US President Donald Trump is on a mission to decisively reshape the international economic system that the country built over the past several decades. The tariffs imposed by his administration have made it evident that the US seeks to reorder the global trading system in a manner that isolates China. Treasury secretary Scott Bessent has clearly stated: “It’s not a trade war, it’s about bad actors.” No wonder then China faces a 245% tariff, while only 10% applies to other nations as they work out trade deals with the US.

The next few months could see the emergence of a US-led economic and security alliance that would replace the current international system. US negotiations with individual countries will be as much about a push for balanced trade as about a joint commitment to limit China’s reach in their respective markets.

In addition to reworking the US-Mexico-Canada Agreement, the Trump administration has prioritised negotiations with partners such as the UK, Australia, Japan, South Korea, Vietnam and India. Among these countries, Vietnam has the most unbalanced trade with the US as its exports are 10 times greater than its imports. Vietnam is also being actively courted by Chinese President Xi Jinping, as evident from his recent trip.

While the European Union (EU) is still on the sidelines, it is likely to join the alliance as it is aware of the dumping threat from China, illustrated by the invasion of State-subsidised electric vehicles. The EU is well aware that access to an........

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