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Straits Times
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- Health
- Straits Times
The Trump effect on high drug prices
US President Donald Trump said on May 11 that he wants prices of drugs sold in the US to reflect the cheapest prices globally. PHOTO: AFP News analysis The Trump effect on high drug prices Salma Khalik explains why US leader Donald Trump is up in arms against high drug prices, how pharmaceutical companies have reacted, and what effect his executive order could have on the rest of the world. SINGAPORE – If US President Donald Trump had his way, the price of medication in the US would fall drastically – while the rest of the world would end up paying more, possibly a lot more. His declaration on Facebook on May 11 that he wants prices of drugs sold in the US to reflect the cheapest prices globally sent shares of large pharmaceutical companies tumbling across the world, with several losing 3 per cent or more of their stock market value within hours. But the steep plunge reversed just as abruptly once the executive order signed by Mr Trump on the morning of May 12 was made public. This was because the order lacked details, which led some observers to note that there was more bark than bite in his words . Today, the US, with 340 million people, or less than 5 per cent of the world's population, spends about US$5 trillion (S$6.5 trillion) a year on healthcare – and accounts for about 45 per cent of global pharmaceutical sales. One reason is that people in the US consume more medicine per capita than the rest of the world. Since they use more, they buy more, and hence spend more on drugs. Another reason, which is what upsets Mr Trump, is that prices of drugs, particularly those still under patent, are generally much higher in the US than anywhere else in the world. Pharmaceutical companies say the high prices paid in the US allow consumers there to be among the first to get any new treatments. Mr Trump gave the example of a 'fat drug', without naming it, that costs 10 times more in the US than in some other countries. He was likely referring to the highly popular diabetes drug Ozempic, which is also prescribed for weight loss under the trade name Wegovy. A 2023 comparison of prices by the independent Peterson-KFF Health System Tracker found 'the list price for one month of Ozempic in the US (US$936) is over five times that in Japan (US$169), and about 10 times more than in Sweden, the United Kingdom, Australia and France'. Drug companies have historically priced their products differently in different countries. Generally, richer countries tend to pay more than poorer countries with lower purchasing power. The Singapore Association of Pharmaceutical Industries (Sapi) told The Straits Times: 'Pharmaceutical companies work with local governments and healthcare systems to offer flexible and tailored pricing solutions based on each country's needs, helping make medicine and vaccines more affordable and accessible, especially in countries with fewer resources. 'Tiered pricing is one of the most effective and sustainable ways in which pharmaceutical companies help to improve and sustain access to medicine globally.' The cost of medication in Singapore, for example, is much higher than in neighbouring countries, so it is not uncommon for people to cross the Causeway, where savings could be significant, to buy their medicine. Having said that, rich countries also can get drugs more cheaply because of their buying power and ability to negotiate better prices. Australia, for example, sets a cap on the price of drugs it allows to be sold in the country. This can mean, however, that fewer drugs are available in Australia – compared with Singapore, for instance – as some pharmaceutical companies will refuse to sell at the designated prices. Even within the US, drug prices do vary. But the US does not benefit from its large purchasing power because the prices were negotiated individually between drug companies and their buyers – typically insurance companies, pharmacy chains and hospitals. Mr Trump's executive order states: 'The inflated prices in the United States fuel global innovation while foreign health systems get a free ride.' Associate Professor Wee Hwee Lin of the Saw Swee Hock School of Public Health said one of the main reasons drug prices are so high in the US is that there has been no direct price control mechanism, unlike in many other developed countries. Drugs have to prove only safety, efficacy and quality – but not cost-effectiveness, as is required in some other countries. She added that many pharmaceutical companies also choose to launch in the US first, as they can command the highest prices there, thus setting the bar for the rest. This may change with the passage of the Inflation Reduction Act (IRA) in 2022, which, for the first time, empowered Medicare to negotiate prices directly with drug companies. It had previously been legally prohibited from negotiating drug prices under a 'non-interference clause' in the Medicare Prescription Drug, Improvement and Modernisation Act 2003. Medicare, the national insurance for people over 65 and those with disabilities, is the single largest payer of healthcare in the US, and covers more than 55 million Americans for outpatient prescription drugs. Said Prof Wee, whose teaching areas include pharmacy practice: 'Prior to the IRA, Medicare was explicitly prohibited from negotiating prices directly with pharmaceutical companies. Therefore, drug prices in the US may be considered to be market-based pricing, based on supply and demand.' Even with the passing of the IRA, the cheaper negotiated prices will start to take