As Donald Trump dusts off his knuckle duster before confronting Xi Jinping at the G20 in Buenos Aires, it’s hard not to picture a “Godzilla” movie.
The China-US trade brawl is the economic equivalent of giant monsters clashing and laying waste to entire cities – or nations. Asian neighbors find themselves cast in the role of unwitting bystanders, praying they don’t get trampled on as the presidents of China and the US lock talons and turn on the death rays.
All other Group of 20 leaders assembled in the Argentine capital can do is hope for a happy ending. The most satisfying conclusion would be a ceasefire in the tariff arms race Trump launched earlier this year. The first shots came in the form of levies on steel (25%) and aluminum (10%). Then came 25% taxes on US$250 billion of Chinese goods, followed by Beijing’s own tit-for-tat tariffs.
Escalation likelier than ceasefire
What comes next is anyone’s guess: Trump doubling the amount of Chinese goods he’s targeting; 25% taxes on cars and auto parts; 10% levies on iPhones; China threating to dump its $1.2 trillion of US Treasury debt; any number of yet-to-be-floated non-tariff barriers. Hence the importance of Trump and Xi making the most of their dinner date and agreeing to a truce.
Sadly, the odds of such an outcome aren’t great. In the days before the Xi summit, Trump signaled he’s still keen to tax every good China sends to America. Hold your breath now: That amounts to products worth $505 billion – the amount China shipped to the US in 2017.
The no-quarter trade war laying waste to Asian supply chains is, for better or worse, in Trump’s DNA.
In the 1980s, when the real estate mogul built his brand, Japan was the ravenous monster consuming American jobs. Today, Xi’s China is cast as Trump’s villain. If we know anything about this mercurial US president it’s that he needs a foe – a foil on which to blame his every challenge. Xi’s China is that and more.
Trump’s Vice-President Mike Pence also made clear in recent speeches that tackling China was a key pillar of the administration’s 2020 re-election campaign. Xi, in the meantime, can hardly afford to be seen kowtowing to a US leader who attacks Beijing on Twitter on a semi-daily basis.
So, even if we see a diplomatic tango in Argentina and the specter of détente, it’s unlikely to hold once Trump returns to his scandal-plagued lair in Washington.
If – a massive “if” – Trump and Xi want to cheer investors, they will agree to begin bilateral trade negotiations. Even better: They could both swallow some pride and join the Tokyo-sponsored Trans-Pacific Partnership.
Again, though, all that matters is what Trump and Xi do in the weeks and months after Buenos Aires.
American bully vs Asian bully
The best-case scenario may be a vague joint statement agreeing to talk more. Yet there’s likely to be little comfort here for Japan or South Korea, the two most obvious examples of collateral damage as the world’s two economic giants collide.
Even so, color Japan’s Shinzo Abe and Korea’s Moon Jae-in fascinated by the spectacle. With exports and asset markets in Asia’s No 2 and No 4 economies taking hits, Prime Minister Abe and President Moon are bracing for the worst. The supply chains on which their economies rely are increasingly in harm’s way.
Ambivalence reigns, though. Secretly, both Abe and Moon are keen to see Trump get into the ring with Xi’s government – the American bully taking on the Asia bully. One of Trump’s top goals is scuttling Xi’s “Made in China 2025” program, one promising to lavish trillions of dollars on high-tech industries that employ tens of millions of Japanese and Koreans.
A recent New York Times cartoon perfectly captures the monster-versus-monster dynamic in Buenos Aires. It depicts Trump and Xi standing atop the globe – Trump wearing a “US Bully” sweatshirt, Xi donning a “Chinese Bully” one. They’re staring down at much smaller human forms representing neighboring Asians confronted with the caption: “Pick a side!”
Trump is right on one thing, though: China is an unfair trader.
It runs circles around World Trade Organization norms, steals technology, flouts intellectual property rights, aggressively subsidizes state enterprises and runs roughshod over the South China Sea.
Its “One Belt, One Road” initiative can seem, in the words of Malaysian Prime Minister Mahathir Mohamad, like a “new version of colonialism.” Trump’s disillusionment with China is shared by many Americans, Japanese and Koreans.
The problem is Trump’s remedy. Browbeating a proud nationalist on the path to rule long after Trump returns to reality television won’t work. Yet Xi also is miscalculating if he thinks Trump will give in.
The only way out is a face-saving deal that both Trump and Xi can spin in their favor. One is surely possible in Buenos Aires – but it is not likely.
Among the many hurdles is a sliding Chinese yuan, which is down nearly 7% versus the dollar this year. Might Trump read that as a provocation and up the ante?
