Donald Trump Showing Weakness In Trade Talks With China

May 15, 2019

 

Xi Jinping is cognizant that China does not possess a dominant view in the national decision policies of the US unless it’s made in America. Therefore the real position of Xi Jinping is not to change the governing laws of their trade practices, but to maintain their long-term plan with their trading partners in building upon their One Belt One Road initiative. What the United States wants from China is transparency laws, a topic Trump’s trade czar seems troubled in understanding.

 

         China has a one-party rule that will never give up their military plan doctrine or stop the prioritization of their country’s weapons system development. China can make some concessions through the United States, however for a rising nation, systematically changing their norms and laws is simply a troubling feat. What the US is asking them is to admit to intellectual property theft which they can then use as leverage in future negotiations in crowding out China in international forums. The US also wants China to admit they are currency manipulators. Even worse, the United States wants to restrict the export of rare earth metals that design sensitive technology systems.

 

         China believes in the old Confucius saying of, “When it is obvious that the goals cannot be reached, don’t adjust the goals, adjust the action steps.” The noblest action that China could ever take is toward their people. Perhaps imitation is the easiest way to promote economic development in the world. Innovation and experience though are a better suite of vengeance when you rise as a nation. As of last November, 950,000 foreign funded companies registered in China and brought in more than $2 trillion into the country. Foreign investment has therefore acted as a catalyst in driving China’s growth to unprecedented levels. Technologically-intensive foreign investments will play a long-term and vital propelling role in China’s economic and social growth, and as the biggest developing country in the world China is well aware of this.

 

“The US no longer possesses clear military-technical dominance, and China is rapidly emerging as a would-be superpower in science and technology,” mentioned Elsa B. Kania, an adjunct worker at the Center for a New American Security, a DC-based think tank.

 

China broke the US monopoly in producing stealth technology, particularly stealth fighters. This is how a country rises; China simply can’t be contained and has been tremendously resilient amidst global tensions. The resilience of the Chinese economy lies within strong fundamentals. A plethora of human resources and strong base of materials present an opportunity for huge development. The country’s ability to synchronize the development of new informatization, urbanization, industrialization, and agricultural modernization is significant considering its large market. This increased coordination of development has shifted China from a nation highly dependent on exports to a nation heavily driven by domestic demand.

 

Xi Jinping has to come to terms with the fact that Donald Trump is a yo-yo. He fluctuates up-and-down with his Twitter and often forgets what he has said the following day. The likelihood of Donald Trump increasing tariffs from 10% to 25% now stands at nearly 90% five hours away from the deadline. After that, China will be hard-pressed in negotiating to remove those tariffs. One only has to look at Canada and Mexico where Trump has maintained his original tariffs in place even with the announcement of a multilateral trade deal. If Trump continues to threaten China with another $300 billion of goods he wants to place tariffs on, then China as a rising nation will only have the option of fighting back by slapping tariffs on US imports. The money that Trump gets from the tariffs will be used to subsidize the American farmers that ultimately lost money because of his tariffs.

 

Sure, China is going to take an economic hit with the tariffs. However, their long-term goals will still be solidly intact. China understands that when push turns to shove, they can not lose face among their own people and instead must look at this as an opportunity to display power through resiliency in the national character of the Chinese people.

Trump is worried about a lot of things. He’s worried about the stock market, his Fed chairman Jerome Powell “The Put”, he’s worried about getting re-elected, American farmers, and of course his Twitter following. The way I see it, it is a game of ambition, and perhaps the best story I can give you is that we have to back to Greek antiquity.

 

Philip II of Macedon was perhaps the greatest leader in ancient Greece because of his son’s orientation. He assumed that his son was weak, frail, and lacked ambition. Philip was drinking heavily and got into a rift with his useless son. His young son kicked him and Philip proceeded to take out his sword to kill his son. Unfortunately, Philip stumbled and his son told him, “How can you conquer the world when you continue to stumble?” This moment showed Philip his son’s ambition. That’s when his son devised a plot to get rid of him. His son was more ambitious than he was and realized he could no longer contain him. When Philip was killed by his son's friends, Alexander took the reign and never looked back. Alexander managed to create and develop hundreds of cities by the name of Alexandria.

 

Trump stated that he and Xi Jinping have an excellent "alternative" in place after receiving a letter from Xi Jinping. "He just wrote me a beautiful letter, I just received it, and I'll probably speak to him by phone," Trump told reporters just 12 hours before new tariffs on $200 billion worth of Chinese goods are set to go into place. "We have two great alternatives, we'll see," he explained before adding "but our alternative is an excellent one." Why doesn't Trump make the letter public? I'm sure the Chinese people would love to read it, especially after Xi demoted his chief trade officer to a "negotiator" title.

 

Eventually a rising country has to show their stubbornness, their ambition, and their will to fight through adversity. Donald Trump is weak and even though he currently has a good relationship with Xi Jinping, Xi has the upper-hand in terms of negotiating. Donald Trump calls Xi a "king". It's time for Xi Jinping to live up to that historical reputation.

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