effect only from 2026. Since the IRA was passed, Medicare has completed negotiations on 10 drugs that alone cost it US$50.5 billion in 2022, or about 20 per cent of its gross total drug spending . The drugs, which are used to treat chronic diseases such as diabetes and cancer, will have maximum prices that are 38 per cent to 79 per cent cheaper from January 2026. The IRA allows it to negotiate prices for 10 drugs in the first year, 15 in the next two years, and 20 a year thereafter. It has embarked on negotiations for the next 15 drugs, also for chronic diseases like diabetes, cardiovascular disease and cancer, to take effect from January 2027. Ozempic is one of them. Legal challenges have been mounted against the drug negotiation programme. According to a US Congress report, 'beginning in June 2023, several pharmaceutical manufacturers and trade associations filed lawsuits in various federal district courts alleging that the programme was unconstitutional'. So far, most have failed, but some court cases are still ongoing. In contrast, some Congress members want to expand the programme to more drugs in the market. Prof Wee said most other developed countries exert some control over drug prices by government intervention that will 'thus introduce market failure'. Britain's National Institute for Health and Care Excellence is a forerunner of healthcare technology assessment, which looks at whether the benefits of new treatments justify the price asked for. If they do not, the treatment would not be recommended to the National Health Service, which pays for almost all drugs used in the country. Many other countries in Europe and Asia have similar agencies to control the cost of new and expensive treatments. Singapore recently tasked the Agency for Care Effectiveness with studying new treatments and deciding if they provide value for money – changing the nation from being a passive price taker to one that has some clout in deciding the 'correct' pricing for the benefits from a treatment. It resulted in the Cancer Drug List, a list of treatments approved for insurance coverage, which has led to across-the-board savings of about 30 per cent in the public sector. At the upper ranges, the prices of cancer drugs fell by as much as 60 per cent. Pharmaceutical companies are still free to sell their cancer drugs at any price – but unless their price to the public sector is deemed cost-effective, they cannot be covered by MediShield Life or Integrated Shield Plan insurance, which pays for the vast majority of cancer treatments here. Singapore, being a small market, continues to pay a lot more than places like Australia, Taiwan and South Korea for many other drugs. Prof Wee pointed out that another major reason for the high drug prices in the US is the use of middlemen such as pharmacy benefits managers (PBMs). She said PBMs were originally intended to streamline procurement processes and help drive down costs for insurers and employers. 'However, over time, many unintended consequences arose. For example, there is a lack of transparency as regard the amount of rebates PBMs receive from the pharmaceutical companies relative to the list price,' she said. On the day the US President's executive order was signed, Mr Stephen J. Ubl, president and chief executive of the Pharmaceutical Research and Manufacturers of America, released a statement saying: 'The US is the only country in the world that lets PBMs, insurers and hospitals take 50 per cent of every dollar spent on medicine. 'The amount going to middlemen often exceeds the price in Europe. Giving this money directly to patients will lower their medicine costs and significantly reduce the gap with European prices.' Prof Wee said the influence of PBMs goes beyond just taking a big cut from the sale of drugs: 'PBMs may purchase based on how much rebate they can obtain rather than what is the least-cost option. Many of the PBMs are also owned by insurance companies. 'It is not clear how the financial interests of the insurance companies are prioritised over cost savings or patient outcomes.' Many drug companies argue that a large drop in their revenue could affect their ability to research and develop new treatments, which would be a sad loss to the world. However, there is no evidence to suggest this would actually happen. Mr Trump, who has not mentioned the Medicare programme, nevertheless wants drugs in the US to be sold at the 'most-favoured-nation price'. If that happens, prices of drugs elsewhere could go up as a result. The order said: 'My administration will take immediate steps to end global freeloading and, should drug manufacturers fail to offer American consumers the most-favoured-nation lowest price, my administration will take additional aggressive action.' However, it did not spell out what such aggressive actions might be. Furthermore, Mr Trump had tried something similar in his first term in office, only to be blocked by the courts. Most attempts to control drug prices will need congressional approval – something that could take years to achieve, if at all possible. Mr Trump ordered his Secretary of Health and Human Services, Mr Robert F. Kennedy Jr, to establish a mechanism through which American patients can buy their drugs directly from manufacturers, bypassing middlemen. This sounds promising on paper, as it would cut the price of drugs by half. But in reality, it is far more complex. If the current intermediaries between drug company and patients are removed, some other mechanism needs to take their place to ensure drugs get to patients. It might cut the price, but there would certainly be some distribution cost. Mr Trump also suggested importing 'prescription drugs on a case-by-case