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China-US relations has come to a crossroads [Copy link] 中文

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Post time 2019-8-25 18:29:11 |Display all floors

Editor's note: Dr. John Gong is a research fellow at Charhar Institute and professor at the University of International Business and Economics. The article reflects the author's views, and not necessarily those of CGTN.

Within the last 24 hours, the Sino-U.S. trade spat has been taken to a whole new level. This is no longer just about trade deficit or the so-called "structural" issues in China's trade practices that some Americans are concerned about. Our two countries' relationship has now indeed come to a crossroads.

On the evening of August 23, China's Ministry of Finance announced a new wave of tariffs of between 5 percent and 10 percent to be imposed on 75 billion U.S. dollars' worth of U.S. imports. Depending on the products, these new tariffs will take effect on September 1 or December 15. This move is clearly in retaliation against Trump administration's decision to place 10 percent tariffs on 300 billion U.S. dollars' worth of Chinese imports, announced earlier this month. The Chinese response is a measured one by all standards, as the tariffs are fairly moderate coupled with exemptions on a range of products that importers can file.

Within hours, President Trump responded with a feverish tweet storm. The wordings are vicious. The intention is ill. And the fire and furor in the tone of his tweets is palpable.

He said, "Our country has lost, stupidly, trillions of dollars with China over many years." He said, "We don't need China and, frankly, would be far better off without them." He even asked, "Who is America's bigger enemy, Powell or Xi?"

In the tweets, he ratcheted up a notch with the planned tariffs on 300 billion U.S. dollars of Chinese imports from 10 percent to 15 percent. More importantly, he ordered American companies to "immediately start looking for an alternative to China, including bringing your (American) companies home and making (your) products in the USA."

While the pundits were questioning where that presidential power comes from, Trump put out another venomous tweet, possibly on Air Force One on the way to Paris for the G7 summit:

"For all of the Fake News Reporters that don't have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!"



US President Donald Trump speaks with reporters on the South Lawn of the White House in Washington, U.S., before his departure to France to attend the G7 summit in Biarritz, August 23, 2019. /VCG Photo


This piece of legislation Trump refers to is known as International Emergency Economic Powers Act (IEEPA) of 1977. It empowers the U.S. President with broad authority and an enormous range of financial measures to regulate foreign transactions after declaring a national emergency in response to any unusual and extraordinary threat to the U.S. originating from a foreign source.

"Unusual and extraordinary threat" essentially implies a quasi-war party in peace time. For example, the president can prohibit any transaction or trade of property in foreign exchange. So even though he does not have a direct mandate to issue orders to American companies, indeed he can go his way in a de-facto manner after declaring a national emergency vis-à-vis China.

This tweet cannot be more reflective of what Trump's current thinking of the China issue is. He is no longer treating it as a trade issue anymore. Trump would essentially be waging an economic war on China if he declared a national emergency on the issue – at whatever cost to the U.S. economy, to American farmers, to his 2020 Presidential election, or to whatever that is relevant to America's national interests in the short run. Trump is viewing this fight with Beijing as America's existential challenge, a stance in fact not so much different from his previous political adviser Stephen Bannon. By invoking the IEEPA, he is effectively treating China as an enemy state.

In a press interview reported by Associated Press a few days ago, Trump admitted the harm the trade war has done to the U.S. economy and the prospect of a recession. But he doesn't care about these issues as he brushed off the negative impacts as "irrelevant."

"It is about time (to take on China), whether it is good for our country or bad for our country short term," he said. And he added, "My life would be a lot easier if I didn't take China on. But I like doing it because I have to do it."

Beijing's strategy so far has been to argue for a case based on benefits to the U.S. and harm otherwise. This argument is backed by punitive measures pointedly targeting Trump's political base. But it seems this is not working, because Trump doesn't care about these things anymore. He has taken the game to a whole new level. In accordance, China's strategy also needs to be taken to a whole new level. Or just prepare for the worst.

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Post time 2019-8-26 08:58:12 |Display all floors
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Post time 2019-8-26 17:51:28 |Display all floors
China may have to prepare for the worst if only to show the next US president that she is resilient and strong enough to brace a permanent decoupling between the two economies should subsequent presidents of the US try to continue in one form or another what Trump has been doing.


Reminding the US on China's bottomline is especially relevant considering the anti-China rhetoric triggered by the Trump administration viewing China as an existential threat has garnered US bipartisan support which will take more than a recession or election to unravel, combat and diminish.


The US has applied its IEEPA before but always with a national security nexus and more importantly not because of economic disputes. The worst case scenario is Trump in trying to circumvent litigious brakes will start a physical war in order to justify his IEEPA authority beyond just trade disputes.


He will however need to prove why China is a national security threat to the US in the mould of Russia, Iraq, Iran, Serbia, North Korea, Sudan, Somalia, Yemen, Congo and Venezuela but given how the US GOP has all but fallen under his thumbs, he can implement the Act even before suits to stop him are filed right up to the US Supreme Court which however is now almost a constitutional pro-rightist body.

While the IEEPA may not allow Trump to order US companies to leave China, he can use it to block future US investments in China, freeze China assets in the US and elsewhere and exclude China's financial institutions from the US global financial system even to the extent of embargoing China's access to the SWIFT system.


The consequences of doing so in pursuit of total decoupling are however more than dire as the present trade war has already shown even without it.