This week’s giant lay-offs at General Motors, a blow to Trump’s pledge to make American manufacturing great again, is another wildcard. So far, Trump has blamed Federal Reserve rate hikes for the GM challenges that his tariffs helped create.
It won’t take long for Trump to lash out at Asia, his favorite boogeyman. That should have Tokyo and Seoul fearing the next round of hate tweets from @realdonaldtrump.
Abe, Moon cower in shadows
All this leaves Abe and Moon in precarious positions. Abe has positioned himself as Trump’s best pal among world leaders. In return, Abe has received mostly grief as the trade war scuttles his six-year effort to reflate the economy.
The 1.2% growth contraction in the third quarter – and data on exports and production since – augurs poorly for the year ahead.
Moon’s own gamble on Trump is going awry, too. Though never as sycophantic as Abe, Moon wagered that Trump’s bluster could help him achieve peace with North Korea. Yet Moon’s good cop to Trump’s bad hasn’t seemed to slow Pyongyang’s nuclear program.
Moon may have assumed, too, that prioritizing North Korea over economic retooling would serve his legacy well, but as the economy slows, that bet may prove to be a loser.
Whatever the outcome of his China battle, Trump’s efforts to re-industrialize the US are an intensifying risk for Korea and Japan.
That leaves Abe and Moon with an unappetizing choice between two mercantilist giants with whom they harbor trust issues. Complicating the choice: No one can say how long Trump will be around – either two or four more years.
Xi looks set to be in place for far longer: Earlier this year, the Communist Party effectively named him president for life.
One thing that is not on the cards is any kind of joint strategy: Tokyo and Seoul are – yet again – at each others’ throats over historical issues. So expect lots of geopolitical contortions in Buenos Aires as Tokyo and Seoul mull how to pull off a balancing act for the ages – and to avoid getting trampled by the feet of the battling monsters.
This article is all over the map. Japan and South Korea are first both "fascinated by the spectecle" but then are at "each other throats". And no way is China ever going to be allowed to join the TPP (now called the CPTPP) whose original purpose was to box China out. At this point the US will not be allowed in due to the language of the final agreement.
Let the battle begin as the US is delusional and no, China is not an "unfair trader". What nonesense. It is the US which has stalled all new appointments to the WTO so disagrements can not be arbitrated or decided upon.
As for forced technology transfer, the US has done that for years. For Japan to sell automobiles to the US market they not only were forced to setup assembly plants in the US but were made to transfer technology to the US auto industry. It was Japanese technology that was forced from them that allowed Ford/Chevy to build 4WD systems that could be engaged at speed and not have to stop, and get out to turn in the hubs.
The US simply doesn’t like the fact it is being beaten in the world’s marketplace and will soon be in second place, and is willing to destroy everything to prevent it from happening.
This article is all over the map. Japan and South Korea are first both "fascinated by the spectecle" but then are at "each other throats". And no way is China ever going to be allowed to join the TPP (now called the CPTPP) whose original purpose was to box China out. At this point the US will not be allowed in due to the language of the final agreement.
Let the battle begin as the US is delusional and no, China is not an "unfair trader". What nonesense. It is the US which has stalled all new appointments to the WTO so disagrements can not be arbitrated or decided upon.
As for forced technology transfer, the US has done that for years. For Japan to sell automobiles to the US market they not only were forced to setup assembly plants in the US but were made to transfer technology to the US auto industry. It was Japanese technology that was forced from them that allowed Ford/Chevy to build 4WD systems that could be engaged at speed and not have to stop, and get out to turn in the hubs.
The US simply doesn’t like the fact it is being beaten in the world’s marketplace and will soon be in second place, and is willing to destroy everything to prevent it from happening.
Godzilla is Jap. No need to read further trash. My friends do look for the orange orangutan to bet Xi for relief deal. The best possible move for China and world’s future is not budge and cut dollar hegemony once and for all.
Godzilla is Jap. No need to read further trash. My friends do look for the orange orangutan to bet Xi for relief deal. The best possible move for China and world’s future is not budge and cut dollar hegemony once and for all.
Good comment. Keep the laughs coming. hahahaha
Good comment. Keep the laughs coming. hahahaha
A fvking trump believer here hahahaha. Let me guess high school graduate, dream goal in life how to become more white and be accepted. hahahaha… U can start raking the forest floor. heheheheh
A fvking trump believer here hahahaha. Let me guess high school graduate, dream goal in life how to become more white and be accepted. hahahaha… U can start raking the forest floor. heheheheh
"It runs circles around World Trade Organization norms, steals technology, flouts intellectual property rights, aggressively subsidizes state enterprises and runs roughshod over the South China Sea."