basis from developed nations with low-cost prescription drugs'. Even if the laws in the US can be amended to allow for this, the quantities imported are unlikely to be large enough to move the needle. Prof Wee said that to systematically bring down the prices at which drugs are sold, the US first needs to define the set of countries that it will refer to for international reference pricing – and whether this is based on the list price or the net amount paid after negotiations, including volume discounts. While list prices are readily available, negotiated prices are usually kept confidential. She added that the US would also need to conduct health technology assessments to decide on what drug pricing is justifiable, at a national level. Any moves in this direction will certainly be challenged as unconstitutional, as it could prevent patients from assessing treatments deemed not to provide value for money. In contrast, many countries in Europe and Asia, including Singapore, are willing to forgo access to new therapies if they are found to be too costly for the additional benefits provided. In spite of the difficulties in implementing Mr Trump's directive, his declaration of war against high drug costs in the US is likely to result in some price reduction. Most industry experts expect pharmaceutical companies to reduce prices somewhat in an effort to allay his wrath. This will be especially for drugs that are nearing the end of their patent – so that Mr Trump can declare his move a success. Prof Wee said it is 'hard to say at the moment how the pharmaceutical companies will respond'. Should there be significant cuts in drug prices in the US, she anticipates a chain effect, which will lead to a new equilibrium in pricing globally, including in Singapore. US Secretary of Health and Human Services Robert F. Kennedy Jr at a news conference about prescription drug prices at the White House on May 12. PHOTO: AFP Going forward, exactly what will happen remains anybody's guess. But should the US government try to impose severe price cuts, the drug companies will likely take legal action to block such moves, given that billions of dollars are at stake. And pharmaceutical companies have deep pockets – with the top handful each raking in revenues in excess of US$50 billion in 2024. Mr Trump's diatribe on high drug prices in the US appears to target Europe. Referring to how countries there 'force' pharmaceutical companies to cut the cost of drugs, he said 'the European Union has been brutal, brutal. And the drug companies actually told me stories, it was just brutal'. So, rather than going after the pharmaceutical industry directly, he just might penalise countries that he feels are 'suppressing' drug prices to the detriment of the US. Mr Trump is known for doing the unexpected, such as linking a 20 per cent tariff on goods from China to the inflow of fentanyl to the US. So, the penalty could be anything, including higher tariffs on totally unrelated goods to something no one has even thought about. Any changes, big or small, in drug prices in the US will likely have some spillover effect for Singapore. Ms Poh Hwee Tee, president of Sapi, told ST: 'While it is too early to determine the full extent of the impact of the US government's most-favoured-nation executive order, Sapi and its members are closely monitoring the developments and remain committed to working in close partnership with the Ministry of Health and other stakeholders to identify and address any potential challenges. 'Our focus remains on supporting Singapore's healthcare ecosystem and working collaboratively with stakeholders to ensure sustainable access to innovative medicine and vaccines for patients in Singapore.' Singapore spends about $1 billion a year on medicine. If prices were to go up by, say, 20 per cent across the board, that would be an additional $200 million a year. While this might not amount to much for government coffers and much of the price increase for subsidised patients might be cushioned by higher subsidies, the increase may be significant for private patients. A reassuring thought is that any increase in prices will affect only drugs that are still under patent. A lot of commonly used drugs here for conditions like diabetes, high cholesterol and blood pressure, are generic, and hence cheap. There is unlikely to be any impact on these. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
11-05-2025
- Business
- Straits Times
Japan's security presence in Asean now ‘routine', as fears grow of China gaining sway amid US apathy
Japan Maritime Self-Defence Force and Royal Cambodian Navy personnel at the Ream Naval Base in Cambodia, on April 19. PHOTO: AFP News analysis Japan's security presence in Asean now 'routine', as fears grow of China gaining sway amid US apathy – Two Japanese warships called on a Cambodian naval base on April 19, becoming the first foreign vessels to dock at a facility inaugurated just two weeks earlier after extensive China-funded upgrades. The event at Ream Naval Base, hailed as 'historically significant' by the Japanese embassy in Phnom Penh, sent a strong signal of Japan's interest in maintaining a rules-based multilateral order in the Indo-Pacific through defence diplomacy, projecting its military presence in regional waters . Over in Tokyo on April 15 , when announcing the port call, Defence Minister Gen Nakatani said Japan was watching China's 'highly notable' attempts to secure operational footholds overseas. Military experts had questioned if the Ream Naval Bas e , facing the Gulf of Thailand and near contested South China Sea waters, was a de facto hub for the Chinese military. Days later, on April 29, Prime Minister Shigeru