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Post time 2019-8-26 18:08:07 |Display all floors
Shamelesslover Post time: 2019-8-26 08:58
Well well well, if Trump needs me to join the new run of trade talks with China, I'd like to offer m ...

Hmm,
can't help it but I got the feeling you want to milk the  chosen ONE ...


    there ain't any  'positive outcomes  from either sides in the talks.'
        Mania is taking over, even the Western press did figure it out...

On the long run, uncle Sam will have to try to make the best out of it; painful or shameful, it simply want matter.

   After all, a 1/3 of a billion US folks (minus the chosen ones of course) depend on a leader...

Wars, are getting outdated and hurt the Initiator more as the Target; regardless how many time zones separating them  ...

     Nowadays, brains are fondly looked upon, warmongers are self destructive...

        Simply take note of how Youngsters are being looked upon after trying to destroy H.K...
Trees etc manage to heal correctly to avoid rotting, our educated youngsters wouldn't even know how to feed themselves without their parents...

Once a limb turned rotten, amputation or surgical removal of all or part of a limb is the result...

  The foolish attitude that the ex colonial master-uncle Sam or Formosa would take care of them like a lost soul is: as I said above; foolish...

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Post time 2019-8-26 18:22:42 |Display all floors
This post was edited by markwu at 2019-8-27 09:12

Even US citizens have lamented that Trump is playing reshove poker while President Xi responds with three-dimensional chess.


While China has consistently responded with wiser counsel, admirable calm and proportionate force, Trump's US has been flailing and adamant to get its bullying ways, abetted by a potus who changes his mind which he cannot seem to make up for himself in order to hide the lies he has laid on his own citizens, for instance, that China pays for the tariffs the US exacts on China goods (counterpoint: show the receipts).

Trump's behavior at the ending G7 meet has shown as much. He was asked by more than one reporter if he had “second thoughts” about the recent escalation of his trade war with China.  He replied, “Yeah, sure. Why not. Might as well. I have second thoughts about everything.”

Hours later, his White House twisted his reply to say he actually meant he regretted not increasing the tariffs. If so, one wonders how his staff not at the meeting would have known what he had meant - unless he had told them to tell the world - which however begs the question why he didn't correct himself then with the reporters.


Furthermore, his advisor Kudlow offered to say Trump had difficulty hearing the questions. One wonders if he was wearing Trump's ears to know his boss had heard the questions wrongly to which his boss had answered emphatically with the phrase 'second thoughts' - a phrase which invariably implies the negative of something already done, i.e. the tariff escalations.

How can anyone talk to or negotiate with someone who lies publicly and changes his mind constantly until his staff have to do likewise in order to protect his other appearances, in this case a negotiation not yet firmed up between him and Abe on wheat for autos?

Trump and his Lighthizer, Mnuchin and Kudlow should remind themselves - China is not japan.







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Post time 2019-8-26 18:35:55 |Display all floors
Actually if Trump is not having second thoughts about hitting China with more tariffs, why not hit her all the way with more tariffs?


For the same reason he has delayed the earlier tariffs until US Christmas shopping is over, he must have now realized his tariffs on China are paid by US consumers not China so that the trade war he is prosecuting on China is hurting US citizens and industries more.


So his 'second thoughts' blurp is really his own admission that his trade war tariffs on China have backfired. A freudian slip, perhaps.


But having alluded to his own appointed US Fed Reserve's Powell as an enemy for not giving more interest rate cuts in order to fuel his trade war fight on China, he is now saying the country whose President he had called a friend before, now an enemy on the same rank as his own Powell, now wants a deal after a late-night call.

With all his narcissistic delusions as a poker player, his burning cigar has just exploded.


Therefore, can anyone expect anything to come out positive and conclusive for once from the upcoming revived talks?


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Post time 2019-8-26 19:02:28 |Display all floors
This post was edited by markwu at 2019-8-27 09:17

Past-US Presidential advisor Lawrence Summers has concluded of Trump's administration:

"Deeply misguided policy and strategy has been joined for some time by dubious negotiating tactics and promises not kept.  We are at a new stage now with very erratic presidential behavior and frequent denials of obvious reality. I know of no U.S. historical precedent.”

However, he has omitted to add the key difference of China that is not the US is that China has a huge population and remains an emerging economy with historical constraints needing national rejuvenation and she has the most enormous market potential and capabilities in the world, so that in realizing these, her CPC is systematically applying pragmatic reforms at a pace applicable only to China and her unique market model for those reasons, not at the behest of foreign powers with bad pasts of colonialism and present failing market models and political ideologies.

China has been steady and systematic.  The US under Trump on the other hand has been flailing and wailing, tearing itself asunder on a mad campaign to stop China's rise by a concoction of hybrid wars, bringing collateral damage on all economies across the globe.

The greatest tragedy brought about by the US in its relations with China is the tragedy of trying to burn the bridges between the two peoples. US and Chinese peoples have much in common: can-do approach, big-of-heart, sharp wits, incandescent humor, friendly and brotherly at human and family levels, and mutually hospitable.

Now, Trump and his hawks have pushed all that into a mental hospital of their own construction. All because they haven't really tried to understand the core essence and rationale of China's policies.  On the other hand, perhaps they already have but still want to keep their agenda of diminishing China at all costs and with whatever means; how should China respond to them then?

Trump is now saying he has to do what previous US Presidents have omitted to do with regards China. One wants to ask - has he first checked with them why?

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