Trade war: Trump raises the stakes
It was a “pretty spectacular” gesture, even by “the 45th presidency’s standards”, said Freddy Gray in The Spectator. As he prepared to fly out to last weekend’s G7 summit, Donald Trump ramped up the tension in his ongoing trade war with China, tweeting that President Xi was an “enemy” of America; he also “ordered” US companies to stop making products in China and bring their operations “HOME”. Trump was reacting to the latest escalation in the stand-off between the world’s two biggest economies, said Louis Ashworth in The Daily Telegraph. Responding to China’s earlier announcement that it would apply new tariffs (of 5%-10%) on $75bn worth of imports from the US, he said he would, in turn, increase US tariffs on almost all Chinese goods by about 5%. “Our economy, because of our gains in the last 2 1/2 years, is MUCH larger than that of China,” he added. “We will keep it that way!”
Trump’s “outlandish threats” are counterproductive, said Josh Rogin in The Washington Post – “but his basic thrust is on point”. Either “by persuasion or pressure”, China should be forced to play by “international rules”, and to curb its “predatory economic policies”. If it wants to trade with the rest of the world, it must open up its markets to foreign companies and protect their intellectual property. It’s imperative that the Western world should come together and confront both China’s “external economic aggression” and its “rising internal repression”. That’s why the timing of the president’s outburst – as he joined G7 leaders in Biarritz – was so important: his chances of success would rise dramatically if his European allies were on board. Although defending the free market and democracy will come at a cost – which his allies may be reluctant to pay – China’s aggression is “exactly the kind of generational challenge the G7 was designed to confront”.
The trouble is that Trump’s strategy is “failing”, said Jason Furman in The Wall Street Journal. After 18 months, his tougher approach has yielded “no meaningful concessions” from China – but it is “increasingly damaging the US economy”. In the short term, it is likely to impact GDP growth this year, while in the long term, it is putting a brake on Chinese investments in the US economy that may prove still more consequential. But even those effects will be the least of our worries if China slumps as a result, said Zachary Karabell on Politico. A sagging Chinese economy would impact not only the US, but the whole of Europe and Asia too. The result would “likely be a global recession”. As Trump raises the stakes on China, it could be the whole world that feels the pain.