Trump Warns Xi: Trade War With China Begins Monday
ZeroHedge, Aug. 12, 2017
As if there weren’t enough geopolitical stress points in the world, late on Friday night President Trump told Chinese President Xi Jinping that he’s preparing to order an investigation into Chinese trade practices next week, according to NBC. Politico confirms that Trump is ready to launch a new trade crackdown on China next week, a step that Trump delayed two weeks ago under the guidance of his new Chief of Staff Gen. Kelly, but now appears imminent. It is also an escalation which most analysts agree will launch a trade war between Washington and Beijing.
Trump on Monday will call for an investigation into China over allegations that the nation violated U.S. intellectual property rights and forced technology transfers. Officials expect U.S. Trade Representative Robert Lighthizer to open an investigation against China under the Trade Act of 1974. The ordering of the investigation could lead to steep tariffs on Chinese goods.
Trump had planned to launch the trade investigation more than a week ago, but he delayed the move in favor of securing China’s support for expanded U.N. sanctions against North Korea, a senior administration official said.
The pending announcement also comes amid heightened tension between the United States and China, even after the Trump administration scored a victory in persuading Beijing to sign onto new United Nations sanctions on North Korea. Still, Trump has delayed trade action before, amid pressure from business groups and major trading partners.
Two Commerce Department reports examining whether to restrict steel and aluminum imports on national security grounds were expected by the end of June but have been bottled up in an internal review. Trading partners raised threats of retaliation and domestic steel users complained of being hurt by price increases and restricted supply.
The trade investigation will immediately strain relations between the U.S. and China. Should Trump follow through, the move will lay the groundwork for Trump to impose tariffs against Chinese imports, which will mark a significant escalation in his efforts to reshape the trade relationship between the world’s two largest economies. In other words, even if there is now conventional war announced with either North Korea or Venezuela, Trump’s next step is to launch a trade war against China.
When reports of the potential trade investigation first emerged more than a week ago, China’s Commerce Ministry stressed the importance of U.S.-China trade ties and of resolving differences «through dialogue and consultation.»
Trump’s decision could be perceived as an attempt by the U.S. government to crank up the pressure on Beijing to rein in North Korea.
As CNN adds, the trade investigation is expected to be only one part of a multi-pronged push by the Trump administration to counter perceived Chinese trade abuses. But analysts have cautioned that Trump faces a huge challenge in his desire to significantly reduce the U.S. trade deficit with China, which last year stood at more than $300 billion.
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Meanwhile, China state media signaled the nation would hit back immediately against any trade measures, as it has done in past episodes.
Chinese officials have mulled stemming U.S. imports should retaliation be necessary. Soybeans have been singled out as the top product that can be dialed back. Autos, aircraft and rare-earth commodities have also been identified as potential categories for restriction.
Of course, ultimately the big question is whether the Trump administration is willing to risk a trade war as it ups the ante. The problem is that as Trump gets increasingly more focused on distracting from his numerous domestic scandals, he is likely to take ever more drastic action in the foreign arena, whether that means «hot war» with North Korea, or trade war with China.
Who stands to lose — and win — if the U.S. takes aim at the unbalanced trade relationship with China? With total bilateral trade of more than half a trillion dollars a year, the list of potential losers is very long.
And while conventional wisdom is that the US has a chronic trade deficit with China — it does — the U.S. also runs a nearly $17 billion trade surplus with China for agricultural products. China consumes about half of U.S. soybean exports, America’s second largest planted field crop. China is also a major buyer of U.S. aircraft, perhaps the only areas of manufacturing where the U.S. retains a competitive edge (though not for much longer). The U.S. also has an $8 billion dollar trade surplus with China in the transportation equipment category.
We will not discuss another, more troubling, aspect of conventional wisdom, namely that trade wars almost inevitably lead to real wars. Aside for the US military industrial complex, there are no winners there.
Здешние политиканы, «эксперты», подконтрольные ЦРУ СМ»И» нахваливают псевдодемократическую, якобы процветающую Америку.
Те, кто любит «наших американских (государственных) партнеров», «забывают» о грязных, злых уродах США. О таких, как коварный и крайне опасный мошенник, расист, лжец, неофашист и убийца Дональд Трамп. И о таких, как порочный Конгресс, кровавые милитаристы США, нацистские ФБР — ЦРУ, лживые американские СМ”И”…
Арнольд Локшин, политэмигрант из США