Why Trump’s Gut Feeling Is Right

It is easy to get enthusiastic about Xi Jinping if the alternative is Donald Trump: The polite Chinese head of state constantly praising free trade, versus the coarse American serving up narrow-minded economic nationalism. The global business elite who listened to the Chinese head of state in Davos last year knew whom to support. It is safe to assume that Trump won’t achieve anything similar on Friday.

Even more so since the U.S. president is about to start a trade war with China, which has the potential to destroy global supply chains and put an end to the global economic boom. So far, it is not clear whether Trump will restrict himself to calculated warnings or whether he will actually carry the conflict too far, for example by placing tariffs on all U.S. imports from China, which he has threatened to do on several occasions. Either way, the global economic climate should get noticeably rougher in the coming years.

The motive for the president’s trade war is outrageous and proves his economic ignorance. To him, the global economy is a zero-sum game, with the surpluses of a country providing proof of cleverness and deficits, such as those of the U.S., proof of disgrace. He does not understand that a country can benefit from trade even if it imports more than it exports.

But in spite of Trump’s narrow-mindedness, his gut feeling is right: China is fooling the world. When Beijing joined the World Trade Organization in 2001, the U.S. and the European Union hoped that this would force the economic transformation of the country. But instead, the abusive and arbitrary behavior of the state increased; foreign companies are forced to cooperate with local ones, and intellectual property theft remains widespread. It has become increasingly evident that the socialist rulers in Beijing would not dream of introducing a Western-style market economy. They engage in state capitalism, which allows foreign companies to invest money and know-how, but forces them to conform otherwise. At the same time and with growing political and military power, the Chinese are aggressively calling for economic concessions which they themselves would never grant other countries.

The President’s Criticism of China Is at Least Partly Justified

It is good that someone addresses these grievances openly, even if that someone is Donald Trump. Maybe the president is the only one capable of doing this because, due to his complete insensitivity to pain, he is one of the few politicians who does not care what the Beijing leaders think of him. If the Europeans want to avoid a trade war that only will produce losers, they should not turn up their noses at Trump, but exercise a moderating influence on him and at the same time provide support. The Chinese have already indicated that they would purchase European goods if America introduces tariffs: Airbus instead of Boeing, so to speak. The EU should not play this game because next time, Beijing could aim its fury at them.

It is easy to despise Trump and his intellectual simplicity, his disdain for minorities and his verbal vulgarity. But his criticism of China is at least partly justified. He will not melt the hearts of the attendees in Davos. But many listeners will secretly nod their heads.

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