By: Obbana Rajah
The recent trade tensions between Washington and Beijing have been escalating while the rest of the world looked-on with worry. The financial markets have been jittery and analysts are concerned about the outcome of Trump’s posturing with China.
Donald Trump did not mince his words when he made his stump speech that he was going to penalize China for what he calls, intellectual theft and IP infringement. His administration has imposed tariffs on steel and aluminium imports, along with solar panels, which has triggered a fresh rounds of counter-reactions from Xi Jinping.
Xi is not going to take it lying down. With power consolidated in his hands, Beijing has retaliated with additional tariffs on 128 U.S. products, which include fruit and pork. It also unveiled a list of 106 U.S. goods targeted for tariffs.
U.S. President Donald Trump then threatened to slap tariffs on an additional $100 billion of Chinese goods. This would include 1300 Chinese industrial, technology, transport and medical products.
With all of this going on, Trump announced on his Twitter on Sunday 8th of April,
President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!
— Donald J. Trump (@realDonaldTrump) April 8, 2018
Friendships aside, the two men mean business and they are not going lose face in the international arena.
To compound the issue, there were mixed messages from the Treasury Secretary Steven Mnuchin and the new White House economic adviser, Larry Kudlow, as reported on CNBC. Treasury Secretary Steven Mnuchin said that he was “cautiously optimistic” about reaching an agreement with China, but also cautioned of “the potential of a trade war. Furthermore, economic adviser Larry Kudlow, has said that “China is the problem. Blame China, not Trump.”
There seem to be attempts by the U.S. to ease tensions worldwide as well as to prevent any sort of global backlash. These could be in response to the China Chamber of International Commerce’s statement on Friday saying, “The US has severely disturbed the normal order in global trade and caused immeasurable losses to both countries’ industrial and business sectors”.
Netizens are extremely sceptical of Trump’s truce and question his motives for his tit-for-tat behaviour on tariffs and then for his seemingly amiable Tweet.
However, whether actual domestic or cross-border business investment in particular sectors slow down as a result of rising trade tensions is yet to be seen.
Is Trump playing to his gallery or is there a method to his madness? The American conservatives think that he is the right man for this job.