Missed Milestones: Evaluating The Last Four Years in the EAP Region and Unseized Opportunities Under President Trump

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Chairwoman Kim, Ranking Member Bera, distinguished members of the subcommittee and staff, thank you for having me here today.

It is difficult to overstate Asia’s significance. It is home to 60 percent of the world’s population, three of the five largest national economies, over 40 percent of global GDP, an estimated two- thirds of the world’s economic growth, 41 percent of international exports, and 37 percent of global imports. It claims half of the world’s active military personnel, six of the ten biggest armies, four of the ten highest defense budgets, five of the nine nuclear-weapon states, and six of the ten major carbon emitters. It is also the region in which China, America’s chief geopolitical rival, is most active.¹

To respond to China’s rise and seize the promise of Asia’s dynamism, the United States has since at least 2011 attempted to pivot, or rebalance, its foreign policy from other regions to the Indo- Pacific. The effort has been more difficult than many expected, and the United States remains a global power with interests and commitments in multiple areas. Yet the attempt to devote greater time, attention, and resources to Asia was the correct strategic impulse when first announced, and it remains the right strategic approach today.

As a result, the opportunity to evaluate the Biden administration’s approach to the Indo-Pacific, and to draw lessons from the past four years, is an important exercise. I thank the subcommittee for calling this hearing.

For all its departures, the Biden administration’s diagnosis of Asia—and of China in particular— bore striking similarities to that of the first Trump presidency. From the outset, the Biden administration identified China as its top priority and the Indo-Pacific as the region deserving of its greatest attention. Senior officials justified policy approaches in other regions—the withdrawal from Afghanistan, the early effort to stabilize relations with Russia, the attempted reentry into the Iran nuclear deal, and more—as at least partly necessary to execute a rebalance to Asia. The administration retained key elements of its predecessor’s approach, such as imposing tariffs on China, remaining outside the Trans-Pacific Partnership (TPP) trade agreement, seeking to build up sources of domestic strength, and attempting to address the deteriorating regional military balance. The Biden administration had a number of notable successes and set the foundation upon which President Trump and his team, alongside Congress, can and should build.

Indo-Pacific Diplomacy

From the outset, the Biden administration proved itself ambitious and creative in expanding diplomatic ties with key Indo-Pacific countries and subregions. It elevated the Quadrilateral Security Dialogue (Quad) to the leaders’ level and coordinated an ambitious effort to supply COVID-19 vaccines to Southeast Asia. In the Pacific Islands, after the Solomons announced a new security agreement with China, the administration took a flurry of actions to demonstrate greater American engagement in the region, including a summit with leaders in Washington, establishing new diplomatic outposts, and renewing the Compacts of Free Association. Biden hosted ASEAN leaders at the White House as well, stepping up high-level diplomacy with what is perhaps the Indo-Pacific’s most contested region. The president’s August 2023 meeting at Camp David with the Japanese and South Korean leaders marked the beginning of a new era in trilateral cooperation, and the administration brought Japan and the Philippines together in new trilateral formats as well. While the Biden administration originally sought to cooperate with China in areas of mutual interest, like climate, global health, and nonproliferation, the meager fruits suggest that competition will, for the time being, chill any opportunities for significant collaboration. Nevertheless, bilateral diplomacy with Beijing remains important given the potentially catastrophic consequences of crisis or conflict.

After the Russian invasion of Ukraine and Hamas’s attack on Israel, U.S. diplomatic and military bandwidth was stretched by demands in Europe and the Middle East. Yet engagement with the Indo-Pacific cannot simply await peace and stability in other regions of the world; Washington will need to prioritize the Indo-Pacific even as other crises and conflicts emerge in other places. Key to a sustained focus on Asia is balancing diplomatic attention across a large portfolio of U.S. relationships and interests, taking care to ensure that activity in the Indo-Pacific does not get crowded out by demands elsewhere.

Advances in Defense Posture

From the outset, the Biden administration focused its defense policy on the Indo-Pacific, and the Department of Defense (DoD) labeled China its “pacing challenge.” In May 2021, DoD indicated that in the new fiscal year it would invest $66 billion in the Indo-Pacific region, including $5.1 billion for the Pacific Deterrence Initiative. Two months later, on a visit to Manila, Secretary of Defense Lloyd Austin secured the reactivation of the Visiting Forces Agreement, the pact under which U.S. troops rotate through the Philippines—and which former President Rodrigo Duterte in February 2020 had vowed to terminate. In August 2021, the United States conducted the largest military exercises in the western Pacific since the Cold War.

