President Trump’s decision Monday to cancel a Pacific rim trade deal was seen here as a sign of a U.S. retreat from Asia and a boon for China, which hadn’t been included in the partnership.

The Chinese government — a longtime critic of the Trans-Pacific Partnership — opted not to gloat, however, instead signaling a cautious approach Tuesday to the new U.S. administration and concern for what comes next. While the U.S. withdrawal from the treaty could boost China’s role in the Pacific, Beijing is more preoccupied by what else the Trump administration may have planned for the region.

As a candidate, Trump made China and trade regular talking points. He vowed, among other things, to scrap the TPP, list China as a currency manipulator and slap an eye-popping 45 percent tariff on imported Chinese goods.

The TPP deal was all but dead by Monday, but the other threats still stand — and that is what is bothering Beijing.

“It could be counted as good news for China that the pressure of TPP is now gone,” said Tu Xinquan, a trade expert at Beijing’s University of International Business and Economics. “However, there is great uncertainty as to whether China stands to benefit.”

[Trump kills TPP, giving China its first big win]

Monday’s announcement was the end of a long, slow death for a trade deal that in some ways defined the Obama administration’s thwarted vision for renewed U.S. engagement in the Asia-Pacific region.

The agreement aimed to reduce trade barriers and tariffs across 12 countries, making up nearly 40 percent of the global economy, including Japan, Australia, Singapore and Vietnam, but excluding China. It also included provisions that would compel countries to comply with rules on labor and intellectual property rights, potentially spurring domestic economic reforms in countries such as Vietnam.

The Obama administration pitched it as a way to spur U.S. growth by opening Asian markets and exercising American leadership. Critics, including supporters of both Trump and Hillary Clinton, his democratic rival for the presidency, called it a threat to U.S. jobs.



The plan was popular among U.S. allies in Asia, particularly Japan, the world’s third-largest economy. And even after Trump made good on his promise to withdraw from the trade deal, Japanese Prime Minister Shinzo Abe signaled that he would continue trying to convince the new U.S. president of its benefits.

[4 things to watch now that the U.S. has withdrawn from TPP trade deal]

“I believe President Trump recognizes the importance of free and fair trade, and I’d like to concentrate on getting him to understanding the strategic and economic significance of the TPP agreement,” Abe told the Diet, or Japanese parliament, Tuesday morning.

President Trump signs an executive order on Monday withdrawing the United States from the Trans-Pacific Partnership trade deal. (Saul Loeb/AFP/Getty Images)

The Diet had ratified the deal on Friday, despite its dim prospects. Still, it was a crucial part of the prime minister’s “Abenomics” plan to overhaul the Japanese economy and inject new momentum into it after two decades of stagnation.

Officials made clear that Japan would not try to keep the deal alive if the United States is not a part of it. “The TPP agreement will be meaningless without the U.S.,” Koichi Hagiuda, deputy chief cabinet secretary, told reporters.

The concern for Japan and others in the region is that an “America first” foreign policy will mean poorer economic prospects and a broader role for Beijing. Scrapping the TPP is likely to bolster support for Chinese regional trade regimes. The Philippines and Singapore already are shifting toward the China-backed Regional Comprehensive Economic Partnership, for instance.

[Is Trump ready for war in the South China Sea, or is his team just not being clear?]

On Monday, New Zealand Prime Minister Bill English said it was imperative that his country pursue new deals. “We don’t have the choice America has. It’s big enough that they can make a living selling things to themselves,” he said. “We have to trade.”

“China is actually now in a great position to assume a leadership role as the leading proponent for regional integration in the region,” said Davin Chor, an associate professor in the Department of Economics at the National University of Singapore. “I do foresee the Chinese being more vocal and active in advocating for regional trade agreements centered around the Chinese economy.”

All this could help China boost its clout beyond the region.

“China had been afraid that the U.S. would use the TPP to economically encircle China in Asia,” said Victor Shih, an associate professor at the University of California at San Diego’s School of Global Policy and Strategy. “With the abandonment of TPP, Chinese leaders are likely breathing a sigh of relief and actively thinking of ways to further consolidate China’s dominance in Asia and beyond.”

What is striking, however, is that Chinese experts still seem more concerned with Trump’s foreign policy than convinced that a golden era for China is on the way.

Hu Xingdou, an economist at the Beijing Institute of Technology, said he was “not too optimistic” about China’s prospects. The new U.S. president “will pursue protectionism,” he said, and China is starting to view Trump as its “biggest enemy.”

Tu, the trade expert at the University of International Business and Economics, said it was hard to see a positive outcome when an all-out trade war is a possibility. Trump, after all, seems “rather wayward,” he said.

Luna Lin reported from Beijing.

Read more:

Withdrawal from Trans-Pacific Partnership shifts U.S. role in the world economy

The TPP is dead. What was it?

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