Published daily by the Lowy Institute

Trump’s grand bargain? The Philippines caught between US and China

Manila is increasingly aware that a defence dilemma could be exposed by the president’s transactional foreign policy.

Trump likes to be known for the “art of the deal” (Chris Kleponis/CNP/Bloomberg via Getty Images)
Trump likes to be known for the “art of the deal” (Chris Kleponis/CNP/Bloomberg via Getty Images)

As the second Trump administration assembled, the Philippines appeared relatively sanguine about the prospects of stronger bilateral relations. The elevation of China hawks such as new Secretary of State Marco Rubio, who has argued for stronger assistance to Asian allies, was encouraging to Manila, which has been grappling with festering maritime disputes with Beijing in the South China Sea.

The appointment of so-called “prioritisers” such as Elbridge Colby as undersecretary for policy at the Pentagon was just as reassuring. After all, Colby, the former architect of the 2018 National Defence Strategy, has been a major proponent of an Asia-focused American foreign policy away from traditional theatres such as the Middle East and Europe. His new boss, Pete Hegseth, as well as new National Security Adviser Mike Waltz, have echoed similar positions, underscoring the centrality of the Indo-Pacific to the second Trump administration.

The main concern with Trump was his notoriously transactionalist streak coupled with strategic incoherence and temperamental unpredictability. But this was something that most Asian allies thought they had deftly managed during Trump’s first stint at the White House.

Yet a more troubling prospect now confronts frontline allies such as the Philippines, namely the elevation of isolationist figures, who have been openly advocating for a new strategic understanding, if not a “grand bargain”, with Beijing. As if that wasn’t troubling enough, Trump himself has repeatedly extended the olive branch to main adversaries and has openly welcomed a potential “G2” (“Group of Two”) condominium with China.

Signs of trouble came early on. In an unprecedented move, Trump invited Xi Jinping to his inauguration, while reversing the ban on China’s most famous social media app, Tiktok, despite vehement opposition by Republican allies. “It is my expectation that we will solve many problems together, and starting immediately. We discussed balancing Trade, Fentanyl, TikTok, and many other subjects,” Trump wrote in a social media post just hours before reoccupying the White House. “President Xi and I will do everything possible to make the World more peaceful and safe,” he added, underscoring his penchant for dealmaking with fellow world leaders.

The Philippines’ geographical location makes it indispensable to any effective American military contingency over Taiwan or regional ally.

In fairness, Trump had made his position clear soon after he re-secured the presidency last year. During a press briefing at Mar-a-Lago, he nonchalantly declared: “China and the United States can together solve all the problems of the world, when you think about it.” And then there is the curious case of Trump’s entrepreneur-turned-consiglieri, Elon Musk, who could play a critical role in brokering a “grand bargain” between the two superpowers. Not only does Musk have huge investments in China and robust personal ties with the Chinese leadership, the tech billionaire has positioned himself as potential partner/purchaser of TikTok in America. He has also often parroted Beijing’s line on sensitive geopolitical issues, recently describing Taiwan as an “integral part of China”, while instructing Space X suppliers to move out of the self-ruling island nation.

The Pentagon’s new Southeast Asia chief, John Andrew Byers, is also seen as troubling, having openly advocated for a “cooperation spiral” with China in the South China Sea that could completely sideline if not undermine Philippine interests. Byers proposed “remov[ing] US military forces or weapons systems from the Philippines in exchange for the China Coast Guard executing fewer patrols” in disputed areas. Byers has downplayed the importance of deterrence in order to “reduce threat perceptions and eliminate imaginary fears that, if maintained, will surely become self-fulfilling prophecies”.

Joint training during Exercise Balikatan 2019 (Eric Chan/US Navy)
Joint training during Exercise Balikatan 2019 (Eric Chan/US Navy)

Such developments in the early days of the administration leave the Philippines needing to prepare for all potential contingencies. First, Manila must optimise direct communication channels with Beijing to ensure it doesn’t get sidelined and, if possible, even shape the direction of any US-China diplomatic engagement. Directly negotiating potential de-escalation mechanisms with Beijing could also help thwart swashbuckling Americans from dictating the terms and trajectory of the South China Sea disputes.

Moreover, the Philippines will have to constantly engage with and work in lockstep with sympathetic key figures within the Trump administration, from Marco Rubio to Elbridge Colby, who value the Southeast Asian nation’s centrality to preserving a rules-based order in the region. After all, the Philippines’ geographical location – at the interstices of the South China Sea, Bashi Channel and Philippine Sea – makes it indispensable to any effective American military contingency over Taiwan or regional ally. The Philippines must resist being reduced to a pawn in a great power bargain.

Now boasting one of the fastest-growing economies in Asia, the Philippines should also rapidly build up its own defence capabilities, embracing a “multi-aligned” approach that lessens its dependence on Washington in favour of a diversified foreign policy. Its newly-ratified Reciprocal Access Agreement with Japan should be a first major step in consolidating a broader network of security partnerships, including with Australia, Canada, South Korea, India, and European countries. Ultimately, a more capable and self-reliant Philippines will be better positioned to strike its own “art of the deal” with a transactionalist-isolationist Trump administration.




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