Trump must keep economy in mind when standing up to China
If I were to write that President Donald Trump is “clueless and has no substantive understanding of rulership and governance, despite his undeniable talent for playing power politics,” I would get a lot of justifiable hate mail, and that’s about it.
After Tsinghua University professor Xu Zhangrun published those words condemning Chinese President Xi Jinping’s handling of the COVID-19 pandemic, the government placed him under house arrest.
When the Australian government began considering an international investigation into the new coronavirus’ origins, the Chinese government slashed beef imports and threatened to impose steep agricultural tariffs.
After Missouri’s attorney general sued China for the outbreak, the Chinese government said it would impose punishing sanctions on the United States, too.
The Chinese Communist Party’s oppression of human rights and bullying of foreign nations
threatens all of our freedoms. The U.S. is the only nation capable of standing up to Xi’s authoritarianism.
Amid the coronavirus recession, though, what may matter most to the global economic recovery is not from where COVID-19 came, but whether China will buy American oil, natural gas and soybeans. A trade war could do more long-term harm than the disease.
President Donald Trump and Secretary of State Mike Pompeo have suggested, without evidence, that the new coronavirus transitioned from bats to humans because scientists in a Wuhan lab messed up.
Most scientists agree the virus that causes COVID-19 evolved naturally; splices show up in DNA like the clicks on poorly edited audio. But we will probably never know whether the virus leaked from the virology lab. Neither does it really matter.
The origins of the virus will mean little once scientists develop a vaccine, doctors perfect a therapy, or the bug burns through the population. What will matter most is the global economy.
For decades, globalization has raised the living standards of earthlings to new heights and spread technology worldwide. Higher wages in poor countries and cheaper goods in the rich have boosted everyone’s well-being.
Trump, Xi and COVID-19 have economists wondering if globalization has peaked.
Trump’s global war on trade had business leaders wondering about peak globalization at January’s World Economic Forum in Davos, Switzerland. If a company cannot rely on stable trading relationships, they cannot rely on foreign suppliers.
Such corporate anxieties suit Trump, who made creating U.S. jobs his top priority. He does not want companies seeking efficiency overseas, even if manufacturing in the United States is more expensive.
Trump’s tariffs have raised prices and injected $72 billion from American taxpayers — who ultimately pay the tariffs in the form of higher prices — into the U.S. Treasury. That makes the tariffs the biggest tax increase since 1993, according to CNBC. Bloomberg reports the tariffs have wiped out most of the savings from the 2017 tax cuts.
Ironically, Xi’s attempts to make the world safe for communism, and therefore more pliant to China’s bullying, are dividing the world between pro-U.S. and proChina camps. Airlines and the NBA may be willing to bend to China’s demands, but most democracies are not, leading to less trade.
The COVID-19 pandemic has revealed the risk of relying too much on foreign manufacturing. Shortages and hoarding of personal protective equipment, medical supplies and critical pharmaceuticals have proven the inadequacy of just-intime supply chains. Try getting an N-95 mask in Eastern Congo.
Politics are at the heart of the problem. Business people in China, the United States, and other countries want mutually beneficial trade. Most of us want a coordinated, global effort to fight the pandemic. But every international crisis is an opportunity for jingoism.
Xi’s officials are trying to shift blame for the pandemic and embarrass other countries for their high death tolls. Trump is trying to shift blame for his government’s bungled response to the Chinese Communist Party’s sloppy virus containment.
Assigning blame is vital to nationalists, but jobs are what matter to the rest of us. Few can afford to pay higher prices for Chinese goods when there are no U.S. substitutes. We need China to buy more products from the U.S., and the world needs the two largest economies to cooperate.
Sadly, Trump and Xi are taking us into a new Cold War. China is not keeping Xi’s promise to buy an additional $200 billion of U.S. products. Trump is pondering more tariffs as “the ultimate punishment” for COVID-19.
Our health and political crises require deft diplomacy and international cooperation. We need to demand better behavior from China without sacrificing the economy. The U.S. needs to lead, not with its back to the wall, but with most of the world standing behind us.