Opinions
2019.08.06 18:05 GMT+8

Losing trade wars is easy

Updated 2019.08.06 18:05 GMT+8
CGTN

Editor's Note: Chris Hawke is a graduate of the Columbia Graduate School of Journalism and a journalist who has reported for over two decades from Beijing, New York, the United Nations, Tokyo, Bangkok, Islamabad and Kabul for AP, UPI, and CBS. The article reflects the author's views, and not necessarily those of CGTN.

Markets are falling around the world in the wake of recent escalations in the U.S.-China trade war.  

U.S. business leaders want negotiations to continue and outstanding substantive issues to be resolved. But Trump, at least so far, is looking for support from his base on Main Street, not Wall Street. 

Trump has often been compared to a chess player who can only think one move ahead. This tendency has been used to explain things like his ill-advised government shutdown, which his own top advisors and political allies warned him against. 

This inability to see into the future may also explain why Trump may not have anticipated the most recent move in the trade battle: China has announced it will stop buying U.S. agricultural products, which will have a devastating effect on farmers, a key part of Trump’s base.  

Prior to Trump’s trade war, China bought more than 30 million tonnes of U.S. soybeans in 2017.  According to U.S. data, the U.S. delivered 5.3 million tonnes to China in the first five months of this year, down from 15.2 million tonnes in the same period a year ago. 

John Boyd, and president of the Black Farmer's Association, checks the condition of a soybean field for harvesting in Baskerville, Virginia on January 8, 2019. /VCG Photo

With China's latest move, that number threatens to drop to zero. Once China starts buying from other countries, it is not assured that it will start buying from U.S. farmers again in the future. 

Trump claims he can use income generated from tariffs to compensate farmers for their losses. But this is not a sustainable solution. Painful loses for U.S. farmers show that Trump's strategy for energizing his base by playing tough with China is leading to results he cannot control. 

The Chinese government has other tactics it can use, including placing companies on China's list of "unreliable entities," or ceasing to buy other US products like Boeing airplanes.

Perhaps Trump does not really want the trade war with China to end. This is suggested by his antagonistic tweets sure to paint the Chinese into a corner. 
Nobody likes to be humiliated, and this is especially true of the Chinese.

Trump recently tweeted: "China wants to make a deal with the U.S., and wishes it had not broken the original deal in the first place." And also: “If & when I win, the deal [the Chinese] get will be much tougher than what we are negotiating now...or no deal at all." 

One explanation is that Trump's promises to restore American manufacturing to its bygone glory days have not been fulfilled, and he needs a scapegoat, or at least a reason why his promise will not  come true until after the next election. 

Any trade deal he is likely to make with China will be incremental and modest, like the deal he made with Canada and Mexico, and will not provide him the red meat he seeks to feed to his electoral base.  

Trump likely knows any deal will not change the fact that old school manufacturing jobs for high school graduates are not coming back to the U.S., despite his nostalgic promises to "make America great again." Modern manufacturing jobs will go to highly trained people who understand technology and robotics. 

Trump thinks he can win politically by appearing to be tough on China. One of his repeated claims on Twitter and at election rallies is that China hopes a Democrat will be elected in 2020 so it can get a better trade deal. 

This trade war has become about optics and drumming up support, rather than addressing the substantive issues that U.S. business community wishes to see resolved. 

U.S. President Donald Trump gestures as he arrives to a "Make America Great Again" campaign rally in Cincinnati, Ohio, on August 1, 2019. /VCG Photo

Another explanation of Trump’s actions is that continued trade fiction could place further pressure on the U.S. and Chinese economies to decouple, a policy goal of Trump and some advisers that aims to bring manufacturing back to American shores.

Decoupling the world's two largest economies would be better accompanied by considered consultations with U.S. business leaders and a long-term strategy rather than by taunts and tweets. However, perhaps Trump knows that the business community would thwart a decoupling policy, and has chosen to take a Twitter torch to trade ties instead. 

If relations between the two sides continue to deteriorate, squandered trust and goodwill will be hard to restore. Billions of dollars in wealth created by trade between the two nations will evaporate. Trump's original stated goal of getting a better deal for the U.S. will end up with disrupted trade ties and no deal at all. U.S. farmers will need to seek new markets. U.S. manufacturers will need to build new supply chains — hopefully in the U.S., according to Trump's line of thinking. 

If trade ties rupture, the common ground that held back both sides from taking aggressive geopolitical or even military action in areas such as the South China Sea or Taiwan will no longer be a restraint — something that may be an unstated long-term goal of a small sliver of extreme China hawks.  

China and the U.S. need to sit down and make a deal. Scoring domestic political points from the trade war is already backfiring and spiraling out of control. Strategically and economically, the two sides can accomplish more as friends than enemies.

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