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…That rules based order benefited the global elite and richest corporations far more than it benefited ordinary people. Consider the case of Malaysia. There are many who would call Malaysia a success story as it’s per capita GDP and health indices are better than many other countries in Asia and Africa.
Malaysia’s GDP grew 24-fold (in real terms) in the 50 years between 1970 and 2020. So, there would seem to be empirical basis for the postulate that Malaysia benefited from the rules based international order. But, if we investigate a little more deeply, we will find that :
– 60% to 70% of the Malaysian working population have to work more than 10 hours per day to make ends meet for their families.
– the prevalence of stunting for under-5 children is about 21% of the under-5 population in Malaysia. Stunting refers to heights less than the 3rd percentile of the normal range for that age bracket. It indicates long term malnutrition.
– About 40% of Malaysian graduates cannot get jobs that are commensurate with their training. They are forced to accept semi-skilled jobs at low wages or enter the gig market as motorcycle delivery riders.
– Old age poverty is a sad reality in Malaysia. About 70% of all those above the age of 65 years do not have any savings of their own and have to rely on their children or other relatives for their basic needs. (Malaysia has not yet committed to a universal old age pension scheme.)
– The younger generation is experiencing a mental health epidemic with many of them on medicines for anxiety and depression.
– Our public health care system has been chronically under-funded for the past 40 years. This has resulted in congested clinics and wards as well as inordinately long waiting times, delayed treatment and poorer health outcomes.
The problem with Globalisation based on the “Rules based order” that has been promoted all over the world since the 1980’s, is that most of the rules favour the largest corporations and the richest individuals in society. The pro-elite rules include the following
– Intellectual Property Rights provisions that have been used by the largest corporations to create monopolies and extract high rates of profit by bullying the subordinate firms in the value chains.
– “National Treatment” provisions. Many “Free Trade Agreements” require governments to give at least similar access to foreign investors as they give to local companies.
– The Investor State Dispute Settlement provision allows the biggest MNCs to haul governments to international tribunals if any aspect of government’s policies restricts the profits of the MNCs. It is considered “expropriation”.
– Unrestricted flow of capital across national boundaries. This has created a situation that has forced government to reduce tax rates for corporations and the richest individuals. This occurred both in the advanced economies as well as in the global South. In the ASEAN region for example, there has been a race-to-the-bottom in corporate taxes. Malaysia has reduced its corporate tax from 40% of profits in 1988, to its current 24% of profits. Malaysia felt pressured to do so because its neighbours also acted similarly, with Thailand’s and Vietnam’s corporate tax currently at 20%, and Singapore’s at 17%. The SE Asean countries have been reducing corporate tax in a bid to attract FDI as well as to ensure that domestic investors do not relocate to neighbouring countries.
– The “Zero Tariff Regime” of Free Trade Agreements have markedly eroded the economic sovereignty of governments. For example, the ASEAN FTA has brought the tariffs of 99% of goods traded among ASEAN countries to zero, and this FTA has the provision that tariffs can only be lowered, but never raised. As a consequence, the Malaysian government is apprehensive that raising the minimum wage for Malaysian workers might affect the competitiveness of Malaysian firms and lead to the loss of both the domestic and the exports markets to firms from other ASEAN countries.















speech continues