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Editorial | Xi’s charm offensive in Southeast Asia is perfect foil to Trump

If trade war results in stronger relations between China and neighbours, it will be an outcome that Trump may have failed to anticipate

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Cambodian King Norodom Sihamoni presents the National Order of Independence -- Grand Collar to Chinese President Xi Jinping at the Royal Palace in Phnom Penh, Cambodia, on Thursday. Photo: Xinhua

Confusion sown by the contradictory tariff actions coming out of Washington has been roiling markets and unsettling businesses looking for a semblance of policy clarity so they can build strategies to handle them.

After levying shock “reciprocal tariffs” on much of the world, US President Donald Trump has since paused tariffs for 90 days on everyone but China, which was hit by an extra 145 per cent in levies.

Suddenly on Friday the US said it would exclude smartphones, laptop computers and machines used to make semiconductors from those tariffs.

While Apple and Dell may enjoy temporary respite for their goods made in China, more pain appears to be coming. US Commerce Secretary Howard Lutnick has said those goods would eventually fall under a new “sectoral” tariff rate.

China’s Ministry of Commerce called the tech exemptions a “small step of rectification” where clearly a “big step of rectification” was required.

Whether they are “reciprocal” or “sectoral” tariffs matters little. They are still barriers to trade that will cost US consumers, spur inflation, potentially spark a global recession and ultimately lead to complete decoupling if the world’s two biggest economies do not sit down to negotiate a deal.

All this tension and uncertainty helps to explain why President Xi Jinping embarked on a timely tour of Vietnam, Malaysia and Cambodia this week aimed at strengthening ties with the Southeast Asia region.

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