By Alistair Farrow
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US trade war makes all rivalries sharper

This article is over 4 years, 11 months old
Issue 2654
Trump claims his relationship with the Chinese president is the best
Trump claims his relationship with the Chinese president is “the best” (Pic: Flickr/The White House)

The trade war between the US and China ratcheted up a notch over the past week.

Donald Trump on Monday increased tariffs on £250 billion of Chinese goods coming to the US from 10 percent to 25 percent. That’s on top of last Friday’s tariff increases on £150 billion of Chinese goods.

The total value of Chinese exports to the US that are affected now stands at £400 billion.

These are presented as new developments. But Trump had decided on his strategy at least a year ago.

Bob Woodward, in his book Fear, reports a spring 2018 exchange between Trump and his cyber security adviser Tom Bossert. They discussed the question of tariffs on Chinese imports.

“Trump’s hands and fingers went up again. ‘You tell them £115 billion. Wait! You tell them £115 billion is nothing. He’s ready to go to £400 billion because he’s tired of not being treated fairly. That’s what you tell them’.”

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Later in the same conversation Trump reportedly instructed Bossert to show the carrot after the stick.

“‘Then you say, ‘It’ll be all right because the relationship Trump has with Xi is so…’’ A pause. A refinement.

“‘It’s the best.’ Wait! ‘You’ve never seen such a good relationship between two presidents in your life. Maybe ever’.”

So Trump has a plan, but the danger of trade wars is that they can lead to cycles of retaliation. They can also stoke up other imperial rivalries, including military ones.

The current tariff increases do not apply to goods that are currently in transit. The average length of time it takes to ship goods from China to the US is three weeks. That means there are three weeks before the tariff hikes start to take effect.

And the G20 summit at the end of June gives Trump a chance to prove his “good relationship” with Chinese president Xi Jinping.

Trump is clearly milking the negotiations as part of his bid for re-election in the 2020 presidential elections.


He suggested Chinese negotiators are waiting “to see if they could get lucky and have a Democrat win. The deal will become far worse for them if it has to be negotiated in my second term”.

If Trump negotiates a bad deal for US capital, or no deal, it will be used to attack him in the election.

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His bellicose grandstanding means Jinping will also be unwilling to back down. But Trump is relying on the relative strength of the US economy compared to China as a threat in his imperialist game of chicken.

And he is spurred on by an emboldened protectionist wing of the US ruling class.

Michael Sturmer, chief executive of the Coalition for a Prosperous America (CPA), said, “President Xi has now turned the trade doves against him by once again reversing past promises. And he underestimated the resolve of president Trump.”

Disgracefully, the leadership of some US trade unions has cosied up to the protectionist elements of the US ruling class. The teamsters’ union and the AFL-CIO trade union federation are among those have representatives on the CPA board.

They think there is a shared interest between US workers and bosses against Chinese firms exporting goods to the US. Such thinking has seen the hollowing out of many once?militant US trade unions.

Instead they should be looking to the US teachers’ strikes as a way of winning, and to international solidarity rather than a sham national interest.

Meanwhile, the international ruling class is looking on at the trade war in horror.

The bosses’ Financial Times newspaper is nervous. “The US is right to insist that China treat foreign investors equally,” read its lead editorial on Monday. “It is also right to demand an elimination of subsidies to China’s national champions.”

But neither Trump nor XI Jinping “should allow political ego to get in the way of a pragmatic truce”. Trump, as so often, is playing for high stakes. But he doesn’t care who loses so long as he boosts his own chances.

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