After this start, the administration won new base access for U.S. troops in the Philippines and secured a posture arrangement with Papua New Guinea. It formed AUKUS, the defense technology sharing agreement among the United States, Australia, and Britain, the keystone of which was Washington’s pledge to help Australia acquire nuclear-powered submarines. The administration also revised U.S. force posture in Japan and secured an agreement on defense industrial base cooperation with India. That all these efforts were intended to balance against China barely needs mentioning.

In terms of overall military resources, however, the picture is less rosy for the Indo-Pacific. The United States today has more troops stationed in Europe than it did in 2011, when the pivot to Asia was announced. The U.S. Navy has contracted over the years, seeing only a minor increase in the number of ships over recent years. Submarine production is behind schedule. Reflecting the effort to shift regional priorities, 2021 marked the first year in three decades during which an aircraft carrier did not operate in the Middle East. By 2023, however, two carriers did so, responding to attacks on Israel.

While the net deployment of U.S. military resources in Asia has been essentially flat for over a decade, China has made increases in virtually every area over the same period. Beijing now possesses the world’s largest navy, which is disproportionately focused on the Pacific as opposed to America’s globally dispersed presence. Beijing has the largest air force in Asia, is completing its third aircraft carrier, and has developed hypersonic weapons. It is engaged in a major expansion of its nuclear arsenal and has acquired counter-space capabilities to threaten U.S. and allied satellites. Beijing has expanded a naval installation in Cambodia and reached a security agreement with the Solomon Islands.

Such indicators underline the challenge ahead for the Trump administration. The Biden administration made real, concrete, and positive moves to right the military balance in the Indo- Pacific. There remains, however, much more to do—both in the region and as a matter of overall budgeting and capability.

Economic Policy

As during the first Trump term, the Biden administration refocused its economic efforts in the Indo-Pacific away from ambitious trade agreements and toward defensive measures. It imposed controls on the export of semiconductors to China, restricted Chinese electric vehicles and automobile software, and pursued an industrial policy aimed at reducing supply chokepoints and maintaining a technological edge over China. Its one attempt at an affirmative trade policy resulted in the Indo-Pacific Economic Framework, a set of agreements that conspicuously avoided any market opening mechanisms.

In the absence of a positive U.S. trade policy, Beijing has sought to fill a void. Already a member of the Regional Comprehensive Economic Partnership, it has also applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the successor to the TPP agreement. While the Chinese market remains far less open than that of the United States, Beijing nevertheless seeks to contrast its own market-opening efforts with American enthusiasm for tariffs, export controls, Buy America provisions, and industrial policy. The new administration should pursue opportunities to expand trade and investment with friends and allies in the Indo-Pacific, for both economic and strategic reasons.

The Biden administration used foreign aid, including through institutions like the Development Finance Corporation, to bolster friendly countries, compete with China for influence, and catalyze private sector investment. Even before the start of very large assistance packages for

Ukraine, however, the Indo-Pacific—home to more than half the world’s population—never received more than ten percent of overall foreign assistance. Reflecting on the disparities, a 2023 Senate Foreign Relations Committee staff report wisely recommended that the United States should “seek additional resources and allocate a larger portion of foreign assistance to the Indo- Pacific,” invest more in the State Department’s Indo-Pacific operations, and incentivize other

U.S. agencies to “increase their grants, loans, and other financing activities in the Indo-Pacific.”²

Opportunities for a New Administration

The Biden administration made significant strides in the Indo-Pacific over the past four years, even while attending to acute crises in Europe and the Middle East. It saw particular successes in diplomacy and military posture. Yet given China’s increasing military strength, diplomatic ambition, and technological advancements, there remains a long way to go. The past four years have established a foundation that the Trump administration, and Congress, would do well to build upon.

As they do so, it is worth keeping in mind the ultimate objective of U.S. efforts in the Indo- Pacific. The overarching goal of U.S. foreign policy should be to preserve the core pillars of the international order, even as specific rules and institutions change and adapt. The United States benefits from, and has a vital interest in maintaining, a global order governed by rules rather than brute power—one in which countries enjoy sovereignty, disputes are resolved peacefully, markets are open to trade, human rights are considered universal, and democracy can flourish.

Since the 1940s, Washington has opposed hostile spheres of influence emerging in Eurasia precisely because they threaten the United States’ desired rules-based order.

Today, China threatens to construct precisely such a hostile sphere of influence in Asia. It is aligned with Russia, Iran, North Korea in an “axis of upheaval” that seeks to replace a U.S.- dominated international order. Beijing’s military power has grown dramatically, making it more difficult for the United States to operate militarily across the region. Its economic weight has grown, permitting it to coerce countries in ways that violate their basic sovereignty. Its claims in the East and South China Seas run counter to long-standing maritime rules and threaten freedom of navigation, while its potential use of force against Taiwan could embroil the region in a disastrous conflict. Its illiberal activities crowd out the space in which democracy can thrive and promote the legitimacy of autocratic governance.

