Peace, Trade and China

As the Trump administration wages its “National Security”-justified trade war with nations like Canada (where the actual trade imbalance tilts towards the U.S.!) and the European Union, our staunch allies over centuries of conflicts and trade, American farmers are watching their crops wither and die as export markets vaporize in retaliation, automakers try and reprice their vehicles and construction costs skyrocket into unaffordability due to much higher steel and aluminum costs. China and Russia are overjoyed at the increasing American isolation from not only its former allies… but the world. Every step that the United States takes under an unfortunate and self-destructive “America First” action delights those world powers seeking to replace American power and influence in the world.

Sure, the trade war with China isn’t pleasant for China, but the net result of American policy seems to be an overwhelming gift to the People’s Republic in almost every other way. Trump is pushing China, on the one hand, and courting it on the other. Still, the trade war that Trump has ignited seems to be the same kind of trade war that exploded in 1930 under the Smoot-Hawley Tariff Act, an attempt to level the playing field and create more jobs at home to counter The Great Depression. Smoot-Hawley did what most trade wars actually do: those tariffs deepened and extended that depression, raising prices at home without those off-setting jobs. The economy plunged deeper into that horrific jobless era. But Trump implemented those tariffs anyway.

“‘In light of China's theft of intellectual property and technology and its other unfair trade practices, the United States will implement a 25 percent tariff on $50 billion of goods from China that contain industrially significant technologies,’ Trump said in a statement. ‘This includes goods related to China's Made in China 2025 strategic plan to dominate the emerging high-technology industries that will drive future economic growth for China, but hurt economic growth for the United States and many other countries.’

“Trump first announced the tariffs on Chinese goods in March, but a preliminary deal following negotiations with the Chinese government appeared to put the trade restrictions on hold. But, the White House announced at the end of May that the tariffs would move forward despite the deal.

“In addition to Friday's [6/15’s] tariffs, the White House is also considering an additional set of tariffs on another $100 billion of Chinese goods. In the statement, Trump said those measures would be implemented only if the Chinese strike back at Friday's move.” Business Insider, June 15^th. China is retaliating, focusing heavily on cutting imports and raising its own tariffs on American exports from Trump-supporting red states. It’s an easy way to sow even more dissension into an already highly-polarized adversary. Chinese diplomats are tripping over each other in an effort to build bridges with countries that Trump has sorely alienated, including in Europe and Canada.

And while there is indeed a positive aspect of Donald Trump’s recent summit in Singapore – he did reduce the tensions with and nuclear threat from North Korea by opening dialog with that rogue state – Trump’s litany of gifts to North Korea, without tangible reciprocity, have moved China light years ahead in their desire to replace the United States’ sphere of influence, particularly in Asia. What’s more, China’s constant objections to a U.S. military presence in South Korea, Taiwan, Japan and the Philippines, particularly the stationing of missile defense systems and nuclear weapons, is being sated as the United States unilaterally commits to stop joint and routine military training exercises (readiness drills, if you will) with South Korea and seemingly generally to reduce its military commitments in the entire region.

Despite Japanese fears of being abandoned as the United States rolls back it regional military presence, an obvious desire by the Trump administration to pull back its troop strength and military tech hardware to save money, the U.S. is clearly dismantling a military umbrella and suggesting that Japan develop its own nuclear self-defense strategy. The message to all of Asia is that they can no longer look to the United States as an ally against regional aggression.

With the United States pulling back in the region, it is increasingly obvious to all that dealing with the United States as a regional Asian power is too risky; China is now the clear and unrivaled power in that part of the world, a goal which China has pursued as its main Asian policy direction for decades. Without lifting a finger, Donald Trump just gave China their most cherished wish… and the PRC didn’t have to lift a finger to get there. Trade war? Sure! But China has to be deeply appreciative Donald Trump greatest gift to Xi Jinping: East and Southeast Asia are now squarely in China’s sphere of influence… and no longer the United States!

I’m Peter Dekom, and Donald has turned into a blessing for our most traditional global adversaries: China and Russia.