Beyond the Trade War: U.S.-China Competition and Triple Multilateralism in the Asia Pacific

Jimmy Carter Prize Runner-Up

The Asia Pacific is not dividing neatly into two hostile camps. It is concurrently becoming harder, hotter and more entangled. Vietnam sells record volumes to the U.S. market while importing record volumes from China. Indonesia has joined BRICS Plus while also striking a tariff-cutting trade deal with the United States. Japan is tightening its alliance with the United States even as it works with other partners to diversify its critical mineral supply chains. These are not the behaviors of states marching into two clean blocs. They are the behaviors of states trying to survive in a regional order that now runs on three tracks at once. The old “new Cold War” analogy captures the temperature of the moment but not its structure.

The regional structural reality is what can be called Triple Multilateralism. The first track is Asia-Pacific regional functionalism: the ASEAN-centered and ASEAN-embedded web of forums, trade arrangements, and dialogue mechanisms that preserves open interfaces even under stress. The second is U.S.-led security alignment and minilateral networking: the old hub-and-spokes alliance system, now thickened by overlapping security minilaterals. The third is a China–Russia-led counteralignment spectrum: soft institutional platforms such as BRICS Plus, Eurasian strategic mechanisms such as the Shanghai Cooperation Organization (SCO), and harder Northeast Asian security effects created by the overlapping China-Russia Comprehensive Strategic Partnership of Coordination, Russia-North Korea alliance and China-North Korea alliance. U.S.-China competition did not invent these tracks from nothing. Each evolved from its own post-Cold War logic. But the competition has intensified, politicized, and reweighted them, and the tracks now shape how Washington and Beijing compete in return.

Track One: Asia-Pacific Regional Functionalism

The first track, Asia-Pacific regional functionalism, is the most underrated. ASEAN’s Outlook on the Indo-Pacific states ASEAN centrality should be the underlying principle for cooperation, with ASEAN-led mechanisms such as the East Asia Summit serving as platforms for dialogue and implementation. [1] The ASEAN Plus Three work plan similarly says ASEAN centrality remains the driving force in the evolving regional architecture, while the Regional Comprehensive Economic Partnership (RCEP) is meant to uphold an open, inclusive, and rules-based multilateral trading system. [2] The Asia-Pacific Economic Cooperation (APEC) still gathers 21 member economies in a cooperative forum built around open dialogue, consensus, and voluntary commitments rather than treaty obligations. Strip away the acronym matrix and the logic is simple: this first track exists to keep the region from closing in on itself. It lowers friction, preserves interfaces, and keeps economic and diplomatic traffic moving even when politics deteriorate.

That first track has not escaped the effects of U.S.-China competition. It has changed character. Before 2018, when the first Trump administration designated China as a strategic competitor and revisionist power, regional functionalism was often sold as a story of liberalization, connectivity, and growth. Today it is increasingly about resilience, diversification, and risk management. [3] The United States still shows up in APEC and wants economic influence in Asia, but it remains outside the region’s two most important new trade agreements, RCEP and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Washington has instead relied on the Indo-Pacific Economic Framework (IPEF), a 14-economy framework built around trade, supply chains, and clean and fair economic practices. At the same time, Trump’s tariff strategy has directly strained the region’s functionalist logic. In April 2025, ASEAN ministers responded to steep U.S. tariff threats by refusing retaliation but reaffirming their commitment to a predictable, rules-based multilateral trading system. [4] That was not diplomatic fluff. It was the region trying to defend the first track against being swallowed by zero-sum trade coercion.

Track Two: U.S.-led Security Alignment and Minilateral Networking

The second track, U.S.-led security alignment and minilateral networking, has been transformed more visibly. Here, the old hub-and-spokes system has not disappeared; it has been re-networked. The U.S.-Japan alliance remains, in the White House’s own words, the “cornerstone” of peace, security, and prosperity in the Indo-Pacific. [5] The Quadrilateral Security Dialogue, or Quad, now openly advances a joint agenda on maritime and transnational security, economic prosperity and security, critical and emerging technologies, and humanitarian response. The 2026 U.S. National Defense Strategy goes further still, calling for a strong denial defense along the First Island Chain and urging allies and partners to do more for collective defense. [6] In plain terms, that means Washington is no longer content with simply reassuring allies one by one. It wants a denser, faster, and more interoperable security web stretching from Northeast Asia into the maritime front lines of the Western Pacific.