Ishiba described the Philippines as a 'quasi-ally' during a visit to Manila. Japan is building a network of strategic defence partners, although the United States is its only formal security ally, given constraints under Japan's pacifist Constitution. Talks with President Ferdinand Marcos Jr included discussions about a military intelligence-sharing pact, and an agreement that allows their armed forces to share fuel, food, and logistical support services. Japan is shedding its historical baggage as a wartime aggressor and growing its security presence in South-east Asia, amid worries that China will exert greater influence given US President Donald Trump's lack of interest in the region. This is manifest in the steps now being taken as Japan relaxes its decades-old self-imposed arms export ban, with one such example being its Official Security Assistance (OSA) scheme. Now into its third year, the military counterpoint to the Official Development Assistance (ODA) programme – under which surveillance radars, patrol boats and other military equipment are provided to developing countries, including in South-east Asia. Meanwhile, Tokyo is embarking on a broad diplomatic charm offensive, spooked by the idea of China exploiting America's unreliable commitment to Asean to win over countries – especially since China has stepped up its approach to countries following the scorched-earth Liberation Day 'reciprocal' tariffs unleashed by US President Donald Trump on April 2. Mr Trump has barely shown interest towards Asean: in his first term, he skipped Asean-related summits for four consecutive years. Japan believes it is in its interest to fill the vacuum, taking a calibrated approach that draws the line at making Asean countries pick sides. Since taking office in October 2024, Mr Ishiba has visited five out of 10 Asean member states – Laos, Malaysia, Indonesia, Vietnam and the Philippines. 'Japan's diplomatic posture toward the region emphasises empowerment rather than coercion,' Dr Kei Koga of Singapore's Nanyang Technological University (NTU) told The Straits Times. This, he said, gives Japan a wealth of goodwill as it seeks to build a broad base of friends and partners that can 'diplomatically counter potential disruptive actions by challengers to the existing international order, particularly China'. Chinese President Xi Jinping's tour of Vietnam, Malaysia and Cambodia from April 14 to 18 had raised alarm bells in Tokyo. In all three countries, his main appeal was for a united 'Asian family' front against 'unilateral bullying' to protect the multilateral rules-based trading order. The smooth talk alarmed Tokyo, which fears that Beijing was abusing its clout as the world's second-largest economy in portraying itself as the responsible guardian of the status quo, despite its dubious record of economic coercion by, for example, restricting trade in consumer and agricultural goods, commodities or services when countries come under Chinese crosshairs. Tokyo fears that Asea n countries will fall for China's charm, even as Beijing tries to establish a fait accompli by asserting itself in the South China Sea and making no secret of its desires to reunify with Taiwan, by force if needed. Mr Itsunori Onodera, policy chief of Japan's ruling Liberal Democratic Party, said in Washington on April 29: 'More countries may distance themselves from the US and move closer to China — and that's not an outcome Japan would wish for.' Thus, Tokyo is intensifying its regional engagements with Asean, which Japanese officials insist were in the works regardless of Mr Xi's tour, even though there was an uncanny parallel between the itineraries . Mr Ishiba went to Vietnam from April 27 to 29, in a trip that Japanese officials said was being planned before Mr Xi's trip was announced. The countries agreed on a new vice-ministerial foreign and defence ministerial dialogue. The Japanese leader also spoke by phone to Malaysian Prime Minister Anwar Ibrahim on April 16 – when Mr Xi was in Kuala Lumpur – while former prime minister Fumio Kishida visited the country as Mr Ishiba's special envoy from May 6 to 7. The four-day port call in Cambodia by two Maritime Self-Defence Force (MSDF) minesweepers starting April 19 began a day after Mr Xi departed from Phnom Penh. Captain Shinsuke Amano told reporters: 'Japan was chosen as the first country to make a port call as a result of the friendly relations accumulated with Cambodia.' Professor Heng Yee Kuang of The University of Tokyo's Graduate School of Public Policy told ST that Japan offers Asean 'alternative strategic options' for more geopolitical manoeuvring space. Japan is in a unique position to act as a potential stabiliser in Asia, given that its postwar rehabilitation has afforded it moral credibility: it has been ranked as Asean's 'most trusted partner' in several surveys. But there are clear boundaries even as Japan tries to do more in defence , wary of coming across as coercive and betraying this hard-won trust. Professor Heng said: 'Asean expects Japanese behaviour to be benign, beneficial and predictable, while Japan does not expect Asean countries to participate in, for instance, high-end military missions.' This is evident in what he terms as 'smart power defence diplomacy', through a toolbox of measures that range from coast guard capacity-building to humanitarian assistance and disaster relief, goodwill port visits, confidence-building joint exercises, to the OSA scheme. Today, Japan's military presence in the Indo-Pacific has become 'routine', Prof Heng said, with its WWII past now 'less of an obstacle'. The MSDF on April 21 kicked off its ninth annual Indo-Pacific Deployment exercise. The largest yet, the seven-month