Once Donald Trump took office as president of the United States he made sure everyone knew he would put “America First” and “Make America Great Again.” At the moment, he is doing this by adopting different policies, including a trade war with China.
While Trump has claimed time and again that things are looking good for the US, more and more people are opposing his antics. Even some of his formerly hardline supporters are beginning to wonder if it was a mistake to vote him into power.
When Trump first started the trade war against China, his popularity rose, as he played the good old “China threat theory” card. Old capitalist countries have a deep fear of China, which explains the European Union and the United States issuing a joint statement in July 2018 stating they would “work to reform the World Trade Organization and crack down on unfair trading practices.” All of that points toward China, with some speculating whether the United States would be accompanied by Europe in its quest to take down China.
But the reality is, no one is safe from the threat of a trade war, even if you are a close ally of the US. For instance, the trade agreement signed by the US, Canada and Mexico last November is much more demanding than the North American Free Trade Agreement it replaced. It directly stipulates the conditions of bilateral deals that may be done between China and the two other countries in the agreement. In short, the new United States-Mexico-Canada Agreement is no longer about trade, but about political context.
When their pressure on their two North American neighbors proved to be effective, the Americans began applying this method to the whole world, including Europe, Japan, South Korea and India. Allies were pressured into making concessions for the United States. In addition, the Trump administration demanded that they increase their defense budgets to alleviate the pressure on America’s own spending, despite the economic downturns in Europe.
The Europeans have now realized that they were not just the audience but potential contestants in the Sino-US trade war after facing threats of tariffs and blockades. A careless response could land them in Trump’s crosshairs.
This year, Europe has changed its attitude toward the trade war. It has turned away from blanket support of the US toward neutral positions or even opposition to US protectionist policies. Some countries in Europe began switching to 5G (fifth-generation telecom) equipment from Chinese companies – to the resentment of the US. China since then has garnered a bit of support from Europe, as the US would certainly not pay a dime for the time and cost borne by Europe of replacing communication equipment.
As Chinese high-tech companies such as Huawei own a large number of patents, even if European firms do not choose products from Chinese firms, they may not be able to bypass Chinese companies altogether. Huawei recently demanded that American telecom giant Verizon pay royalties for using Huawei equipment – a message that no one can bypass Huawei in the communications field.
Of the United States’ Asian allies, Japan has been very subtle. While the Japanese do not dare publicly object to US policies as Europe has, they have been seen to be reluctant to join the trade war as well. Being a country geographically close to China, the economic and cultural exchanges Japan shares with China are quite significant. To offend China on the Americans’ behalf is to risk 20% of Japan’s foreign trade.
As for China, its allies include Russia, Pakistan and numerous African countries. In 2014, Huawei signed a deal with Russia that will provide a GSM-R (Global System for Mobile Communications – Railway) system for a railway in Sochi. Later on, Huawei took on a number of other projects for Russia as well. One of these is an agreement to create a multimedia platform with Russia’s lead mobile operator MTS with 4.5G and 5G technologies.
Two years have passed and Trump’s economic maneuvers have borne little fruit. In fact, they have been shunned by some US companies as well. American farmers are now dealing with unsalable agricultural products and countries in the world are growing less and less tolerant of Trump’s aggressive antics.
With almost the whole world watching in angst, maybe Trump’s policies are the problem after all.
This article was first published on ATimesCN.com and was translated by Kamaran Malik.