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Abe and others now in Trump's bilateral sights should understand the US is ultimately setting a sanction trap on them. |
Trump is using his anti-China strategy to try and galvanize support to change the world order which was built on economic comparative advantage and which has spread prosperity to US corporations as investors and to emerging countries as producers working to earn those investments.
If it were not so, both investors and producers around the world would not be complaining against the US tariffs so much and the complaints are avalanching by the day; the US tariffs are only blunt instruments used as diversionary excuses for the US manufacturing sector not doing enough to upgrade itself over the years when other countries were growing theirs in order to provide employment for their many poor masses while the US was merely beefing up its own financial services sector as its banks marauded the world's stock and currency markets.
If Abe and others relent thinking they can adopt the EU strategy to strike up a moratorium on tariffs with the US pending discussions to avert Trump's threat to impose tariffs on Japan et al, the US will thus next have a blackmailing influence on the entire spectrum of sovereignty matters of their countries on threat of future tariff enactment en-route trade sanctions. Moreover, if the US tactic works, it will be maintained even post-Trump. Why else would any US administration give up something which has exclusively worked on its behalf - international hegemony from post-cold war military extension to now economic sanctions and tariff threats to next currency and thus interest rates and yields exclusivity?
Furthermore, in the case of Japan, its automakers are already making cars in the US so any threat of tariffs can be blunted in any bilateral trade negotiation. Which leaves agricultural produce and electronic white goods but US counter-tariffs on former will affect farmers as vote-swingers in Japan while the tariffs on latter will be no different from those on similar goods of China, many of which invested by Japanese concerns.
Furthermore, with the rise of oil prices, Iran and therefore the Middle East configuration falling under an existential threat, and the US now as a major oil producer, these issues will make it harder for oil-dependent countries like Japan to stay out of the US orbit of geo-economic influence just so to maintain their hard-earned market-shares now themselves under threat of MAGA which won't make that people OUTSIDE the US can afford, or even want.
There is another aspect. Bilateral agreements in a globalized international trade arena are a Bannon-Navarro attempt to balkanize the trading world as an antidote to Japan's flying geese formation that had counteracted US trade quota protectionism of the past.
If goods from one country are tariffed, their producers will offspring production in other countries. The US must have realized that tariffing those countries as well will only ultimately mean it has to tariff the entire world, ergo the members of the United Nations, since production can be made cross-border porous. Hence, the attempt at bilateralism to reconfigure the global free market to its own design.
But what is the motivation of that if not for personal interest over and above the growth of emerging markets for that matter the continuation of existing political administrations which should therefore ask whether they won't be getting a bad bilateral deal, furthermore delivered with a bayonet at the throat?
If such US-centric bilateralism takes root and becomes a norm in the near future, countries will still work around it in order to give their own peoples a chance to rise and carve their own destiny.
Doing so will however only complicate trade and therefore monetary policies which as one remembers from the subprime crisis only less than two decades ago will only lead to financial crises which have sundered and tottered most economies, and washed out gains accumulated from years of strive and hard work. After all, the world order works because countries didn't put all their eggs into one basket only. Instead they had practiced trade multilateralism which has enabled them to compensate for risks in one country with rewards from another.
Now chaos impends. All because the unstable dotard raining fire, fury and fear thought he was a stable genius.