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On May 20, Japan’s chief trade negotiator Ryosei Akazawa stood firm: the US must roll back tariffs on Japanese cars, car parts, steel, and aluminium. A day later, Vietnam wrapped up its second round of talks with Washington with a guarded statement about “positive progress”—diplomatic code for a long road ahead. Earlier, on May 12, China secured a 90-day tariff reprieve from the Trump administration in Geneva, reducing a staggering 145% levy to 10%, with another 20% contingent on its cooperation over fentanyl exports.

Despite the posturing from Washington, no Indo-Pacific country has truly capitulated to Trump’s tariff pressure. Trump may claim foreign leaders are “kissing my ass,” as he did on April 8, but the reality is far less triumphant.

At the heart of the matter lies a two-pronged dilemma for US allies and partners. First is Trump’s unrelenting transactionalism—viewing every trade move as a one-off, bilateral deal, stripped of strategic context. Second is the deepening geopolitical rivalry contest with China, which demands long-term policy coherence. Neither prong offers America’s partners much confidence.

The Strategic Vacuum

The Trump administration’s tariff regime raises fundamental questions about whether the US has a cohesive geopolitical strategy. While Trump’s rhetoric leans heavily on economic nationalism, his trade actions seem unmoored from any larger Indo-Pacific vision. Is Washington aiming to rebuild its manufacturing base? Or leverage trade to check Chinese influence? The signals are mixed, the strategy murky.

Even US allies are struggling to make sense of the contradictions. Trump wants foreign investment, but also derides trade deficits as signs of national weakness. He wants factories in America, but refuses to offer the kind of industrial policy needed to make that happen.

This strategic incoherence has allies hedging their bets—and in some cases, pushing back.

China’s Playbook: Long Game, Broad Market

China has shown it’s in no mood to fold. Officials in Beijing say they’ve been preparing for tariff battles for months. Meanwhile, ports across the US are bracing for a slowdown. Gene Seroka, executive director of the Port of Los Angeles, recently warned of a 10% drop in May imports—signaling ripples across warehouses, trucking, and logistics.

More tellingly, China is accelerating its pivot to alternative markets. Its grip over key supply chains, particularly in low-end manufacturing and critical minerals, remains firm. The Belt and Road Initiative (BRI) is expanding China’s reach across Asia, Africa and Latin America, providing export markets and political capital. In 2024, China’s trade with BRI countries grew 6.4% year-on-year.

While Trump focuses on punitive tariffs, he’s ignoring the broader geopolitical consequences. Countries caught in the BRI web are unlikely to abandon Beijing for Washington unless the US offers a compelling alternative—which currently doesn’t exist.

Interestingly, China’s share of the US goods trade deficit has dropped from 47.5% in 2018 to 24.6% in 2024. But this isn’t “winning.” It’s China insulating itself—bit by bit—from US pressure.

Indo-Pacific Caught in the Middle

For most Indo-Pacific nations, the US remains a vital security partner—especially in the face of China’s assertiveness. But Trump’s unpredictability is forcing hard choices.

Consider Japan and South Korea. Both are key US allies with deep economic ties to China. They’ve ramped up investments in the US—Japan pledging $1 trillion and Korea over $20 billion—while continuing to engage Beijing. South Korea is also offering joint ventures in shipbuilding, a sector the US has largely ceded.

Yet doubts persist. Trump’s calls to make allies “pay more” for US troops raise questions about America’s commitment. Defense Secretary Pete Hegseth’s reassurances—like elevating US command in Japan—are welcome, but do little to offset Trump’s erratic pronouncements.

India, too, finds itself in a delicate spot. It’s still negotiating a trade deal with the US, while managing its own tensions with China and keeping its strategic autonomy intact. Trump has tried to pressure Apple to move iPhone production back to the US, despite Apple and its suppliers doubling down on India with over $1.5 billion in new investments.

Vietnam, deeply linked to China through its supply chains, is playing it cool. It has offered concessions—like slashing tariffs and buying American LNG and Boeing jets—but it wants recognition as a market economy, a status the US is hesitant to grant. Vietnam also wants its exports to the US, especially those with Chinese components, to remain unaffected—another sticking point.

Industrial Strategy in Disarray

If Trump truly wants to reshore manufacturing, he must embrace a serious industrial strategy. But his record suggests the opposite. He’s scrapped Biden-era EV mandates, derided the CHIPS Act (which provides $52.7 billion in semiconductor subsidies), and remains sceptical of clean energy or advanced manufacturing incentives.

Rebuilding a competitive industrial base demands more than tariffs—it requires scale, capital, and time. And above all, predictability. Without it, US allies and investors won’t bite.

A Geopolitical Moment Squandered?

There’s little doubt that many countries in Asia are uneasy about China’s rise. They want the US to act as a credible counterweight—economically and militarily. But if all they get is transactionalism, tariffs, and mixed signals, they may well look elsewhere.

For now, Trump’s tariff strategy is more bluster than blueprint. It may please domestic audiences, but in the Indo-Pacific, it’s creating confusion, not clarity. Without a coherent economic and geopolitical vision, America risks squandering its leverage—and pushing its partners closer to Beijing.