Where there’s will, there’s a way – But not without a brawl in the battery room

Let’s not pretend this next phase of global trade negotiations is going to be smooth sailing. The will is there — 70+ potential partners want a seat at the table, and there's growing acknowledgment in both Washington and Beijing that de-escalation is strategically necessary. But anyone expecting a Plaza Accord 2.0 moment is kidding themselves. This is going to be a piecemeal affair, with tariffs, tech, and tensions trading blows every step of the way.

Just take a look under the hood of the EV market. China isn’t just winning the price war — they’re lapping the field. BYD, SAIC Maxus, Changan, and Wuling are redefining value-driven innovation, offering electric vehicles at absurdly low price points while packing in serious range and safety. The Wuling Mini EV clocks in at $6,400 — a fraction of what a Model 3 costs — and it’s selling hundreds of thousands of units. That’s not just a competitive advantage, that’s industrial warfare by spreadsheet.

And that’s exactly the fight Washington is gearing up for. Every Western nation is reading the same playbook when it comes to China’s perceived overcapacity. The next phase of tariffs won’t just be about blanket taxes — it’s going to get surgical: EVs, solar, batteries, chips, and anything deemed a “national security” risk. The issue? That definition is ballooning. Everything is now a security issue if it touches data, power grids, or mobility.

What’s more, China has zero incentive to play ball cleanly. Public denials of trade meetings, pushback on “decoupling” narratives, and open trolling in state media — all part of the playbook. Beijing is happy to let the U.S. stew in its own contradictions while quietly entrenching its global EV footprint. Just ask Latin America, Africa, or Southeast Asia where BYD’s showrooms are popping up faster than Starbucks.

Even if some symbolic progress is made — say, a bilateral accord with Japan or South Korea — the heavyweights aren’t going to give an inch without a strategic trade-off.

Tech decoupling isn’t some side skirmish — it is the main theatre. And any framework that doesn’t address IP transfers, data localization, AI chips, and green energy dumping is going to get shredded before ink has a chance to meet paper.

That’s why this won’t be a slam dunk. It’ll be more like a three-on-three game on a half-court covered in sandbags — messy, contested, but still playable. The will for a deal is real. The market wants it, supply chains need it, and politicians are desperate to stave off a barcode recession at the malls

But the “way” is going to be slow, fragmented, and possibly held together by side deals and sector-by-sector carve-outs. EVs, tech, and security are the battlegrounds — not afterthoughts.

So yes, position for headlines. Play the tape when the optimism flows. But don’t expect a clean finish. This is trade diplomacy in the TikTok era — all noise, no guarantees, and one social media post away from a breakdown.

The view

If you're hoping Asia can tiptoe through Trump’s tariff minefield unscathed — forget it. The region is staring down the barrel of synchronized slowdown, with trade-heavy economies caught in the crosshairs of a policy regime built on uncertainty, retaliation, and "America First 2.0."

Morgan Stanley just slashed its 2025 GDP forecast for Asia to 4%, down from 4.4%, and that’s the base case — not the stress scenario. The real kicker? The previous year printed 4.6%, so we’re not just cooling; we’re decelerating in lockstep. And it’s not just exports — it’s capex, hiring, and consumption all taking hits as corporate CFOs freeze spend under the fog of tariff war déjà vu.

Let’s be blunt: the current U.S. tariff regime may be semi-transparent today, but the market is pricing in escalation risk, not certainty. And why wouldn’t it? The effective U.S. tariff rate on Chinese goods is already 123% (before carve-outs). That’s not a nudge — that’s a chokehold. It’s no surprise Chinese exporters are rerouting product flows through ASEAN to dodge the dragnet. But as the U.S. tightens rules-of-origin loopholes, those back doors won’t stay open for long.

Negotiations? Sure. Eventually. But calling this a "deal path" is generous. This is more like wading through quicksand with a blindfold on. China is the heavy lift, but even surplus-heavy allies like Vietnam, Thailand, and Taiwan are likely to get bogged down — not because they don’t want a deal, but because the Trump trade team wants to reshape supply chains, not restore them.

Even best-case scenarios carry scars. Tariffs won’t revert to pre-reciprocal levels, and the 90-day pause looks more like a temporary ceasefire than a reset. Add the specter of sector-specific tariffs — especially in EVs, semiconductors, and AI hardware — and you’ve got enough uncertainty to make CEOs sit on their hands for quarters.

As for performance tiers: India’s looking relatively bulletproof, with domestic drivers insulating it from the worst trade fallout — though even there, growth is marked down to 6.1%. Australia’s still floating above water too, but export leverage will eventually bite.

The real damage? Korea, Taiwan, Malaysia, Thailand, Singapore, and Hong Kong — the trade engine bloc. These economies are so hardwired into global supply chains that even a whiff of protectionism triggers a systemic slowdown. For Korea and Taiwan, the electronics-specific tariffs are the red flashing light. If Washington hits chips or consumer tech, these two get hit first and hardest.

Bottom line: Asia is walking into the storm. The narrative of "resilient Asia" only holds if trade stays fluid. But we’re entering an era of policy-made shocks — and no amount of central bank jawboning is going to hedge that kind of tail risk.

So position accordingly: keep dry powder, hedge exposure to surplus-sensitive Asia, and watch the tape for signs of fragmentation within the region. This isn’t 2018 — it’s a broader, more targeted crackdown. And this time, the path to a deal looks more like a maze.