Trump’s second term has not dismantled that second track, but rather hardened it. The strategic language is less wrapped in democratic values and much more explicit about burden-sharing. The same 2026 strategy stresses that the United States cannot and should not do this alone. Meanwhile, U.S. trade and industrial policy is increasingly fused with alliance politics. The 2026 Trade Policy Agenda from the U.S. trade representative’s office confirms that the existing 50 percent Section 301 tariff on semiconductors from China remains in place and may see further development. [7] The U.S. Commerce Department has also tightened export controls by closing loopholes for foreign-owned semiconductor fabrication plants in China. What was once framed as trade policy is now openly discussed as national security policy. Alliance politics in the Asia Pacific is no longer just about ships, bases and missiles. Chips, minerals, logistics and industrial capacity are all part of the equation as well.

Track Three: The China-Russia-Led Counteralignment Spectrum

The third track, the China-Russia-led counteralignment spectrum, is the easiest to caricaturize and the hardest to describe accurately. It is not a neat anti-American bloc, because it does not function like one. BRICS Plus is not a military alliance; it is a political and diplomatic coordination platform for the Global South. But it is also plainly an alternative interface to Western-dominated institutions. Its current membership in the region includes Indonesia, while Malaysia and Thailand are among its partner countries. The other, more security-oriented institution, the Shanghai Cooperation Organization, is not NATO in Eurasian dress, yet it is also more than a discussion club. It now has ten member states and 15 dialogue partners, and its 2025 Tianjin Summit advanced new permanent security bodies, including an anti-narcotics center and a comprehensive center for countering security threats. [8] At the harder edge of this spectrum, China and Russia continue strategic military coordination, while the Russia-North Korea treaty has entered into force with a mutual-assistance clause. This third track is not a single organization. It is a widening set of alternative platforms, resilience tools and, at times, hard security effects.

Put these three tracks together and the region looks very different from the usual binary portrayal. Asia-Pacific regional functionalism preserves interfaces. U.S.-led security alignment and minilateral networking raises strategic thresholds. The China-Russia-led counteralignment spectrum expands alternative platforms. None cancels out the others. In fact, they reinforce one another’s growth. The harder the second track becomes, the more useful the third appears to states that want sanctions resilience or political insurance. The thicker the third track becomes, the easier it is for Washington to justify tighter alliance networking. And the weaker the first track becomes, the more the entire region is pulled into a security-first logic. The Asia Pacific, then, is not drifting toward a simple bipolar order. It is becoming a coupled system in which competition spreads across trade, technology, finance and security at the same time. That is a more complex order than a new Cold War and, in some ways, a more dangerous one.

This is also why U.S.-China relations as of June 2026 are better described as coercive coexistence managed through rolling truces than as either stabilization or decoupling. The two powers are competing more fiercely on security, technology, and industrial policy, yet they have not severed contact or abandoned transactional stop-loss bargaining. Since the May 2025 Geneva joint statement paused part of the reciprocal tariff escalation, the two sides have kept negotiating through a chain of talks in London, Stockholm, Madrid, Kuala Lumpur, Paris and Seoul.

The Busan summit in October 2025 turned that process into a one-year trade-and-export-control truce, keeping the 10 percent reciprocal tariff baseline while suspending steeper escalation until November 2026. [9] Trump’s May 2026 visit to China pushed the logic further, with the two sides moving toward a U.S.-China Board of Trade and Investment under the new framing of a constructive relationship of strategic stability. [10] But this was not a reset. By early June, Washington was still seeking public input on limited tariff relief with China while keeping much of the national-security trade architecture in place. [11] Beijing, for its part, continued to frame the process as dialogue based on equality, respect and mutual benefit. The result is transactional stability: managed rivalry, selective easing and mutual pressure at the same time.

The point is not that trust has been restored. It plainly has not. The point is that even amid sharpening competition, both sides still rely on controlled channels for damage limitation. They are continuing to prepare further trade talks rather than abandoning that logic. The first track keeps some of those channels open. The second and third keep generating new reasons to use them.