Are you not descriping to a tee, American hadgemony over the past 100 years? Look at Latin America, Asia, Europe all victims of American military and economic aggression. Yet not a peep from this author. Yet you condem China.
"
"It runs circles around World Trade Organization norms, steals technology, flouts intellectual property rights, aggressively subsidizes state enterprises and runs roughshod over the South China Sea."
Are you not descriping to a tee, American hadgemony over the past 100 years? Look at Latin America, Asia, Europe all victims of American military and economic aggression. Yet not a peep from this author. Yet you condem China.
"
Well put. Par for the course in Western "journalism" Speaking of Mahathir, he said the US should keep its warships out of ASEAN waters. You don’t see THAT being trumpeted around the Western media, do you.
https://www.straitstimes.com/asia/se-asia/mahathir-tells-us-no-warships-in-asean-waters-but-small-patrol-boats-are-fine
Well put. Par for the course in Western "journalism" Speaking of Mahathir, he said the US should keep its warships out of ASEAN waters. You don’t see THAT being trumpeted around the Western media, do you.
https://www.straitstimes.com/asia/se-asia/mahathir-tells-us-no-warships-in-asean-waters-but-small-patrol-boats-are-fine
The world must get free from the US influence, meddling and warmongering. And the sooner the better.
The world must get free from the US influence, meddling and warmongering. And the sooner the better.
The author says in this article:
[quote] Its “One Belt, One Road” initiative can seem, in the words of Malaysian Prime Minister Mahathir Mohamad, like a “new version of colonialism.” [unquote]
Now, if you just read the words above without following the link, the author wants you to get the impression that China’s OBOR is a "new version of colonialism".
If you follow the link, this is what the headline said to start with:
IS CHINA’S BELT AND ROAD COLONIALISM? MAHATHIR: NOT AT ALL
In the article, there are several interpretations to slant Mahathir’s words towards Western/US narratives, like:
"Some Western geopolitics watchers had SUGGESTED [emphasis added] Mahathir’s comments…were an expression of his new government’s unease over China’s rising economic and strategic dominance in Asia…"
The again:
"Video clips of the comment went viral after several news outlets USED IT TO SUGGEST [emphasis added] Mahathir was leading a resistance against China amid rising suspicion that its “Belt and Road Initiative” to open trade with Eurasian countries was a type of debt-trap diplomacy.
In the interview in London with the BBC’s Zeinab Badawi, the Malaysian leader said this was an INACCURATE PORTRAYAL OF HIS COMMENTS [emphasis added]."
So is this article credible, given the author twisted sentences and put words in Mr Mahathir’s mouth to suit his bias?
The author says in this article:
[quote] Its “One Belt, One Road” initiative can seem, in the words of Malaysian Prime Minister Mahathir Mohamad, like a “new version of colonialism.” [unquote]
Now, if you just read the words above without following the link, the author wants you to get the impression that China’s OBOR is a "new version of colonialism".
If you follow the link, this is what the headline said to start with:
IS CHINA’S BELT AND ROAD COLONIALISM? MAHATHIR: NOT AT ALL
In the article, there are several interpretations to slant Mahathir’s words towards Western/US narratives, like:
"Some Western geopolitics watchers had SUGGESTED [emphasis added] Mahathir’s comments…were an expression of his new government’s unease over China’s rising economic and strategic dominance in Asia…"
The again:
"Video clips of the comment went viral after several news outlets USED IT TO SUGGEST [emphasis added] Mahathir was leading a resistance against China amid rising suspicion that its “Belt and Road Initiative” to open trade with Eurasian countries was a type of debt-trap diplomacy.
In the interview in London with the BBC’s Zeinab Badawi, the Malaysian leader said this was an INACCURATE PORTRAYAL OF HIS COMMENTS [emphasis added]."
So is this article credible, given the author twisted sentences and put words in Mr Mahathir’s mouth to suit his bias?
Genius Trump’s is doing the right thing, that is, re-arranging the supply chains that mainly benefits China. Once it’s establish, that will place China on its rightful place, not an arrogant one but just another ordinary nation.
Genius Trump’s is doing the right thing, that is, re-arranging the supply chains that mainly benefits China. Once it’s establish, that will place China on its rightful place, not an arrogant one but just another ordinary nation.
You only pick on China. Remember it takes two to tango. Lay out the US faults too. By the way you love to harmer China on OBOR . Try harder. Even NYT now publishes positively about this project. There is too much Guess works in you article.
You only pick on China. Remember it takes two to tango. Lay out the US faults too. By the way you love to harmer China on OBOR . Try harder. Even NYT now publishes positively about this project. There is too much Guess works in you article.