US 'more willing' to act unilaterally for its national interests, says SM Lee Hsien Loong

Key Concepts

• Strategic Changes: Significant shifts in global trade, security, and international relations.
• US Trade Policy: Shift towards bilateral trade agreements and the use of tariffs as a policy tool.
• Multilateralism vs. Unilateralism: The contrast between international cooperation and individual nation-state action.
• US-China Relations: Ongoing tensions and the potential for economic and geopolitical conflict.
• European Security: Increased focus on independent defense capabilities and reduced reliance on the US.
• ASEAN Cooperation: The need for greater unity and collaboration among ASEAN member states.
• Global Instability: Increased risk of economic downturns and security threats.

Global Shifts and Uncertainties: A Look Ahead to 2026

The speaker begins by framing 2024 as a year of “strategic changes” with “lasting effects” despite an initial perception of relative calm. These changes, he argues, will fundamentally reshape the global landscape in both economic and security spheres.

Trade Disruptions and the US Approach

A pivotal change occurred on April 2nd with the implementation of Trump administration tariffs, “upending the global trading system.” While the impact has been “slightly less bad” than initially feared – due to lower-than-expected tariffs, slower implementation, and the boost from the US AI tech boom – the speaker emphasizes this is a “drastic change.” The US has effectively moved away from a multilateral trading system anchored by Most Favored Nation (MFN) status, opting instead for bilateral deals and utilizing tariffs as a broader policy instrument.

This shift will necessitate reactions from other countries, including defensive measures, supply chain adjustments, and potential retaliations. The speaker predicts this will ultimately “hurt the world economy,” leading to “less stability, less growth, less prosperity, less economic integration and technological progress.” He states, “That is not in doubt.”

Security Realignment in Europe and Asia

On the security front, Europe is undergoing “deep soulsearching” regarding its defense responsibilities and its reliance on the United States. This involves significant budgetary commitments and the challenge of formulating a unified European security policy.

In the Asia-Pacific region, while a “NATO style Munich moment” hasn’t occurred, US-China relations remain a key factor. A reluctance on both sides to engage in a “full-scale trade war” has led to some accommodation, but underlying tensions persist. Countries in the region are navigating a complex situation, balancing their relationships with both the US – a vital security, economic, and investment partner – and a growing China. The speaker notes that the future will depend on how both the US and China choose to engage with their regional neighbors. He expresses hope that China’s rhetoric regarding “multilateralism” and a “rules-based system” will translate into concrete policies.

US Unilateralism and its Implications

The speaker highlights a growing trend of the US acting unilaterally, citing interventions in the Middle East (resulting in a ceasefire in Gaza, albeit “imperfect”), a strike on Iranian nuclear facilities, and interventions in Nigeria and Venezuela, with potential action in Greenland “seriously under consideration.” While some of these actions have yielded short-term positive results, the speaker questions their long-term consequences for the global system, which is founded on UN principles, international law, and peaceful coexistence. He expresses concern that this environment undermines the principles of the UN Charter.

ASEAN’s Role and Internal Challenges

In this evolving landscape, the speaker stresses the importance of ASEAN unity. He advocates for closer cooperation among member states to address external challenges “as one unit” rather than as individual nations. He points to ongoing efforts in economic cooperation, infrastructure development, and the digital economy, referencing a study by Ibari Pangestu on ASEAN agency.

However, he acknowledges significant internal challenges facing ASEAN, including conflicts in Myanmar, Thailand, and Cambodia, which require resolution.

Economic Outlook and Long-Term Consequences

Looking ahead to 2026, the speaker anticipates a relatively flat economic outlook – “plus a bit, minus a bit” compared to the previous year. However, he emphasizes that the fundamental shift has already occurred. “We are now in a different world,” and the consequences of this “sea change” will be felt in both the economy and security areas for years to come. He concludes with a cautious hope for a less turbulent 2026, acknowledging the inherent unpredictability of global events. As he states, “Nobody can predict these things.”

Technical Terms:

• MFN (Most Favored Nation): A status granted by a country to another, ensuring the best trade terms offered to any country are also offered to the MFN country.
• Unilateralism: A foreign policy approach where a nation acts independently without regard for the interests or wishes of other nations.
• Multilateralism: A foreign policy approach where nations cooperate with each other to address common challenges.
• UN Charter: The founding document of the United Nations, outlining its principles and objectives.
• Tectonic Shocks: Sudden and significant disruptions or changes in the global order.