Monday, June 3, 2019

Donald Trump is Clearly the Bully

The US-China trade war doesn't look like it's going to end anytime soon. if anything, it is getting from bad to worse.

I'm betting Donald Trump is not going to stop ramping up threats against China – even as the latter tries hard not to succumb to the inclination to return fire. 

China already says it is ready to continue trade talks. 

Vice Commerce Minister Wang Shouwen, who led the working-level team in the trade negotiations had said China is willing to work with the US to find solutions, but the latter’s strategy of maximum pressure and escalation can’t force concessions from China. He griped that when you give the US an inch, it takes a yard. 

Wang categorically denied US claims that China backtracked on already agreed portions of the deal – and instead accused the US of backtracking repeatedly since 2018. 

"Nothing is agreed until everything is agreed", he had asserted. 

Of course, aren’t this what negotiations are all about? 

China issued a White Paper on Sunday, reiterating that China doesn’t want a trade war with the US but won’t shy away from one – and re-asserting China’s right to development and sovereignty. 

China has repeatedly expressed unhappiness that the US used "intimidation and coercion" and "persisted with exorbitant demands, maintained the additional tariffs imposed since the friction began, and insisted on including mandatory requirements concerning China’s sovereign affairs in the deal. 

I certainly concur that the US should bear full responsibility for the collapse of trade talks because Trump (right) isn’t really interested to break the impasse. He cannot accept that these discussions need to be based on sincerity, mutual respect and equality. 

Except for Trump and his cast of hawks, the rest of us all know that the trade war has not ‘made America great again’. 

Accompanying that barb were points American economists make: Tariffs raise costs for US producers and prices for consumers and hurt economic growth. They disrupt supply chains and the world economy, which in turn hurts the US economy. 

Polls are already showing Trump’s tariffs are unpopular in the US, something Chinese officials have noted. The latest evidence came from Monmouth University last week, which found just 25% of Americans think tariffs imposed by Trump are good for the US economy while 62% believe US consumers bear the cost of import taxes rather than China, as Trump argues. 

A Chinese foreign ministry spokesperson Yu Dunhai even confessed on Friday that Trump treats China with contempt. "If we can treat each other equally and with respect then we can come back to the table”, Yu had conceded. 

That shows the US is not interested in hammering a deal that reflects a win-win outcome for both countries. That also shows that Trump’s eyeing a win-lose endgame at China’s expense. Trump is nothing more than an offensive and obnoxious bully. 

Morgan Stanley are already warning that if the trade war gets any worse, recession will be knocking at our doors within a year.

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