exercise ending Nov 21 includes planned stops in 23 nations including Indonesia, Malaysia, Philippines, Singapore and Timor-Leste in South-east Asia. Such security ties are but one level of linkage between Japan and South-east Asia, with cooperation also deepening in other areas such as climate change, trade, investment, and human resource development. Asean countries welcome these efforts, but have differing views on the extent of Japan's engagement with the region . In 2022, Singapore's then Prime Minister Lee Hsien Loong encouraged Japan's greater participation in regional security to bolster 'collective security' – a point he reiterated in April 2025 at the launch of a book on Singapore and Japan ties. And in Jakarta, senior fellow Shofwan Al Banna Choiruzzad of the Foreign Policy Community of Indonesia think-tank believes that Japan can afford to be more proactive and take more initiative to strengthen Asean's institutional capacity in wide areas from energy transition to maritime security, technology transfers and infrastructure development. This, he said, would help the region navigate both China's rise and the US-China rivalry. 'Japan seems too complacent with its soft power, with less effort in building new networks or taking bold initiatives,' Dr Shofwan, who also teaches international relations at the University of Indonesia, told ST. 'China, on the other hand, is aggressively expanding its regional footprint through new initiatives, aware that it needs to forge stronger connections.' But in Malaysia, senior fellow Oh Ei Sun of the Singapore Institute of International Affairs sees Japan as having to mount a delicate balancing act, with its economic influence waning in comparison with the US and China. He told ST: 'Yes, Kuala Lumpur still wants security and defence cooperation, but in a lower-key manner than before, such that we don't anger China.' This difference in attitudes – whether to do more or to pull back – points to the nub of Japan's calibrated engagement with Asean even as its military presence in regional waters has come to be accepted by Asean. Dr Koga of NTU said: 'What Asean countries expect of it is precisely what Japan has been trying to understand.' With reporting by Stania Puspawardhani in Jakarta and Shannon Teoh in Kuala Lumpur Walter Sim is Japan correspondent at The Straits Times. Based in Tokyo, he writes about political, economic and socio-cultural issues. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
09-05-2025
- Politics
- Straits Times
‘None of our business': Is the US dusting its hands off the India-Pakistan conflict?
People gathering in front of a damaged restaurant outside the Rawalpindi cricket stadium in Pakistan's Punjab province after an alleged drone was shot down on May 8. AFP News analysis 'None of our business': Is the US dusting its hands off the India-Pakistan conflict? - The Trump administration's isolationist, America First stance is showing in its surprisingly low-key response to the escalation in hostilities between nuclear-armed India and Pakistan after a terrorist attack in the disputed Kashmir region. Coming while the White House is simultaneously making efforts to end the wars in Ukraine and Gaza, it perhaps reflects the superpower's reluctance to play the policeman of the world. India and Pakistan – which have fought three wars over Kashmir, the picturesque Himalayan region which both nations claim but each hold only a part of – are locked in a spiral of tit-for-tat military strikes for a fourth day on May 9. On May 9, Pakistan said it had shot down 25 Indian drones over the skies of its major cities like Karachi, Lahore and Rawalpindi. India said it had neutralised several Pakistani air defence radars and systems, including one in Lahore, after several cities in its border areas faced a barrage of missiles and drones. Pakistan says Indian air strikes and cross-border fire have killed 36 people while India has reported at least 16 dead from Pakistani shelling. US President Donald Trump was noncommittal when asked about India's May 6 airstrikes on 'terror infrastructure' targets in Pakistan and Pakistan-administered Kashmir. 'I just hope it ends very quickly,' he said in response to the strikes which New Delhi said were in retaliation for the April 22 killings in Indian Kashmir of 26 tourists, mainly Hindu men, by terrorists backed by Pakistan. 'I know both very well, and I want to see them work it out,' Mr Trump said the next day as Pakistan began shelling across the de facto border with India. 'They've gone tit-for-tat. So hopefully they can stop now. If I can do anything to help, I will be there.' Likewise, Vice-President J D Vance, who was in India for an official visit when the tourists were attacked, said the US would not intervene in the conflict. 'We're not going to get involved in the middle of [an India-Pakistan] war that's fundamentally none of our business,' he told Fox News in an interview on May 8. Though there has been a hint that the US has hardened its position against Pakistan, there are no signs it will change its hands-off policy. State Department spokesperson Tammy Bruce, when asked at a press briefing on May 8, if Pakistan was supporting terrorist groups, answered in the affirmative. 'That's a call that we have been making for decades,' she said. 'It is the dynamic that we've seen in the Middle East, disrupting lives.' This was also another divergence from traditional policy in the imbroglio on the subcontinent: the willingness to equate it with the situation in the Middle East, one of most volatile hotspots in the world. Ms Bruce said the violence should stop because that had not produced a solution either in the Indian subcontinent or in the Middle East. 