Why America’s Asia strategy still lacks economic anchors

[ASIA] In June 2015, I flew aboard a US Marine Corps Osprey over the Malacca Strait alongside then–Defense Secretary Ashton Carter. The flight was as symbolic as it was strategic—a vivid demonstration of American military commitment to Southeast Asia. But Carter’s message went beyond firepower. In interviews, he championed the Trans-Pacific Partnership (TPP), calling it “as important to me as another aircraft carrier.” He wasn’t exaggerating. Trade, not just troops, was meant to cement America’s role in the region. A decade on, the carrier is still here—but the TPP is not. And while China has deepened its economic entrenchment, Washington’s Indo-Pacific strategy remains overmilitarized and commercially underpowered. This is no longer a tactical oversight. It’s a strategic liability.

The Defense-Heavy “Pivot” That Never Balanced

The Obama administration’s “rebalance to Asia” promised a comprehensive shift—military, diplomatic, and economic. Ashton Carter, a seasoned Pentagon technocrat, recognized early that military deterrence needed to be coupled with trade integration. That vision collapsed in 2017 when the Trump administration unilaterally withdrew from the TPP, a 12-nation deal that had been painstakingly negotiated to set 21st-century trade rules—and strategically exclude China.

Since then, Washington has tried to fill the vacuum with military deals, freedom of navigation operations, and the occasional diplomatic gesture. The Indo-Pacific Strategy of 2022 reinforced this approach, reaffirming alliances with Japan, the Philippines, and Australia. Yet there’s been little progress on a robust economic counterweight. The Indo-Pacific Economic Framework (IPEF), announced by the Biden administration, lacks market access commitments—the very thing regional partners want most.

Meanwhile, China has not stood still. It has signed the Regional Comprehensive Economic Partnership (RCEP), joined ASEAN+3 financial dialogues, and pushed the yuan deeper into cross-border settlements. By 2023, China had become the largest trading partner of every ASEAN country. In contrast, the US is perceived as a security partner with no credible economic offer. Even defense-leaning states like Singapore and Vietnam have voiced concern over the imbalance. “America’s absence from regional trade is a strategic void,” said Bilahari Kausikan, Singapore’s former top diplomat, in a 2024 forum.

Strategy Without Trade Is Just Signaling

Military presence without economic entanglement is not strategy—it’s symbolism. China understands this well. Its Belt and Road Initiative may be fraying at the edges, but it has built infrastructure, pipelines, and ports that tie developing Asia to Beijing’s economy. The US, on the other hand, offers aircraft carriers but no long-term industrial integration.

There are historical parallels. During the Cold War, the Marshall Plan and post-war trade agreements solidified US leadership not through deterrence alone, but through shared prosperity. Washington isn’t offering a modern Marshall Plan for Southeast Asia—it’s offering war games and infrastructure “capacity building.” That’s not enough.

What’s more, the refusal to revisit trade deals has bipartisan roots. Trump walked away from TPP, but Biden hasn’t revived it. Domestic political risks—from protectionist unions to populist backlash—have paralyzed meaningful trade talks. The result is policy incoherence: military escalation abroad coupled with economic retrenchment at home.

Contrast this with Japan and South Korea. Both nations continue to engage ASEAN on trade, development financing, and industrial cooperation. Japan’s Free and Open Indo-Pacific concept includes real economic deliverables—supply chain partnerships, digital trade initiatives, and investment promotion. The US risks being outflanked not just by China, but by its own allies.

What Washington Needs to Relearn About Economic Statecraft

To regain credibility in Southeast Asia, Washington needs more than defense cooperation. It must offer market access, capital, and shared development. This doesn’t require a full return to the original TPP. But it does require a serious rethink of trade dogma.

The region wants rules-based engagement—not handouts or lecturing. That means digital trade frameworks with enforceable rules, green energy investment with shared ownership, and industrial corridor deals that local governments can sign onto. Washington has the leverage—its technology, education, and financial systems are still deeply attractive. But that leverage only works if it's put on the table.

IPEF, in its current form, doesn’t meet that threshold. Without binding rules or preferential market terms, it reads like a policy memo, not a strategic offer. ASEAN leaders are too polite to say it out loud, but their private skepticism is palpable.

The political risk of trade deals in the US is real. But the strategic risk of not doing them is greater. In a region where economic alignment increasingly shapes security preferences, Washington’s silence on trade is louder than any carrier strike group.

Our Viewpoint

America's Indo-Pacific strategy is still playing defense when it should be building alliances on offense—through trade, not just treaties. The withdrawal from TPP wasn’t just a policy blunder. It was a long-term strategic error that continues to undermine US influence in Asia. If Washington wants to compete with China’s economic gravity, it must offer more than deterrence—it must offer deals. Defense might get you in the room. But only trade keeps you at the table.