US-China relations are widely expected to deteriorate. In contrast, KKR’s Vance Serhuk is more optimistic, believing that there is potential for the two to pursue «big, beautiful deals».
The worsening relationship between the US and China is widely considered to be the consensus, especially under President-elect Donald Trump who has made various negative comments, including the threat of high import tariffs.
But this is not just a Republican matter. Even under Democrat Joe Biden, the two have also competed with policies such as US semiconductor export restrictions and outbound investment screening. China has also countered this with its unreliable entity list and counter-espionage law.
«[W]e've seen in the last four or five years, both US and China have adopted what really are unprecedented finance, trade, technology policies directed against each other,» said Vance Serhuk, KKR Global Institute executive director, during Bank of Singapore's «2025 Outlook Conference». «These are really profound and powerful changes that have been put in place by both sides as they are gearing towards this kind of zero-sum competition»
Dealmaking Hopes
Despite the geopolitical risks, Serhuk remained hopeful for the potential of more peaceful times ahead under the incoming president, who has a penchant for dealmaking.
«President Trump, I think, generally, begins most negotiations by punching the other guy in the face. That’s his approach,» he remarked.
«I think that the question is going to be whether, as we get further into the Trump administration, there may be more receptivity for not just competition, but dealmaking, and on what terms. So I would not rule out the possibility that while we will unquestionably have intensification of competition in some areas, I think we should also hold open the possibility that we may see, again, some interest in the pursuit of big, beautiful deals.»
Southeast Asia Opportunity
On Southeast Asia, Serchuk believes there will be greater US interest in countries like the Philippines, Vietnam and Singapore which he called «net beneficiaries» from the deterioration of US-China ties in areas like supply chain diversification.
«I remember when I was in government – this is now 10, 15 years ago – even getting people in the US Congress to pay attention to Southeast Asia was very hard,» recalled Serchuk, who was previously a senior national security advisor to Senator Joseph Lieberman of Connecticut and member on the Senate Homeland Security and Governmental Affairs Committee. «Today, that's not a problem, for better or for worse.»
India: Rare Success Story
According to Serchuk, there have been «very, very few true, consistent, bipartisan success stories of grand strategy for the United States in the 21st century». The partnership with India is one such example.
«It really began at the very end of President Clinton, accelerated under President Bush with the civil nuclear agreement, continued under President Obama, embraced by President Trump, embraced by President Biden,» he explained.
«Geopolitics is at the heart of that story. I think a lot of people on both sides are saying: we hope for the best with respect to China and its future but let's also hedge our bets geopolitically. And that's been an enormous tailwind behind India-US relations. I think that that's likely to continue to be the case for the period ahead.»
Japan, South Korea Outlook
On Japan, Serchuk said that the alliance with the US is likely to persevere if the former country «steps up and is able to shoulder more» in terms of defense spending. And on South Korea, he said the relationship will depend on the extent to which the Trump administration attempts to «reinvigorate diplomacy with the North», though he noted that Seoul will probably see new leadership in 2025.
«When we look at where we are in the world right now, what we see is a larger secular shift from a world of benign globalization to one of great power competition, which is profound and has a series of consequences that will transcend the change of administrations,» Serchuk added.
