‘Primitive and loutish’?
Calling Beijing might have been the smartest thing Trump has done since sending those Tomahawks flying into Syria. Xi is right; one tweet from Trump – and sending aircraft carrier Carl Vinson into the Korean Peninsula of course, – has brought the region closest to a “military clash” since ’06. Back then, Washington leveraged Beijing for a contained thaw with Pyongyang. George Bush Jr let Hu Jintao help address Kim Jong-il’s sense of isolation; and, no longer feeling pushed against the wall, Dear Leader eased out of his provocative stance. As a result the Republican White House looked away while Beijing milked the dollar peg a while longer.
But this time the Americans seem determined to wrap up this matter “with or without Chinese help”. That the Japanese were game enough to conduct military exercises as the Vinson made its way to the Peninsula may well have more than just security connotations. But with the Americans so gung-ho, the Japanese so accommodative, and the Chinese and Russians so concerned over North Korea’s missiles, has anybody given a thought to the South? In just the first few days after the American president’s tweet, the market wiped out more than $ 30 billion from South Korean equity value and drove a spike in the country’s debt risk.
Mr Market is usually dismissive of the North’s boasts around anniversary celebrations. The outside card fuelling losses this year is American involvement. Already the chest thumping has got analysts and traders going bearish on the Korean Won. And the warmth with Russia is already a thing of the past. Rex Tillerson’s ‘icy reception’ in Moscow, not to mention stern warnings against another adventure in Syria, means friction will mark the exchange for the foreseeable future, at least. Trump’s “with or without them” has eerie similarities with “with us or against us” of not so long ago. He would do well to see how that turned out. For the moment, there seems weight in another official Russian summation of American foreign policy as it seems to unfold, calling it “primitive and loutish”.
