U.S.-China re­la­tions wors­ens

Tehran Times - - FRONT PAGE - Hanif Ghaf­fari

U.S.-China re­la­tions wors­ened dur­ing Trump’s pres­i­dency. Of course, there were dis­agree­ments be­tween Bei­jing and Wash­ing­ton over both se­cu­rity and cy­ber-crimes dur­ing the pres­i­dency of Barack Obama, but the emer­gence of trade and eco­nomic dis­putes in bi­lat­eral re­la­tions should be an­a­lyzed “be­yond a sim­ple con­tro­versy”.

The U.S. has al­ready ap­plied tar­iffs to $50 bil­lion worth of Chi­nese goods and China has re­tal­i­ated with tar­iffs of its own. An­other in­ten­si­fi­ca­tion of trade ten­sions could de­rail plans for up­com­ing talks and po­ten­tially dam­age the world’s two largest economies if the dis­pute con­tin­ues. Trump promised dur­ing his pres­i­den­tial cam­paign that he would seek to re­duce mas­sive U.S. trade deficits with China. In 2017, the U.S. posted a $376 bil­lion deficit in goods with China. Many of the ex­perts and eco­nomic an­a­lysts in the United States men­tion the pub­li­ca­tion of these fig­ures by the US Depart­ment of Com­merce as the main rea­sons for Trump’s re­cent ver­bal at­tacks against Bei­jing.

Any­way, eco­nomic dis­putes be­tween Bei­jing and the United States have en­tered a new phase.

Reuters re­ported that U.S. Sec­re­tary of State Mike Pom­peo and Chi­nese For­eign Min­is­ter and State Coun­cilor Wang Yi aired their griev­ances in the open on Mon­day dur­ing a brief visit to Bei­jing by Wash­ing­ton’s top diplo­mat, amid wors­en­ing re­la­tions.

The two diplo­mats’ meet­ing at Bei­jing’s Diaoyu­tai State Guest House was un­usu­ally frosty and full of dis­agree­ments which none of the two sides tried to con­ceal.

“Re­cently, as the U.S. side has been con­stantly es­ca­lat­ing trade fric­tion to­ward China, it has also adopted a se­ries of ac­tions on the Tai­wan is­sue that harm China’s rights and in­ter­ests, and has made ground­less crit­i­cism of China’s do­mes­tic and for­eign poli­cies,” Wang said at a joint ap­pear­ance with Pom­peo.

“We be­lieve this has been a di­rect at­tack on our mu­tual trust, and has cast a shadow on China-U.S. re­la­tions,” he added. “We de­mand that the U.S. side stop this kind of mis­taken ac­tion.”

These re­marks were fol­lowed by Pom­peo’s re­ac­tion, who was brief­ing Wang fol­low­ing his visit with North Korean leader Kim Jong Un, “The is­sues that you char­ac­terised, we have a fun­da­men­tal dis­agree­ment. We have great con­cerns about the ac­tions that China has taken…”

The joint press con­fer­ence be­tween Chi­nese and Amer­i­can of­fi­cials ended while the two sides couldn’t come up with a so­lu­tion for re­duc­ing dis­agree­ments. On the other hand, Pom­peo’s em­pha­sis on “fun­da­men­tal dis­agree­ment” with Bei­jing on eco­nomic and se­cu­rity is­sues once again sug­gests that the Trump govern­ment has no in­ten­tion for re­vis­ing its anti-China poli­cies in the in­ter­na­tional sys­tem. At the be­gin­ning of 2017, when Trump was ap­pointed at the head of the po­lit­i­cal and ad­min­is­tra­tive equa­tions of the United States, some Amer­i­can strate­gists, in­clud­ing Henry Kissinger, sug­gested him that he needs to “re­strain China” as a high­lighted for­eign pol­icy. This was ex­actly what Trump did since he en­tered the White House.

How­ever, many Amer­i­can eco­nomic an­a­lysts be­lieve that Trump’s im­ple­men­ta­tion of pro­tec­tion­ist poli­cies against Bei­jing will have no good re­sults for Wash­ing­ton (es­pe­cially in the long run), and be­sides, those pro­tec­tion­ist poli­cies lead to the es­tab­lish­ment of eco­nomic ties be­tween China and other in­ter­na­tional play­ers in­clud­ing Rus­sia and the Eu­ro­pean Union. Un­doubt­edly, the di­rect con­se­quence of es­tab­lish­ing these eco­nomic ties would be the iso­la­tion of Wash­ing­ton in the in­ter­na­tional sys­tem.

On the other hand, the Chi­nese au­thor­i­ties have an­nounced that they will re­tal­i­ate the U.S. pres­i­dent’s pro­tec­tion­ist poli­cies and his ir­re­spon­si­ble in­ter­ven­tion in in­ter­na­tional trade. This has led many Amer­i­can com­pa­nies to crit­i­cize Trump’s anti-China poli­cies in the field of in­ter­na­tional eco­nom­ics and to an­a­lyze it as a de­ter­rent pol­icy.

More im­por­tantly, in ad­di­tion to the eco­nomic ten­sions (which are ris­ing ex­po­nen­tially), the United States is at­tempt­ing to limit China in East Asia by im­pos­ing spe­cific poli­cies to­wards Tai­wan and North Korea, an is­sue that Bei­jing will def­i­nitely re­act to with a de­ter­mined re­sponse.

In such a sit­u­a­tion, Trump will try to re­duce the U.S. trade deficit, and the con­se­quence of its short-term per­for­mance will be a rise in China’s trade deficit, as China’s ex­ports will be re­duced. How­ever, in the long run, Trump’s eco­nomic pro­tec­tion­ism can also blow the do­mes­tic econ­omy of the United States. In this case, we’ll see con­stant and ex­ten­sive in­flam­ma­tion in the field of do­mes­tic and in­ter­na­tional eco­nom­ics in the United States. Be­yond that, there is an­other con­sid­er­a­tion re­gard­ing the eco­nomic re­la­tions be­tween the United States and China, which Don­ald Trump com­pletely ne­glected:

Ac­cord­ing to ev­i­dences in the field of In­ter­na­tional Trade and Eco­nom­ics, the Chi­nese have owned about $ 1 tril­lion of U.S. for­eign debt. China has also been the largest pur­chaser of U.S. Trea­sury auc­tions over the past few years, and it is not un­likely that peo­ple like Hil­lary Clin­ton- the Demo­crat can­di­date in the 2016 pres­i­den­tial elec­tion­have warned against trade war with China. Many Amer­i­can econ­o­mists re­fer to China as “Amer­ica’s banker.” In such a sit­u­a­tion, the U.S. full-fledged eco­nomic op­po­si­tion with Bei­jing can be in­ter­preted as a com­mer­cial and eco­nomic sui­cide.

Fi­nally, China and the United States are both likely to use meth­ods in this eco­nomic con­flict, which con­tra­dicts their eco­nomic red lines in re­cent years. In such a sit­u­a­tion, we’ll wit­ness lots of ups and downs in the eco­nomic and com­mer­cial struc­ture of the two coun­tries. Even­tu­ally, the con­tro­versy be­tween the two play­ers won’t be lim­ited to Wash­ing­ton and Bei­jing, and their busi­ness part­ners will, will­ingly or un­will­ingly, en­ter their war.

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