'There has to be a change in that regard… new ideas to stop generational violence,' she said. A woman stands outside her house destroyed by Pakistani artillery shelling at the Salamabad village in Uri, about 110kms from Srinagar, on May 8. PHOTO: AFP Meanwhile, her boss, Secretary of State Marco Rubio, pressed the point in separate calls to the leaders of India and Pakistan on May 8. Mr Rubio, who has also taken on the role of the National Security Advisor, is in some ways the most experienced face of the Trump administration owing to his tenure in the Senate intelligence and foreign relations committees. He has stressed the need for immediate de-escalation and direct dialogue between India and Pakistan. The readout of the call to Pakistan Prime Minister Shehbaz Sharif said that Mr Rubio 'reiterated' that Pakistan should take concrete steps to end support for terrorist groups. In his call with India's External Affairs Minister S Jaishankar, Mr Rubio reaffirmed America's commitment to work with New Delhi 'in the fight against terrorism'. The conservative view in Washington pins the blame on Pakistan for the presence of terrorist groups on its soil. 'Either these groups are acting on behalf of the Pakistani state, in which case Islamabad is directly responsible for their actions,' wrote Mr Jeff Smith, Director of the Asian Studies Center at the right-leaning Heritage Foundation which has close ties with the administration. 'Or they are rogue actors (which no one believes), and the Pakistani state is still responsible for policing its borders and ensuring its territory isn't being used to launch attacks on other countries,' he wrote in a post on X on May 7. US-based analysts believe that the current tensions will ease before long. 'I believe Pakistan will be compelled to strike back at India,' said Mr Richard Rossow, Senior Adviser and Chair on India and Emerging Asia Economics at Centre for Strategic and International Studies. 'If they initiate a small, unimportant strike in Jammu and Kashmir, it could begin de-escalation. But if they hit meaningful civilian or military targets and strike further into India, India will need to counter-attack,' Mr Rossow said. India and Pakistan have seen such cycles of violence before and there is a de-escalation built into this escalation, said Dr Aparna Pande, research fellow for South Asia at the Hudson Institute. 'There is a possibility Pakistan may send some missiles or strike inside India for one final round, in which case India will say its air defence have struck those down. That gives both sides enough to satisfy their domestic opinions,' she said. 'India's desire is that the global community understands that Indian victims of terrorism deserve as much sympathy as Western victims of terrorism. And that there should be global pressure on Pakistan, which has allowed in terror proxies since the 1990s. 'But most of all, India needs to tell its people that it has punished the perpetrator of the attacks on tourists.' She said the Pakistani government, which has been under pressure from restive politics and a struggling economy, likewise needed to tell its people that Pakistan had been able to stand up to an Indian attack. 'So both sides have an off ramp. I do think it will take about 24 to 48 hours for that to happen. I'm not one of those who believes this is going to escalate into war, let alone a nuclear war,' Ms Pande said. Still, this is the closest the two sides have come to a direct conflict in recent years. During a serious escalation in the past, then president Bill Clinton intervened forcefully in the Kargil conflict in 1999 to prevent a broader spill-off among the two nations, which had then recently conducted nuclear tests. While US attempts to broker peace are absent this time, previous administrations have been comfortable with limited Indian counter-attacks in 2016 and 2019 when India made cross-border strikes, said CSIS's Mr Rossow. 'At the same time, the US administration is working hard to further accelerate the growing US-India partnership, and having India bogged down in a regional conflict with a far weaker nation can decelerate US-India ties,' he added. And apart from the US abhorrence of terrorism, reasons to support India have only proliferated in recent years. There is a clear tilt towards India over the past decade, agreed Mr Josh Kurlantzick, senior fellow for South-east Asia and South Asia at the Council on Foreign Relations. Mr Trump's personal relationship with Indian Prime Minister Modi is also a factor, according to Mr Kurlantzick. 'The fact that Pakistan is so close to China does not help either,' he added. Washington's geopolitical rival China is Pakistan's most important strategic and economic partner and has replaced the US as the top source for its military equipment. For the US, the reasons for building a relationship with India go well beyond a shared concern about China's increasing belligerence. India is about to become the world's third-largest economy, and is now the most populous nation. A partner to the US in sectors like IT services, India has offered to eliminate its tariffs and its vast market offers opportunities to US companies. 'And China's combative rise makes India an attractive partner for a deeper strategic and commercial relationship,' Mr Rossow said. Bhagyashree Garekar is The Straits Times' US bureau chief. Her previous key roles were as the newspaper's foreign editor (2020-2023) and as its US correspondent during the Bush and Obama administrations. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
09-05-2025
- Business
- Straits Times
PM Starmer happy about UK-US deal, but what does it say about Trump's long-term trade strategy?
