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Opinion: US trade hawks threatened by the rise of the Asian dragon
CGTN
2018-07-06
Less than a month ago when the prospects of a full-blown trade war were becoming gloomier, Nobel laureate Paul Krugman was still skeptical that such an escalation could happen.
"What I thought would happen, instead, was a bit of kabuki: America’s major trading partners would make cosmetic concessions – perhaps with some lucrative payoffs to Trump businesses on the side – that would let Trump proclaim a 'win', and trade would go on much as before."
Back in March, Peter Navarro, one of US President Donald Trump's top advisors, declared: "I don’t believe any country will retaliate", on account of that the US has the upper hand since it imports more.
However, as the day Trump’s proposed tariff plans take effect (July 6) has arrived, it seems that a trade war has become a reality.
But the reason why Krugman thought a trade war would not be on is much more realistic than Navaro's. He thought that the power of big money can turn Trump and his "think" tank (if they are still doing that) around.
According to Krugman, trillions of dollars have been invested based on the assumption that "an open world trading system, permitting value-added chains that sprawl across national borders, was going to be a permanent fixture of the environment." And people would think that somehow the message could get through to the White House by corporations powers. But the power of politics seems to have trumped common sense in economics.
An American farmer loads soybeans from his grain bin onto a truck before taking them to a grain elevator in Dwight, Illinois, US on June 13, 2018./VCG Photo
Europe and Canada, even though angered by Trump’s move, seem hesitant about forging a united front against the US on trade. Perhaps they were more confused than angry vis-à-vis the current trade system, which was co-built under the neoliberal philosophy that the Western world has promoted since Reagan and Thatcher in the 1980s.
But as David Harvey, a famous Marxist economist has observed, neoliberal policies, characterized by deregulation and the diminishing role of the state, have not created another golden era for capitalism after the 2008 crisis. The economy has remained stagnated and the wealth that it had created was concentrated in the hands of Wall Street elites and corporate executives, not the majority.
While the world’s attention has been focused on the tit-for-tat exchanges between China and the US, few have noticed that Trump’s domestic economic policies are still in line with that advanced by his predecessors. The favorable signs on the stock market that Trump likes to brag about are perhaps money to the already affluent pockets.
Choosing China as the scapegoat, as the US has already done in the 1980s with Japan, was such a convenient way to legitimize the stark inequality and economic stagnation.
US President Donald Trump speaks with Harley Davidson CEO Matthew Levatich (L) as he greets Harley Davidson executives and union representatives on the South Lawn of the White House in Washington, DC, on February 2 ,2017. /VCG Photo
But the trade deficit could have been solved with further trade deals and negotiations, which China has already offered with sincerity. As for the intellectual property that the US has accused China of stealing, it is such a classic textbook maneuver of "kicking away the ladder": once advanced economies climb higher, they kick away the tool they have used and rule out development opportunities for other countries.
But why is the West so anxious to kick away the ladder? If trade deficit can be resolved without going to war, why does Trump still insist on a trade war? Why do Europe and Canada still hesitate to fight the US?
Perhaps there is more than trade in the mind of Trump and the hawks surrounding him.
When Western capitalism was at its highest peak in the 50s and 60s, China was still going through economic hardship. When the Soviet Union, perceived at the time as the biggest economy of a Western order, collapsed in the 90s, China's economy had just begun to take off. After the bloc collapsed, Francis Fukuyama wrote "The end of history and the last man", which in effect announced the victory of the Western world order. The West looked around and found no one that could compete against it.
The Cold War may have ended, but the entrenched belief constructed from colonial times that only Western democratic countries could achieve development persists. For the US and even Europe's perspective, Asia, Africa, and Latin America are only allowed to live in the history that the former have lived in.
The US's confidence is based on the belief that those developing economies can chase after them, but they could never surpass them. This has been the discourse that they have used for decades as they looked down on developing countries. There is the West, and there is the "rest". Their Eurocentric mindset would not allow a "non-traditional" country by their definition, namely China, to achieve such a great success under the global trade framework they have built.
The trade war that seems inevitable now is far more than trade and even economy. The West was able to "deal with", rule over and control the East through colonialism, but now it is facing a rising Asia that could not be pinned in a familiar system that they used to know so neatly. Trumpism is a stress response to the fall of Eurocentrism.
But no matter whether it's China or India, no one is waiting for them to figure out what has been going on in the world order. China is neither afraid of a trade war, nor scared of America's deception.
https://news.cgtn.com/news/3d3d414e79416a4e78457a6333566d54/share_p.html
@Cybernetics , @Dungeness , @TANAHH , @Kiss_of_the_Dragon , @AndrewJin
CGTN
2018-07-06
Less than a month ago when the prospects of a full-blown trade war were becoming gloomier, Nobel laureate Paul Krugman was still skeptical that such an escalation could happen.
