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Trump thinks he holds the ace. He reads its face as saying 'short-term pain for long-term gain' for the US. But turn to the other face of the card. It only shows the joker. |
Tariffs benefit no one in the short-term and will only embed rancor in the long-term. It is extremely stupid of the US to label China a strategic rival. Once done as it has been by Trump's US hawks, how does anyone expect the country so labeled not to react, let alone a China whose mass, velocity and development wisdom have created not only linear but also angular economic momentum for the whole world?
Where Trump and his bunch of half-past-sixes have failed to note is China's inviolable position at Pareto optimality. Yet in playing with fire, he is trying to cross China's red-line which his hawks have known in advance.
If she bends so that the US can walk in and elbow her government to change her laws - furthermore using words only dictated by the US which is why the talks have stalled today, how will anyone in China want to follow the amendments since the US as a foreign power has already labelled her a 'strategic rival'?
And since they naturally won't in much the same way US citizens won't expect China to tell the US government to change its federal constitution, how can the enforcement that the US wants done on China soil be carried out successfully even if there is a pack of regulations stacked up like a pagoda?
Humor me, let's say it is however done. You reckon next the natives in China won't rankle when they see their own officials cuffing their own kins folks on tv over rules rammed down their throats by a foreign power which has tarred their country a strategic rival?
The result will be discord and dissent domestically and the burning of the US flag besides its goods on the streets. When that happens, how will imports of US goods - even if import tariffs by China are zero-ed - ever be possible next? How will that then serve Trump's desire to reduce the US trade deficit with China?
Let's say that is ignored and the US factories in China relocate back to the US. Where are they going to find US workers when the US economy is at near full employment today?
And even if possible, would US rust-belt workers want to labor 12-hour days at China wage rates in order to make US goods whose prices will still be attractive to US consumers whose middle-class cohorts are already scrutinizing every cent of their household bills?
Use robots? Their very success in displacing US white-collar workers will then expand to displace other US workers so that full employment today gets shafted by expensive machines tomorrow.
Let's also say the US factories move into other countries. That will take more time than the quarterly periods for their shareholder reports whose performance either shores or depresses their stock values, ROE dividends, and the US pension funds. Moreover, it is not so easy to find, train and activate a large foreign workforce when China workers have already been doing the same work for the last three decades at the least.
More importantly, it will only move the the US trade deficit with China to US trade deficit with other countries when it is the US' own current account depicting its overspending on such busy-body things as military adventurism at the expense of infrastructure upkeep which is the key issue.
And the US can't solve that because its trillion dollar debt is predicated on overspending by the ease with which it prints the US dollar at the expense of other sovereign currencies; doesn't that mean the US is the real currency manipulator of the world by default of its dollar being the reserve trade currency?
So it fecklessly blames China instead for all its woes. Let me take out my valyrian-steel scimitar from its old scabbard now. Is China the default bogeyman for all of the US' woes that are only the creation of its own political flim-flam's until they now are trying to make China pick up their tabs they throw on the floor?
The US tars China's government as authoritarian yet needs it to open China's market in order to regulate it but now to be under US aegis by remote control. And all that while depending on which US president happens to sit in that oval room which means there is no fundamental stability in the way the US as a country can try to influence the policies of any other sovereign nation let alone one whose tea was drank with wild abandon at the Boston tea party.
And that absence of a fundamental stability has shown up in the way the Trump's US has been running the trade talks. It keeps on adding one demand after another, then uses its media to bring up old matters in order to continue commanding the global narrative whose objective is solely prejudicial to throw China in a continuously bad light. From the comments made on some of those newspaper headlines and content, there is no escaping the conclusion that the commentators were merely accepting issues raised without pre-qualifying their backgrounds or seeing things from the other point of view, furthermore doing so with only one piratical eye on personal gain from stock market plays of the week by raising the ante of antagonism.
Let us be clear on one thing. Because of her population size, China's per capita GDP is still a tenth of the US'. She remains a developing country although her historically unparalleled development has shown she has an advanced-economy mindset which offers to the whole world an alternative and more globally positive narrative of settling peace and growing prosperity even in the face of US hegemonic alt-right revanchism.
Given that she is a developing country with her own governmental model that has successfully run a country her size, who gives the US any right to now use rules that it made to try and upend her present machinery and future progress while at the same time telling her to buy more of US goods that is predetermined by a US government which has only targeted her as a strategic rival whose peoples and companies are to be blocked from cooperative ventures, furthermore on pains of blackmailing kidnappings?
China has just celebrated her Centenary of a hundred-years of peaceful rise. Which century is the US still trying to get back to in order to maintain its alligator superpower status?
On her own, China has been making strident efforts to reform her economic and legal systems and if the US had been more patient, she would have closed the loops within her own national model of development and progress.
What the US is trying to ruffle - despite realizing those reforms are already being done - is to try and make her react the other way - because its ultimate objective is because it doesn't want her to achieve global parity with the US once she has done so. Which of course is a hypocritical antithesis to what it appears to be demanding all this while.
Meanwhile the world's economies are being sundered so that one grown man but still with titty milk on his lips can continue to stroke his ego as the sun sets in the west because any uncertainty and risk as outcome of a stalled resolution from the talks will stifle the flow of investment and capital needed to produce and move goods through the world's supply chains that maintain supply for demand to continue. Now, all pirouette towards the cusp of a global recession to no one's benefit because the US under the unstable gyrations of its Night oops Tariff King started it all with reckless abandonment of the real aspects, factors and consequences of its unilateral and immature actions.
Let's be blunt. The US is just trying to do to China what it had done to the USSR politically and Japan economically. Therefore, how does it expect China not to respond?