Triple Multilateralism in Practice

Vietnam shows what this three-track order looks like on the ground. It is one of the clearest beneficiaries of supply-chain relocation from China, but it is also one of the clearest examples of how misleading “friend-shoring” language can be. Vietnamese exports to the United States were equivalent to roughly 30 percent of Vietnam’s gross domestic product, the highest share among major U.S. trade partners. [12] Yet Vietnam’s imports from China hit a monthly record of $19 billion in January 2026. [13] In other words, Vietnam is not moving from one camp to another. It is monetizing access to the U.S. market while relying heavily on Chinese inputs and industrial depth. That is not indecision. It is cross-track embedding: security caution, economic opportunism and institutional hedging all at once.

Japan illustrates a different version of the same logic. It has gone further than almost any other regional state in thickening the second track. Its alliance with the United States remains central, and Washington now expects Tokyo to carry more weight in a First Island Chain defense architecture. Japan is also positioning itself as a hub for wider regional defense cooperation, from command-and-control upgrades with the United States to closer security ties with partners such as the Philippines, Canada and Australia. Yet Tokyo is not reducing the region to alliance logic alone. It is also working with Canada and France on alternative critical-minerals and rare-earth supply chains, trying to reduce exposure both to Chinese concentration and to an increasingly tariff-heavy U.S. trade approach. [14] Even one of Washington’s closest allies does not want the region’s economic future to depend solely on the second track. Japan’s strategy is security alignment layered with selective diversification inside the first track.

Indonesia is perhaps the cleanest proof that regional order is not collapsing into two camps. Jakarta sits deeply inside ASEAN-centered functionalism, has joined BRICS Plus as a full member and, at the same time, has signed a major trade agreement with the United States under Trump. The February 2026 agreement would reduce U.S. tariffs on Indonesian exports from 32 percent to 19 percent, came alongside $38.4 billion in business deals, and tied Indonesia more closely to U.S. expectations on digital trade, critical minerals, supply chains and market access. [15][16] Yet the deal still required ratification as of early June, underscoring the conditional nature of this cross-track bargaining. This is not bloc politics in the Cold War sense. It is bargaining across tracks. Indonesia is not escaping great-power pressure; nobody is. But it is showing that even under sharper U.S.-China competition, middle powers still have room to negotiate, diversify and reposition rather than merely submit.

This is where middle-power agency becomes the central policy question, not a decorative afterthought. At Davos in January, Mark Carney argued that “intermediate powers” are not powerless and that countries in between major powers can help build a new order rather than simply compete for favor from hegemonic states. [17] That argument deserves to be taken seriously in the Asia Pacific. The first track will not preserve itself automatically. In fact, it is the most vulnerable of the three, because the second and third tracks both grow naturally under pressure from great-power competition. Only regional states can deliberately strengthen the one layer that is open, inclusive and commonly beneficial. That means treating regional functionalism not as a pleasant supplement to hard politics, but as a form of collective strategic agency. It is the institutional means by which middle powers can resist being reduced to logistical appendages of great power contest.

What, then, should regional states actually do? They should begin by defending and upgrading the institutions that already exist rather than fantasizing about some grand new architecture. ASEAN-led mechanisms, APEC, ASEAN Plus Three and RCEP remain the region’s most important restraint infrastructure. Supply-chain resilience should be pursued inside those frameworks, not handed over entirely to alliance logic. Critical minerals, digital governance and industrial diversification should be treated as regional public-goods issues as well as security issues. And the region should use those same first-track mechanisms to reduce cross-track spillovers from its most dangerous flashpoints. Taiwan, the South China Sea and the Korean Peninsula are serious enough already; they do not need help becoming self-fulfilling prophecies. The goal is not to deny great power competition. It is to stop competition from becoming the whole story.

That is the real answer to the question of what lies beyond the trade war. U.S.-China competition is unquestionably reshaping the Asia Pacific, but not by reducing it to two rival camps. It is reshaping the region by intensifying a triple-multilateral order in which different states embed differently across three tracks. The strategic task for the rest of the region is therefore neither denial nor surrender. It is to keep the first track strong enough that the second and third do not define everything. Great powers will continue to compete; the region cannot stop that. But it can still decide whether competition becomes the region’s governing logic or only one force among others. In today’s Asia Pacific, that may be the most important choice any middle power can make.

