In a global display of bravado and testosterone, U.S. Pres. Donald J. Trump and China’s Pres. Xi Jingping have become embroiled in fiery trade war that looks more like a WWE taunting match than international diplomacy. Add Mexico, the EU and others into the mix, and tariff-slinging world leaders have left international businesses aghast.
Despite the stunning breadth of the tariffs and billions of dollars of impact it will have on world trade, few are surprised that Pres. Trump has once again made good on a campaign promise to go toe-to-toe over unfair trade deals and practices.
Unfair Trade And Chinese Theft
Pres. Trump rolled out nearly two years of fierce rhetoric that he wouldn’t stand for the massive trade deficit the U.S. suffers with China. At the end of 2017, those words appeared to have been largely ignored by the Asian superpower. The gap between American and Chinese trade actually got larger. China shipped upwards of $375.2 billion more in good to the U.S., nearly $8 billion over the 2016 tally. The total trade deficit expanded by more than 12 percent at $566 billion, a 9-year high.
China’s government has been accused of flooding the market with goods that are excessively subsidized by its government in a deliberate effort to undercut private companies and gain an unfair market share. U.S. Commerce Secretary Wilbur Ross recently released a statement that the Trump Administration has every intention of closing that unacceptable gap.
Since Pres. Trump slapped more than $50 billion in tariffs, China offered a measured response of $3 billion on 128 products that led some pundits to believe a trade deal may have been on the table. That appears unlikely as Pres. Trump unleashes another volley of tariffs aimed at punishing China for intellectual property theft.
According to a report in Business Insider and other sources: “Estimates of the cost of counterfeit goods, pirated software and theft of trade secrets could be as high as $600 billion.” That figure tops the total annual goods and services deficit the U.S. has suffers annually. China appears ready to up the ante with a proposed $50 billion in additional tariffs in the que. Pres. Trump reportedly remains “defiant.”
U.S. On Collision Course With Mexico
Pres. Trump engaged in harsh rhetoric about what he called Mexico’s stealing of American manufacturing plants and jobs through the NAFTA deal. He also vowed to secure the southern border and force Mexico to pay for it. While a new deal is being negotiated, Pres. Trump has threatened to scrap the trade deal altogether and a recent illegal immigration caravan sparked his ire.
Major media outlets reported that a caravan of more than 1,200 migrants from Central America have been aided by Mexican officials. Their goal is to illegally cross into the U.S. and claim asylum. The strategy had been effective under the Obama Administration. The illegal immigrants and Mexican officials had been thumbing their nose at the American president, saying he could do nothing to stop them.
In a counter-measure, the administration is deploying the National Guard and potentially other military options to protect the southern border. Pres. Trump has once again let Mexico know that continued border negligence and willfully aiding illegals could result in his scrapping a trade deal and leveling harsh tariffs on imports. Reports indicate the Trump Administration has expressed extreme displeasure over automobile imports that were once manufactured in the United States.
Arizona Congressman Paul Gosar agrees that increased economic pressure should be brought to bear if Mexico continues to leave its side of the border unsecured.
“Kudos to President Trump using every ability that he has to influence this,” Gosar said. “I said it before when the NAFTA discussions were going under, that support of our border is paramount, and if Mexico is not going to do it on our northern order like they do on their southern border, then we’ve got a problem.”
Pres. Trump vs. The World
If the American public had not already grown accustomed to the Republican firebrand tangling with critics, opponents and other world leaders, the threat of leveling tariffs against the EU would be a shock. It’s not.
Like China, the U.S. suffers a trade deficit with the EU that is largely based on the European nations heavily taxing American imports. The U.S. has only minor tariffs on EU goods. The time to level the playing field appears to be at hand.
In recent remarks, Pres. Trump has let EU leaders know that equal and proportionate tariffs are imminent unless the NATO allies reduce theirs to a fair and equitable degree. The EU has responded with threats to impose even higher penalties against American goods. Clearly other nations cannot handle the notion they would be competing against American workers on a level playing field. Pres. Trump appears ready to let the tariffs fly in this global economic showdown.
~ Liberty Planet
