U.S.-China Trade Conflict: Opportunities for U.S. Economic and Security Interests in Developing Southeast Asia



Richard Cronin | The Stimson Center


The current conflict with China over its highly restrictive trade barriers and violations of American intellectual property rights (IPRs) has created a dilemma for U.S. companies that depend on Chinese partners to manufacture goods under their labels or provide critical parts and components for their global operations. Intellectual property–copyrights, patents, trademarks, and processes–represent the “crown jewels” of U.S. high technology and are critical to maintaining our commercial and military edge against an ever more assertive Chinese challenge. President Trump’s call for U.S. companies to get out of China has intensified many companies’ ongoing efforts to reduce the role of Chinese partners in their global “supply chains.” Getting out of China requires relocating to somewhere else. The President has acknowledged that most of this production is unlikely to come home to the U.S. because of higher costs and other factors. The President and Congress can help the relocation of U.S. production to countries and regions that are strategically beneficial to U.S. security and economic interests by:

  • Using and significantly broadening the vision for the landmark October 2018 BUILD Act (Better Utilization of Investments Leading to Development) to help facilitate the relocation of U.S. companies from China to nearby Southeast Asia countries or other suitable locations.
  • Using the new International Development Finance Corporation (DFC), the main feature of the Act, to significantly support U.S. private investment in Vietnam, Malaysia, Indonesia and other developing countries in Southeast Asia through loans, loan guarantees, political risk insurance and in some cases limited equity investments for private sector projects.
  • Using the U.S. Agency for International Development (USAID), State, Commerce, Energy and other relevant departments and agencies to promote the necessary legal, policy, regulatory reforms and private sector and governmental capacity to help make potential relocation countries better able to attract and accommodate expanded U.S. manufacturing and services investment.
U.S.-China Trade Conflict_ Opportunities for U.S. Economic and Security Interests in Developing Southeast Asia _ Stimson Center

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