US President Donald Trump boasted that the deal was 'full and comprehensive', and British Prime Minister Keir Starmer was equally happy, calling May 8 a 'fantastic, historic day'. PHOTO: AFP News analysis PM Starmer happy about UK-US deal, but what does it say about Trump's long-term trade strategy? – Writing on Truth Social, his preferred social media platform, US President Donald Trump claimed it was a 'great honour' that Britain became the first country to sign a new trade deal since he announced sweeping global tariffs on most countries. Mr Trump also boasted that the deal with the Britain was 'full and comprehensive'. British Prime Minister Keir Starmer was equally happy; he branded May 8 – the date when the agreement was concluded – a 'fantastic, historic day'. However, although noteworthy, the Britain-US deal's primary significance is mainly political. It tells us next to nothing about Mr Trump's long-term trade strategy. Nor can it serve as a pointer to any other trade agreements Washington may seek to conclude with key partners such as China, Japan or the European Union, all of which are in a different predicament from the British. The US is Britain's single biggest trade partner. Just over 16 per cent of all British exports go to the US, double the volume of exports to Germany – its next-largest trade partner – and about four times more than Britain's sales to China. So, in terms of their exposure to Mr Trump's trade tariffs, the British are as vulnerable as Canada or Mexico, Washington's closest neighbours. However, the British enjoy one advantage: their trade with the US is roughly balanced. Indeed, the US Bureau of Economic Analysis calculates that Washington enjoyed a healthy US$14.5 billion (S$18.82 billion) surplus in total trade with Britain in 2023, the last year for which full figures are available. Britain's statistical agency, which collects data differently and calculates trade in services differently, thinks that Britain enjoys a healthy trade surplus with the US. Yet, for obvious reasons, British officials are in no rush to dispute the American figures. So, Britain was often held up by the Trump administration as a model for other nations. Mr Robert Lighthizer, the US trade representative during Mr Trump's first presidential term, claimed that commerce with Britain is 'how trade is supposed to work'. And soon before he came to office, Mr Jamieson Greer, the current US trade representative, told lawmakers in Washington that a new trade deal with Britain was at the top of his agenda for the second Trump term. Mr Trump also has a personal soft spot for the British. His beloved mother – her picture is always prominent behind his work desk in the Oval Office – came from Scotland. Mr Trump's first foreign businesses were in Britain, and the President frequently refers to the two golf courses he owns in Scotland. Mr Trump is also an avowed fan of the British royal family. Mr Starmer took advantage of this during the meeting in Washington at the end of February: In the full blaze of media cameras, he presented Mr Trump with a formal invitation to a state visit, signed by King Charles III, the British monarch. Personal preferences also coincide with political calculations. Mr Trump has faced a chorus of domestic criticism about his tariffs and growing evidence from opinion polls that ordinary Americans are beginning to worry about the effect of their President's trade wars on the prices and availability of consumer goods. The President has spent the past few weeks claiming that countries 'are lining up' and even 'begging' him to sign new trade deals. In recent days, officials from his administration have also repeatedly spoken of 'progress' in talks with South Korea, India, Japan and Indonesia. But since no concrete progress had emerged, Mr Trump ultimately had to show some results, and Britain proved to be the ripest political fruit, ready for picking. The deal's conclusion also vindicates the British Prime Minister, who can plausibly claim that his blend of flattery and quiet diplomacy has made Britain the first nation to sign a trade deal with Mr Trump. The US agreed to eliminate the 25 per cent duty on British steel and aluminium, a lifeline to the ailing British steel industry, for which the US is an important export market. American tariffs on up to 100,000 British cars will also be reduced to 10 per cent, down from the 27.5 per cent rate Mr Trump initially announced. The US is the primary export market for British cars. The number of vehicles now subjected to preferential duties is more or less equal to the volume of British car exports. American and British beef farmers will also be free to sell meat to each other's markets. However, the limitations of the new trade deal are equally important. To start with, Britain is still subject to a 10 per cent US tariff imposed on almost all trading nations. Britain's pharmaceutical sector, accounting for around 15 per cent of all British exports to the US, is merely promised 'preferential treatment', a concept whose meaning remains obscure. As a result, leading British pharmaceutical companies such as GSK and AstraZeneca remain concerned about Mr Trump's intentions. And problems with Britain-US trade in services, particularly digital services, remain unaddressed. As British Ambassador to Washington Peter Mandelson said, the agreement is merely a 'springboard' for further trade liberalisation. The only meaningful conclusions that America's other trading partners can draw from the deal signed with Britain are that the US administration prefers agreements on individual sectors of the economy, rather than negotiating overall free trade treaties. Washington also remains determined to push for more unrestricted access for American farmers. Apart from beef, these problems remain unaddressed even in the latest deal with Britain. But beyond this, the Britain-US agreement offers few clues to other trading nations, and no clues to Chinese negotiators now sitting down to trade talks with their US counterparts. Jonathan Eyal is based in London and Brussels and writes on global political and security matters. Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
09-05-2025
- Politics
- Straits Times