In this light, U.S. policy toward China should aim to ensure that Beijing is either unwilling or unable to overturn the regional and global order. That objective should broadly inform American efforts in the Indo-Pacific to serve U.S. interests and values by building a peaceful and inclusive region. The United States is not merely competing against China but working toward the preservation and extension of core international values that serve many other nations well.

Washington should emphasize that fact and act accordingly. In addition, it should pursue the following opportunities:

Elevate regional diplomacy. The Trump administration’s first meeting with Quad foreign leaders took place on its second day in office. This good, assertive step has already been followed by extensive diplomacy with regional leaders. As questions swirl about the President’s regional priorities, enthusiasm for tariffs, pursuit of positive ties with Russia, and more, high-level and sustained Indo-Pacific diplomacy will be at a premium. The administration should pursue regular presidential and cabinet-level visits to the region alongside issue-based coalitions in areas like technology. Congress has an important role to play here too, including via congressional delegations, parliamentary exchanges, and congressional resolutions that amount to diplomatic signaling.

Pursue a positive economic vision. The United States should and will identify areas of economic dependence with China that incur national security risk and pursue alternative arrangements. The aim of trading less with China in sensitive areas should generate opportunities for greater economic interaction with friends and allies. While a return to the TPP is politically impossible, narrower trade agreements in specific sectors are not. Sectoral agreements in areas like digital trade, clean technology, or critical minerals would set rules, reduce dependency on China, and signal renewed U.S. economic leadership. Free trade agreements with Japan, Taiwan, and New Zealand, for instance, could show that Washington remains in the business of expanding markets for American people and companies.

Increase defense spending and shift military resources. The United States cannot arrest the eroding balance of power in the Indo-Pacific, and meet its critical commitments elsewhere, without major increases in defense spending. At the same time, some military resources should shift from the Middle East and Europe to Asia.

For more than a decade, Washington fed the perception of U.S. withdrawal from the Middle East without obtaining a significant resource dividend. This amounted to the worst of all worlds: deep and costly engagement in the region while fanning the fears of abandonment. Washington should invert this equation by diminishing its military presence in the region while bolstering its commitment to act. Troop levels, air bases, maritime deployments, and more should decline in the Middle East, surging only when necessary for significant military operations, such as the initial effort to deter other actors from joining the Israel-Hamas war in the fall of 2023.

The ongoing degradation of Russian military power amid the war in Ukraine—and the prospect of an end to the conflict in 2025—is combining with European steps to increase defense budgets, acquire new capabilities, and enhance military production lines. Barring Russia emerging from negotiations with a strengthened position, its conventional military threat to NATO should be smaller than in previous years. That can allow the United States to pivot U.S. air and naval forces from defending Europe to new locations in the Indo-Pacific. This, it is worth emphasizing, should amount to a rebalancing rather than an abandonment of Ukraine. A peace agreement that leaves Russia ascendant would have deeply negative effects both in Europe and the Indo-Pacific.

Build on existing defense agreements. The Biden administration set a strong foundation for growth in key defense relationships. Washington should retain AUKUS and see it as a proof of concept, working to ensure quick, visible wins in pillar two’s area of development and delivery of emerging technologies. It should identify projects in which non-AUKUS countries like Japan, South Korea, and India can participate and, again, look for visible results in months rather than years. It should also build on the Biden administration’s posture moves, including by enhancing base resiliency in Japan and expanding facilities in the Philippines.

Avoid unforced errors. The new administration is moving quickly to differentiate itself from its predecessor, including on Asia policy. As it does so, it should take care not to shoot itself in the foot by eliminating or underfunding programs that have helped the United States bolster friends in the Indo-Pacific and contest Chinese influence.

The first Trump administration, for example, struck a deal with Nepal to supply $500 million in infrastructure financing.³ After five years of discussion, the government in Kathmandu approved the agreement, withstanding Chinese lobbying against it and committing $200 million of its own money. That funding is now on hold, along with a vast amount of U.S. foreign aid. Should it not resume, Beijing would be more than happy to step into the breach and to point out U.S. unreliability in the bargain.

Killing foreign aid programs that sharpen America’s competitive edge in Asia, underfunding defense, applying economic coercion to friends and allies, and lurching inconsistently between policies all raise doubts about U.S. long-term presence and power in the Indo-Pacific. By avoiding own goals, and pursuing the many opportunities before it, the new administration and the U.S. Congress have significant potential to bolster America’s position in the world’s most important region.