New Year, New (Trade) War
The US and China may be headed for an economic clash.
China proposed that during the trip, Mr. Trump and his counterpart, Xi Jinping, unveil a plan to widen foreign firms’ access to China’s vast financial industry, according to people with knowledge of the matter. It was a move previous U.S. administrations had sought for years.
“Because it’s an economic enemy, because they have taken advantage of us like nobody in history. They have; it’s the greatest theft in the history of the world what they’ve done to the United States. They’ve taken our jobs.” — Donald Trump talking about China, 2015
For thirty years, Donald Trump — real estate developer, media personality, political candidate, POTUS — has been incredibly consistent about the issue of trade. He thinks other countries — in the 80s, Japan; more recently, China — use unfair trade and labor practices to cheat the United States. He may not be right, but he has been consistent.
For the first time, he’s now able to do something about it. The United States government has a variety of economic and diplomatic tools to “punish” trading partners.
Like most issues in international affairs, US-China trade relations are the threading together of long-term geopolitical trends. Specifically, China is slowing opening its economy to non-Chinese entities and, at the same time, American trade policy is becoming more protectionist. The result could be a stand-off between the world’s two largest economies.
Most American business people will disagree with the administration’s approach. American investors want access to Chinese markets, and American importers need access to low-cost goods. But that may not be enough to change the view of a seventy-one-year-old, especially when he’s the president of the United States.