Best of the Week
Most Popular
1. Crude Oil and Water: How Climate Change is Threatening our Two Most Precious Commodities - Richard_Mills
2.The Potential $54 Trillion Cost Of The Fed's Planned Interest Rate Increases - Dan_Amerman
3.Best Cash ISA Savings for Rising UK Interest Rates and High Inflation - March 2018 - Nadeem_Walayat
4.Fed Interest Hikes, US Dollar, and Gold - Zeal_LLC
5.What Happens Next after February’s Stock Market Selloff - Troy_Bombardia
6.The 'Beast from the East' UK Extreme Snow Weather - Sheffield Day 2 - N_Walayat
7.Currencies Will Be ‘Flushed Down the Toilet’ Triggering a ‘Mad Rush into Gold’ - MoneyMetals
8.Significant Decline In Stocks On The Cards! -Enda_Glynn
9.Land Rover Discovery Sport Extreme Driving "Beast from the East" Snow Weather Test - N_Walayat
10.SILVER Large Specualtors Net Short Position 15 Year Anniversary - Clive_Maund
Last 7 days
Time To Eliminate Your Wall Street Tax? - 20th Mar 18
The Beast from the East Snow, UK Roads Driving Car Accidents - 20th Mar 18
Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - 19th Mar 18
2018 Reversal Dates for Gold, Silver and Gold Stocks - 19th Mar 18
This Tech Breakthrough Could Save The Electric Car Market - 19th Mar 18
Stocks Set to Open Lower, Should You Buy? - 19th Mar 18
The Wealth Machine That Rising Interest Rates Create Conflict With The National Debt - 19th Mar 18
Affiliate Marketing Tips and Network Recommendations - 19th Mar 18
Do Stocks Bull Market Tops Need Breadth Divergences? - 19th Mar 18
Doritos Instant £500 Win! Why Super Market Shelves are Empty - 19th Mar 18
Bonds, Inflation & the Market Amigos - 19th Mar 18
US Housing Real Estate Market and Banking Pressures Are Building - 19th Mar 18
Stock Market Bulls Last Stand? - 18th Mar 18
Putin Flip-Flops Like A Drunken Whore On Bitcoin Cryptocurrency Legalization - 18th Mar 18
How to Legally Manipulate Interest Rates - 18th Mar 18
Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - 18th Mar 18
Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - 17th Mar 18
Strong Earnings Growth is Bullish for Stocks - 17th Mar 18
The War on the Post Office - 17th Mar 18
GDX Gold Mining Stocks Fundamentals - 16th Mar 18
Nationalism, Not the Russians, got Trump Elected - 16th Mar 18
Has Bitcoin Bought It? - 16th Mar 18
Crude Oil Price – Who Wants the Triangle? - 16th Mar 18
PayPal Cease Trading Crypto Currency Bitcoin Warning Email Sophisticated Fake Scam? - 16th Mar 18
EUR/USD – Something Old, Something New and… Something Blue - 16th Mar 18
DasCoin: A 5-Minute Guide to How It Works - 15th Mar 18
Stock Market Downward Pressure Mounting - 15th Mar 18
The Stock Market Trend is Your Friend ’til the Very End - 15th Mar 18
6 Easy Ways to Get What Women Want, for Less! - 15th Mar 18
This Isn’t Your Grandfather’s (1960s) Inflation Scare - 15th Mar 18
Eye Opening Stock Market Index, Volatility, Charts and Predictions - 15th Mar 18
Gold Cup At Cheltenham – Gold Is For Winners, Not For Gamblers - 15th Mar 18
Upcoming Turnaround in Gold - 14th Mar 18
Will the Stock Market Make Another Correction this Year? - 14th Mar 18
4 Ways To Writing An Interesting Education Research Paper - 14th Mar 18
China Toward Sustainable Economic Growth - 14th Mar 18
Stock Market Direction Is No Longer Important - 14th Mar 18
Trade Tariffs Defeat Globalists and Return Prosperity - 14th Mar 18
Stock Market Crash is Underway and Cannot be Stopped! - 14th Mar 18
Are Energy Sector Stocks Bottoming? - 14th Mar 18
Nasdaq Stocks Soars to New Record High After Strong Job Reports - 14th Mar 18
Bitcoin BTCUSD Elliott Wave View Calling for Rally toward $15,000 - 13th Mar 18
Hungary’s Gold Repatriation Adds To Growing Protest Against US Dollar Hegemony - 13th Mar 18
Record Low Volatility in Precious Metals and What it Means - 13th Mar 18
Tips for Writing and Assembling the Classification Essay - 13th Mar 18
Gerald Celente "If Rates go up too High, the Economy goes Down, End of Story" - 13th Mar 18
Stock Market Selloff Showed Gold Can Reduce Portfolio Risk  - 13th Mar 18
Silver Does it Again! Severe Consequences - 12th Mar 18
Has the Stock Market Rally Run Out of Steam? - 12th Mar 18
S&P 500 at 2,800 Again, Stock Market Breakout or Fakeout? - 12th Mar 18
The No.1 Energy Stock To Buy Right Now - 12th Mar 18
What Happens Next When Stock Market Investor Sentiment is Neutral - 12th Mar 18
Economic Pressures To Driving Gold and Silver Prices Higher Long-Term - 12th Mar 18
Labour Sheffield City Councils Secret Plan to Fell 50% of Street Trees Exposed! - 12th Mar 18

Market Oracle FREE Newsletter

Urgent Stock Market Message

Trump’s Indecision about North Korea May Cost Him Allies in Asia Pacific

Politics / GeoPolitics Oct 26, 2017 - 10:32 AM GMT

By: John_Mauldin


BY GEORGE FRIEDMAN AND JACOB L. SHAPIRO : China’s 19th National Congress of the Communist Party is getting a lot of attention right now. In the opening ceremony, President Xi Jinping heralded the beginning of a new era in China. Surprisingly, he was also very honest about the inadequacy of his first term.