References

[1] ASEAN. (2019, June 22). “ASEAN Outlook on the Indo-Pacific.” https://asean.org/wp-content/uploads/2021/01/ASEAN-Outlook-on-the-Indo-Pacific_FINAL_22062019.pdf

[2] ASEAN. (2022). “ASEAN Plus Three Cooperation Work Plan 2023–2027.” https://asean.org/wp-content/uploads/2022/08/APT-Cooperation-Work-Plan-2023-2027.pdf

[3] The White House. (2017). National Security Strategy of the United States of America. https://www.dau.edu/sites/default/files/Migrated/CopDocuments/National%20Security%20Strategy%20Final-2018.pdf

[4] ASEAN Briefing. (2025). “ASEAN’s Response to U.S. Tariffs: Toward a Unified Regional Strategy.” https://www.aseanbriefing.com/news/aseans-response-to-u-s-tariffs-toward-a-unified-regional-strategy/

[5] U.S. Department of State. (2026, February). “Japan’s National Day.” https://www.state.gov/releases/office-of-the-spokesperson/2026/02/japans-national-day

[6] U.S. Department of Defense. (2026). National Defense Strategy. https://media.defense.gov/2026/Jan/23/2003864773/-1/-1/0/2026-NATIONAL-DEFENSE-STRATEGY.PDF

[7] Office of the United States Trade Representative. (2026). 2026 Trade Policy Agenda and 2025 Annual Report. https://ustr.gov/sites/default/files/files/Press/Releases/2026/2026%20Trade%20Policy%20Agenda%202025%20Annual%20Report.pdf

[8] State Council of the People’s Republic of China. (2025). “2025 Tianjin Summit.” https://www.gov.cn/yaowen/liebiao/202509/content_7038676.htm

[9] The White House. (2025, November). “Fact Sheet: President Donald J. Trump Strikes Deal on Economic and Trade Relations with China.” https://www.whitehouse.gov/fact-sheets/2025/11/fact-sheet-president-donald-j-trump-strikes-deal-on-economic-and-trade-relations-with-china/

[10] The White House. (2026, May). “Fact Sheet: President Donald J. Trump Secures Historic Deals with China, Delivering for American Workers, Farmers, and Industry.” https://www.whitehouse.gov/fact-sheets/2026/05/fact-sheet-president-donald-j-trump-secures-historic-deals-with-china-delivering-for-american-workers-farmers-and-industry/

[11] Reuters. (2026, June 3). “USTR Seeks Comment on Possible U.S.–China Tariff Cuts Under Board of Trade.” https://www.reuters.com/world/us/ustr-seeks-comment-possible-us-china-tariff-cuts-under-board-trade-2026-06-03/

[12] Reuters. (2025, February 25). “Vietnam’s U.S. Exports Account for 30% of GDP, Making It Highly Vulnerable to Tariffs.” https://www.reuters.com/markets/vietnams-us-exports-account-30-gdp-making-it-highly-vulnerable-tariffs-2025-02-25/

[13] Reuters. (2026, February 6). “Vietnam’s Trade Surplus with U.S. Surges in January; Imports from China Hit New High.” https://www.reuters.com/world/asia-pacific/vietnams-trade-surplus-with-us-surges-january-imports-china-hit-new-high-2026-02-06/

[14] Reuters. (2026, March 6). “Japan, France, and Canada Work on Alternatives to U.S.-Led Trade Bloc for Rare-Earth Supplies.” https://www.reuters.com/world/asia-pacific/japan-france-canada-work-alternatives-us-led-trade-bloc-rare-earth-supplies-2026-03-06/

[15] Reuters. (2026, February 20). “Indonesia and U.S. Sign Agreement on Reciprocal Trade, Indonesian Ministry Says.” https://www.reuters.com/world/asia-pacific/indonesia-us-sign-agreement-reciprocal-trade-indonesian-ministry-says-2026-02-20/

[16] Channel News Asia. (2026). “New U.S. Tariff Exemptions Will Provide Growth Stimulus, Indonesia Minister Says.” https://www.channelnewsasia.com/business/new-us-tariff-exemptions-will-provide-growth-stimulus-indonesia-minister-says-6163716

[17] World Economic Forum. (2026, January). “Davos 2026 Special Address by Mark Carney, Prime Minister of Canada.” https://www.weforum.org/stories/2026/01/davos-2026-special-address-by-mark-carney-prime-minister-of-canada/

Image Credit: Ricardo Stuckert. (2025). “25.10.2025 – Sessão de Abertura da 47.ª Cúpula da Associação de Nações do Sudeste Asiático – ASEAN” via Lula Oficial, CC BY-SA 4.0.