US-China – Trump Yet To Bury the Hatchet

In order to impose his “trade deal,” the occupant of the White House is said to be ready to start taxing $200 billion worth of Chinese goods at 25%.*

The threat made by Donald Trump on Sunday to shortly raise the customs duties on $200 billion of Chinese goods imported to the U.S. has further shaken an already somewhat shaky global situation. “For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” tweeted the president, before concluding that the 10% was going to “go up to 25% on Friday.”

Although trade negotiations between China and the U.S. appeared likely to lead to a summit agreement, Trump is once more using his “art of the deal,” developed while at the head of his property empire and which he now uses to manage world affairs. This strategy involves balancing all the superpower’s strengths in order to change Beijing’s position and achieve the objective of extracting important concessions from the Chinese side.

The Chinese Leadership Has Decided To Keep the Door Open for Negotiations

Trump wants to gain further access to the Chinese market for U.S. goods. Above all, under the guise of reestablishing “loyal trade relations,”** he intends to impose structural changes on Beijing. He has criticized their subsidies to domestic companies and accused them of “intellectual property theft,” which would have brought about a huge transfer of U.S. technology to China.

The tone is all the more aggressive given that the United States has not managed to reduce its huge trade deficit with China. This reached around $378.73 billion in 2018 despite the initial protectionist salvos Trump had already deployed. Beijing seems to have chosen to remain calm in the face of the fresh outbreak of pressure. The Chinese leadership has decided to keep the door for negotiations open by continuing to send a delegation to Washington on Wednesday. It is true, however, that they are faced with something of a downturn in their economic activity that could take on a worrying dimension if the trade war with Washington escalates. Then, another Chinese-U.S. altercation revealed the dangers generated by Washington’s desire to play all the power angles, including military, in its efforts to lock Beijing into a trade deal that would be more beneficial for American businesses. Yesterday, U.S. warships passed close to islands claimed by Beijing in the South China Sea, drawing a show of anger and “resolute opposition” from China’s foreign minister.

The reemergence of tension between Beijing and Washington has again caused fears to surface about the health of the global economy. To an increasingly marked downturn affecting emerging economies, some of which, like Argentina and Turkey, are already in recession, we can add confirmation of a sudden halt in growth in Germany and the eurozone. This is causing a chain reaction in the world’s financial centers. Alongside Shanghai, which yesterday fell by nearly 6%, all stock markets, including Paris and Frankfurt, were experiencing further downward trends, as if they were anticipating an imminent severe downturn in the global economy.

*Editor’s note: As of this writing, the tariff increase has taken effect.

**Editor’s note: This quotation, accurately translated, could not be verified.