Marina Gruzer | 21 November 2024

Summary

• Central Asia’s geostrategic importance, due to its growing significance in raw materials exports and its proximity to Russia, China and Iran, combined with China’s economic influence may motivate continued US regional engagement. 

• While Trump has initiated increased US-Central Asian strategic and economic cooperation with the ‘Strategy for Central Asia 2019-2025’ policy, his second term is less likely to bring meaningful alternative economic opportunities for the region due to a more isolationist ‘America First’ approach.

• Despite Central Asia’s multivector diplomacy approach offering the US opportunities to increase economic influence, Sino-Central Asian relations are likely to remain consistent if Trump implements the strict 20% tariff on Central Asian goods.

As a region, Central Asia has typically not been a priority in US foreign policy initiatives outside of acting as a potential platform for US activity in Afghanistan. Despite this, the rising Central Asian prominence in raw materials exports and growing Chinese interconnectivity in the region has motivated increased US engagement. Under Trump’s presidency in 2019, the US adopted the “Strategy for Central Asia 2019-2025: Advancing Sovereignty and Economic Prosperity" initiative. This, as well as the initiation of the “C5+1” summit format between the US and the five Central Asian states under Biden, signals a growing bipartisan US interest in the region. The effort to counterbalance growing Chinese influence, as reflected in several previous administrations, is likely to encourage continued US engagement with Central Asian partners. While Central Asia’s multivector diplomacy strategy may offer some opportunities for increased US engagement, the US is unlikely to replace the predominance of well-established Chinese presence. Furthermore, Trump’s ‘America First’ policy risks weakening US economic influence among Central Asian producers. 

If Trump continues engagement in Central Asia, his administration is likely to focus on counterbalancing Chinese economic influence, compared to Biden’s efforts centred on encouraging democratic governance. Trump’s 2019-2025 strategy for Central Asia focused on supporting counter-terrorism capacity building as well as promoting US investment. Under this initiative, the US has invested ‘over $90 million into border security in Central Asia’ which included joint counter terrorism training exercises. Currently, China maintains an influential economic position in Central Asia via the Belt and Road Initiative which offers large-scale infrastructure and development investment. So far, key US investment has come in the form of $50 billion in credit, loans and technical assistance via US contributions to international development banks. However, this is unlikely to have a significant impact on Chinese influence, as current US foreign investment in the region is comparatively limited in scale and Trump is unlikely to direct significant funds to a region that is not an immediate priority. 

Alternatively, Trump’s own foreign economic policy could be fairly likely to push Central Asia closer to partners such as China and reduce the volume of US-Central Asian trade. Trump’s plan to implement a 20% tax on foreign imports risks creating counterproductive economic pressure on Central Asian exporters and could limit the volume of trade with the region, which is already volatile due to commodity price fluctuations. In the last five years, ‘U.S. exports to Kazakhstan have increased at an annual average rate of 14%, while imports from Kazakhstan rose by 27%’. The 20% tariff on Central Asian imports to the US may limit this trend as Central Asian exporters would be likely to search for alternative markets. 

Forecast

• Short-term

  • Trump’s 20% foreign import tax on all goods is highly likely to risk weakening the already fluctuating trade relations with Central Asia and, consequently, may push Central Asian producers closer to partners such as China.

• Long-term

  • With Trump’s ‘America First’ policy being unlikely to include significant alternative infrastructure investment for Central Asia, the region is highly likely to maintain strong relations with China. Therefore, the US is unlikely to pose a meaningful challenge to growing Chinese influence in this geostrategically important region.