"What I thought would happen, instead, was a bit of kabuki: America’s major trading partners would make cosmetic concessions – perhaps with some lucrative payoffs to Trump businesses on the side – that would let Trump proclaim a 'win', and trade would go on much as before."
Back in March, Peter Navarro, one of US President Donald Trump's top advisors, declared: "I don’t believe any country will retaliate", on account of that the US has the upper hand since it imports more.
However, as the day Trump’s proposed tariff plans take effect (July 6) has arrived, it seems that a trade war has become a reality.
But the reason why Krugman thought a trade war would not be on is much more realistic than Navaro's. He thought that the power of big money can turn Trump and his "think" tank (if they are still doing that) around.
According to Krugman, trillions of dollars have been invested based on the assumption that "an open world trading system, permitting value-added chains that sprawl across national borders, was going to be a permanent fixture of the environment." And people would think that somehow the message could get through to the White House by corporations powers. But the power of politics seems to have trumped common sense in economics.
An American farmer loads soybeans from his grain bin onto a truck before taking them to a grain elevator in Dwight, Illinois, US on June 13, 2018./VCG Photo
Europe and Canada, even though angered by Trump’s move, seem hesitant about forging a united front against the US on trade. Perhaps they were more confused than angry vis-à-vis the current trade system, which was co-built under the neoliberal philosophy that the Western world has promoted since Reagan and Thatcher in the 1980s.
But as David Harvey, a famous Marxist economist has observed, neoliberal policies, characterized by deregulation and the diminishing role of the state, have not created another golden era for capitalism after the 2008 crisis. The economy has remained stagnated and the wealth that it had created was concentrated in the hands of Wall Street elites and corporate executives, not the majority.
While the world’s attention has been focused on the tit-for-tat exchanges between China and the US, few have noticed that Trump’s domestic economic policies are still in line with that advanced by his predecessors. The favorable signs on the stock market that Trump likes to brag about are perhaps money to the already affluent pockets.
Choosing China as the scapegoat, as the US has already done in the 1980s with Japan, was such a convenient way to legitimize the stark inequality and economic stagnation.
US President Donald Trump speaks with Harley Davidson CEO Matthew Levatich (L) as he greets Harley Davidson executives and union representatives on the South Lawn of the White House in Washington, DC, on February 2 ,2017. /VCG Photo
But the trade deficit could have been solved with further trade deals and negotiations, which China has already offered with sincerity. As for the intellectual property that the US has accused China of stealing, it is such a classic textbook maneuver of "kicking away the ladder": once advanced economies climb higher, they kick away the tool they have used and rule out development opportunities for other countries.
But why is the West so anxious to kick away the ladder? If trade deficit can be resolved without going to war, why does Trump still insist on a trade war? Why do Europe and Canada still hesitate to fight the US?
Perhaps there is more than trade in the mind of Trump and the hawks surrounding him.
When Western capitalism was at its highest peak in the 50s and 60s, China was still going through economic hardship. When the Soviet Union, perceived at the time as the biggest economy of a Western order, collapsed in the 90s, China's economy had just begun to take off. After the bloc collapsed, Francis Fukuyama wrote "The end of history and the last man", which in effect announced the victory of the Western world order. The West looked around and found no one that could compete against it.
The Cold War may have ended, but the entrenched belief constructed from colonial times that only Western democratic countries could achieve development persists. For the US and even Europe's perspective, Asia, Africa, and Latin America are only allowed to live in the history that the former have lived in.
The US's confidence is based on the belief that those developing economies can chase after them, but they could never surpass them. This has been the discourse that they have used for decades as they looked down on developing countries. There is the West, and there is the "rest". Their Eurocentric mindset would not allow a "non-traditional" country by their definition, namely China, to achieve such a great success under the global trade framework they have built.
The trade war that seems inevitable now is far more than trade and even economy. The West was able to "deal with", rule over and control the East through colonialism, but now it is facing a rising Asia that could not be pinned in a familiar system that they used to know so neatly. Trumpism is a stress response to the fall of Eurocentrism.
But no matter whether it's China or India, no one is waiting for them to figure out what has been going on in the world order. China is neither afraid of a trade war, nor scared of America's deception.
https://news.cgtn.com/news/3d3d414e79416a4e78457a6333566d54/share_p.html
@Cybernetics , @Dungeness , @TANAHH , @Kiss_of_the_Dragon , @AndrewJin
.