Although the congress will continue into this week, most of the major events have already taken place.

Much of Asia had been in a holding pattern in the lead-up to the congress. But now that holding pattern is over, we can look ahead to some key events in the region that will have a global impact.

Japan in a Tough Spot

In Japan, Prime Minister Shinzo Abe’s coalition decisively won another term in elections over the weekend. It is a remarkable political comeback for Abe.

He has overcome some of the scandals dogging his regime and won another mandate, allowing him to continue his economic reforms and take a controversial step in revisiting its pacifist constitution. (I wrote about Japan’s geopolitical realities and its strategy in my exclusive ebook, The World Explained in Maps, which you can download here.)

Abe can thank North Korea in part for his political resurgence.

North Korea’s missiles over Japan and the inability to halt Pyongyang’s nuclear program have given Abe new life. But the important issue here is not so much Abe as it is a potential shift in Japan’s overall posture.

China admitted some of its weaknesses during the National Congress. In spite of that, Japan cannot bet that China will remain weak, no matter how difficult China’s problems are.

Further, the inability of the US to control the situation in North Korea raises hard questions for Japan. A country shielded by a US security guarantee can afford to be a pacifist nation. But a country highly dependent on raw material imports and threatened by an adversary that may soon become a nuclear power cannot.

Add to this the fact that Japan conquered much of the Asian coast in the early 20th century and treated its colonial subjects as inferiors. This leaves Japan in a tough spot.

Japan has no shortage of enemies, and it can’t count on the US to prevent North Korea from acquiring a nuclear weapon. Japan will have to fend for itself. Meanwhile, North Korea remains as recalcitrant as ever.

In the past week, Pyongyang has threatened imminent nuclear war against the United States and vowed to “mercilessly smash the war frenzy of the US and South Korean puppet warmongers” in response to US-South Korean naval drills.

This rhetoric is typical for the North Koreans. But there are some statements related to the North Korean crisis that shouldn’t be dismissed.

The CIA director recently said that North Korea was on the verge of possessing nuclear weapons capable of striking the US—and that President Donald Trump would not allow that to happen.

US Commitment to Asia

Rising tension in Asia is the reason Trump will travel to five Asian countries—Japan, South Korea, China, Vietnam, and the Philippines—in early November. It’s a fitting trip for the one-year anniversary of Trump’s election.

Trump’s visits to Japan, South Korea, and the Philippines are to demonstrate that the US is still committed to Asia, and not only because of North Korea. But photo ops won’t be enough to prove this commitment.

Japan and South Korea will want to know what the US plans to do about Pyongyang. Meanwhile, the Philippines wants to know whether it can still depend on the US to protect its interests—or whether it should cut a deal with China now while it has all the leverage.

Trump’s trip to Vietnam is proof of a fundamental premise in geopolitics: Individual leaders don’t matter nearly as much as most people think they do. A country’s foreign policy will change very little when a new president takes office.

President Barack Obama lifted an arms embargo against Vietnam during a visit to Hanoi. Now, President Trump is set to take his own trip to the communist country. The two nations may have an uneasiness toward each other because of the Vietnam War, but they share an interest in containing China. And this is more important than ideology and their historical animosity.

Trump won’t eat noodles with Anthony Bourdain on the streets of Hanoi, as his predecessor did. But like Obama, he will look to strengthen the bilateral relationship to isolate China in the region as much as possible.

This leads us, of course, to China.

It remains unclear what Trump plans to do when he meets the Chinese president on his home turf. When they last met in April, Xi agreed to help the US contain North Korea in return for the Trump administration’s backing off on its China trade policies.

Six months later, there has been no tangible progress on North Korea. More hawkish, anti-China voices in Trump’s ear have been sidelined. And now, according to Politico, the White House is reportedly conducting a comprehensive, bottom-up review of its China policy.

Rumors are swirling over what could result from Trump’s trip to China. But the only things that are certain are that the US is not getting what it wants out of China, and China cannot give the US what it wants.

Trump’s meeting with Xi won’t solve these issues. Until the US decides what it will do about North Korea, its policy in Asia will remain hostage to the regime in Pyongyang.

This plays into China’s hands and leaves other US partners looking for alternatives.

Grab George Friedman's Exclusive eBook, The World Explained in Maps

The World Explained in Maps reveals the panorama of geopolitical landscapes influencing today's governments and global financial systems. Don't miss this chance to prepare for the year ahead with the straight facts about every major country’s and region's current geopolitical climate. You won't find political rhetoric or media hype here.

The World Explained in Maps is an essential guide for every investor as 2017 takes shape. Get your copy now—free!

John Mauldin Archive

© 2005-2018 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules