MICHEL MARTIN, HOST:
Asian markets rallied this morning hours after Wall Street made an historic one-day recovery. The markets turned around dramatically yesterday after President Trump announced a 90-day pause on steep tariffs for countries other than China. President Trump says tariffs are meant to strengthen the U.S. economy long term, but analysts around the world expressed fears that the volatility could tip the global economy into recession. Among those raising alarms is a former diplomat from Singapore. Our colleague A Martínez spoke with the former permanent secretary of Singapore's ministry of foreign affairs, and that conversation was just before President Trump's tariff reversal.
BILAHARI KAUSIKAN: Slow global growth is not good for Singapore because international trade is 300 times the size of gross domestic product.
MARTIN: And Bilahari Kausikan says he doesn't think it's good for the U.S. either.
KAUSIKAN: I can't find a single economist, except perhaps those working in the second Trump administration, who thinks that tariffs will have a very positive effect on American growth in the long term. It will lead to inflation. It will lead to perhaps loss of confidence.
A MARTÍNEZ, BYLINE: Do you understand why President Trump is taking this route? Is this something that if you look at it somehow with a longer lens that maybe there is some sense to this?
KAUSIKAN: Well, if I take a very broad view, a long kind of view - right? - why was America very open and generous? I think the fundamental reason was because of the strategic imperatives of the Cold War. You open your markets generously as a strategic tool in the Cold War, in the existential struggle against the Soviet Union. Now, no Soviet Union, why should Americans continue to, to paraphrase John F. Kennedy, bear any burden, pay any price, fight any foe in order to uphold your vision of international order? I can't think of any.
MARTÍNEZ: Now, some analysts would argue that U.S. tariffs could push Southeast Asian countries to shift closer to China both economically and politically. Do you think that's likely or even possible if these tariffs continue?
KAUSIKAN: No, that's a very, very simplistic way of looking at it. It's condescending and insulting because it assumes that we are all so naive or stupid as not to know our own national interests. And it's simplistic because, you know, China itself is going to be affected by these tariffs. Domestic demand in China is soft. It's not entirely clear that it can raise its domestic demand. It's been trying for more than a decade, don't forget, and it has not had much success. So China is not going to be this great sponge that will absorb everything that we can't sell to America anymore.
MARTÍNEZ: Now, President Trump says these tariffs are about bringing manufacturing jobs back to the United States. From your perspective, is that a strategy that could work in the long run?
KAUSIKAN: You know, manufacturing left the United States for a whole variety of reasons, cheaper costs elsewhere only being one of them, right? And some manufacturing will certainly shift back to the United States. Many countries have announced quite substantive investments in the United States in the hope of getting relief from the tariffs. But, you know, it's not a question of shifting a plant or two. It's a question of shifting entire ecosystems that have grown up around particular sectors.
So even if it's going to work, it's going to take a hell of a long time, and it may not work. It will work, at best, only partially. People who know the semiconductor industry much, much, much, much better than I ever will tell me the U.S. is not ready. You don't have enough skilled semiconductor engineers or engineers of the right type. You don't have enough workers with the right skills. Now, in time, you will build that. You can build that. But that's not going to be done overnight.
MARTÍNEZ: Is it possible that if countries wind up getting into bilateral agreements with the United States on certain things that we'll just have dozens and dozens of these all around the world for specific things and not have maybe a cohesive trade plan?
KAUSIKAN: We haven't had a cohesive trade plan for a long time. The multilateral negotiations to liberalize world trade collapsed a long time ago, so you have got a whole mosaic of bilateral and plurilateral trade agreements among different groups of countries. Basically, the U.S. prefers to deal with countries bilaterally because that's where your leverage is, and Mr. Trump is an extreme example of that.
MARTÍNEZ: Bilahari Kausikan is the former permanent secretary of Singapore's ministry of foreign affairs. Thank you very much for your insights.
KAUSIKAN: Thank you for talking to me. Transcript provided by NPR, Copyright NPR.
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