A reformer and a reconciler: What Pope Leo's new reign might bring
Newly elected Pope Leo XIV - Cardinal Robert Prevost of the United States - appearing on the balcony of St Peter's Basilica, at the Vatican, on May 8. PHOTO: AFP News analysis A reformer and a reconciler: What Pope Leo's new reign might bring LONDON - From the moment Pope Francis passed away, it was evident that the battle to pick his successor as leader of the world's Catholics would be between reformers determined to continue the late Pope's modernising efforts, and traditionalists eager to prevent the Catholic Church from going down the road of what they dismiss as heresy. Most observers predicted a long, drawn-out battle between well-known candidates, made even more complex because the Conclave– the Pope's electoral body – is the largest ever, with no less than 133 cardinals from every far-flung corner of the world entitled to vote. In the event, the Conclave lived up to its history of producing surprises. Far from being locked in interminable disputes, the cardinals needed fewer than two days of deliberations and only three rounds of voting to agree on a successor - a much shorter process than the election of Pope Francis back in 2013, which came after five voting rounds. But the bigger surprise is that none of those considered initially front-runners made it; instead, and for the first time, the new Pope is a United States-born prelate, the 69-year-old Robert Prevost, who will reign as Pope Leo XIV. The choice is clearly a compromise. Pope Leo is regarded as a reformer, very much in the mould of his predecessor. Yet he is also likely to take a less abrasive and confrontational line than the late Pope Francis, and seek reconciliation with the traditionalist wing of the Church. Interpreting the politics of the Vatican is an art, not a science; much depends on deciphering trends by piecing together bits of seemingly unrelated information. However, in the case of the new Pope, his reforming tendencies are pretty evident. The Chicago native spent most of his adult life as a missionary in Latin America. He was clearly a favourite of Pope Francis, who swiftly elevated him to the rank of bishop, and then continued conferring on him top positions. And Cardinal Prevost's last position before his accession to the Papal throne was that of evaluating and recommending who should be appointed to the highest ranks of the Catholic Church, arguably one of the most powerful jobs in the Vatican. Only those who agreed completely and uncritically with Pope Francis could have experienced such fast promotions. Cardinal Prevost's decision to take up the name of Leo XIV is also a subtle hint at his reforming tendencies. The last Pope to be called Leo was an Italian prelate who became head of the Catholic Church in 1878 at almost the same age as the current Leo. And like the current Pope, Leo XIII ascended to the Pope's throne at a time of rapid industrialisation and technological change, trends he embraced wholeheartedly at a time when most of the Catholic Church viewed technological and social progress as a menace. The Leo of the 19th century is remembered for steering the Catholic Church towards promoting social justice. He established soup kitchens for the poor and shelters for the homeless. He viewed technological inventions as an opportunity rather than a threat to the Church and morality. Leo XIII was the first Pope to have his voice recorded on audio tape, and his movements immortalised in film. And, perhaps just as significantly, the 19th century Leo established the Catholic University of America in Washington, DC., North America's most distinguished institution of Catholic religious learning. It is clear why the current Pope regards the name of Leo as an inspiration to follow. Yet, at the same time, the new Pope has also offered early hints that he intends to respect old-established Church traditions, unlike the late Pope Francis. In 2013, at his first public appearance after his election, Pope Francis refused to wear the fur-trimmed red velvet mozzetta, a short cape traditionally worn by Popes, or the red shoes usually sported by a new Pope. But the new Pope reverted to the old attire, a tiny gesture of reconciliation with traditionalists, yet one that all Church officials surely noted. Only time can tell what foreign policies the new papacy may be. However, it is clear that, given his experience, Pope Leo XIV will maintain his interest in both North and Latin America; few can be more familiar than he with the epic confrontations between traditionalists and reformers in the Western hemisphere. One of the key challenges facing the new papacy will be its policy on China. The Vatican's 2018 agreement with China to share power with Beijing in the appointment of Catholic bishops is defended by its originators as the only way of safeguarding the rights of Catholic believers in the Communist-ruled country. However, critics have argued that the deal seriously compromises papal religious and moral authority. The chief architect of the China deal was Cardinal Pietro Parolin, the Vatican's Secretary of State, who heads all the Holy See's political and diplomatic functions. Cardinal Parolin was also considered a front-runner to become Pope, and some Chinese officials dropped heavy hints that his elevation to the papacy would be viewed very favourably in Beijing. Yet now that Cardinal Parolin had failed to be elected, it remains to be seen whether he will continue to exercise the same role and influence over the new Pope. But if the Chinese are disappointed, US President Donald Trump can at least claim some satisfaction. Just before the latest Conclave started, Mr Trump circulated a mock photograph of himself dressed as the new Pope. The prank, dismissed by the US President as just a joke, outraged many Catholic believers. Mr Trump duly failed to become a Pope. But fate did grant Mr Trump's other wish: the new Pope is an American. 'It is such an honor to realise that he is the first American Pope,' the President wrote on Truth Social. Jonathan Eyal is based in London and Brussels and writes on global political and security matters. Join ST's Telegram channel and get the latest breaking news delivered to you.
