Description: Leaders of the so – called ASEAN Plus Three group China, Japan and South Korea agreed upon enhancing the financial security net around Asian countries by enlarging the Chiang Mai Initiative Multilateralization (CMIM) agreement. The enhanced mechanism would allow countries from the ASEAN bloc access towards joint funds for natural disaster crises and pandemics. CMIM mechanisms haven’t been used so far as they have entailed larger administrative approvals and supervisory control of the funds by the larger member states. The agreement’s current financial pool amounts to $240 billion with Japan and China contributing $76.8 billion, South Korea with a contribution of $34.4 billion and the remaining 10 countries from ASEAN jointly contributing $48 billion.
Impact: Global volatile financial conditions caused by Trump’s tariffs have precipitated the bolstering of unlikely regional alliances and the formation of multilateral strategic partnerships. Crises such as the Covid pandemic and recent natural disasters such as the Myanmar earthquake caused the expansion of the financial capacities in mechanisms such as the CMIM, which is also catalyzed by the tentative financial conditions caused by the US tariffs. Asian countries besides engaging in diplomatic efforts to subdue the effects of the US tariffs have also jointly reinforced the region’s economic partnerships with multilateral strategic agreements. China as the world’s second largest economy through methods of exercising soft power would further influence countries towards strategically aligning with their global aspirations, while countries like Japan and South Korea would look to differentiate their strategic partnerships as growing economies.