The US is losing the trade war with China

Support CleanTechnica’s work through subsec subscriptions or on Stripe.

If you listen to the mainstream media, the US scored a major victory this week in trade negotiations with China. The so-called president praised himself in his eulogy, saying the outcome of the conversation was a “12 on a scale of 1 to 10.”

China, for its part, agreed to resume buying soybeans from the U.S. and lift its restrictions on the export of rare-earth materials that are vital to the manufacture of all electronics, from cell phones to wind turbines. In return, the US agreed to reduce some tariffs on Chinese imports from 57% to 47%.

But step back from the hyperventilating for a minute and a slightly different picture emerges. Paul Krugman said as he left after the meeting,

“Another little bugger;

• Higher prices for American producers and consumers
• Economic uncertainty
• Global damage to US reputation

“Even if the worst is over in terms of pricing and uncertainty, it is clear that Trump’s tariffs have caused lasting damage to the US economy as well as the global economic order.”

Krugman goes into extensive detail about the difference between declared tariffs and effective tariffs and how some foreign trading partners are gaming the system by transshipping their products through intermediaries or outright lying on their customs declarations. But he saves his harshest analysis for the impact the phoney tariff war has had on America’s standing in the international community — which he predicts will hurt American interests for years to come.

“Soon, I expect, Trump will declare victory after hiking rates and controlling make-up investment numbers. He will declare that he won the trade war. Well, he didn’t.

“The primary benefit from these deals (assuming they happen and last for a while), is that America will stop beating itself in the face. American consumers, producers and workers have been the biggest victims of Trump’s tariffs. We could have won by not beating ourselves in the first place.

Moreover, these deals cannot repair the deeper damage that six months of tariff frenzy have caused.

“First of all, everything — everything — Trump has done on trade, in addition to being illegal, has been a violation of past U.S. agreements with other countries. So we emerge from a trade war as a nation that can no longer be trusted to honor its promises.

“Second, if we look specifically at the confrontation with China, the end result looks like a show of American weakness and Chinese strength. China could offer some cosmetic concessions by promising to buy some soybeans or whatever. The upper hand, and it played it.”

“In fact, I would argue that China is now clearly winning its geopolitical conflict with the US. The US was able to count on the support of its democratic allies. Now it has alienated them, and has developed a reputation for arbitrarily renewing treaties. The US has had an unmatched economic advantage. The world now knows that China is superior.”

Krugman’s analysis suggests that all the obscurity about rates obscures what’s really going on behind the scenes. To score some political points, whatever moral high ground Fat Fallon and his cronies have blown, America can claim it even before January of this year.

For Patrick Wintour, Diplomatic Editor Guardianwrote an analysis of the trade war between the US and China that is similar to Krugman’s.

“Over the past six months, both sides have learned about the other’s leverage and weaknesses, including which trade weapons work best.

“For the U.S., it would be worrying to the extent that China was able to shift U.S.-bound exports to other primarily Asian markets once U.S. rates hit. China, forecasters say, will face a crisis. So it’s likely to be driven by a stock market. Driven by tariffs, the politically risky 3% hit.”

He added, “The US Trade Representative, Jameson Greer, complained on October 15: “China’s announcement is nothing more than a global supply chain power grab. ’ America discovered that bullies could be bullied back, which led to his assessment.

“By one account, the Treasury Secretary, Scott Besant, in assessing the delicacy of the premise, convinced Trump that the cost of confrontation was proving too high, prompting the two sides to make mutual withdrawals this week.

“This war is only for one year, but it could be to China’s advantage. It buys time for China to further advance China in future technologies, including green technology and manufacturing – a field it now dominates, and is the focus of a new five-year economic plan.

“Equally important, China hopes that other countries will see it as responsible and deterrent as a world power not seeking confrontation, but strong enough to resist US coercion. At the very least, the clash of leadership cultures is tomorrow. XI is a blueprint for a battle of position, and not a war of instinct.”

Watching the video from South Korea, the phoney president is stressing all over the Chinese president, who is keeping himself in check and maintaining an almost poker face. It is beyond the imagination of the former, who was never known to read a book, to match the leader of a country who invented the most complicated game for a thousand years ago.

One is reminded of a piece of advice that many of us have heard before: “It is better to be silent and be thought a fool than to speak and remove all doubt.” That’s wisdom that Donald can certainly benefit from.

https://www.youtube.com/watch?v=iku3reweaz0