World must speak out against United States' economic vandalism
Updated 11:59, 06-Aug-2019
Tom Fowdy

Editor's note: Tom Fowdy is a British political and international relations analyst and a graduate of Durham and Oxford universities. He writes on topics pertaining to China, the DPRK, Britain, and the U.S. The article reflects the author's opinion, and not necessarily the views of CGTN.

Following a fall in the value of the Chinese Renminbi breaking seven U.S. dollars, the Trump administration moved immediately to designate Beijing as a "currency manipulator" on August 5, releasing a statement which vowed to take action with the International Monetary Fund (IMF) in order to eliminate "China's competitive advantage." The move came just hours after a Trump tweet complained about the devaluation, and ultimately followed through on a threat that he had been making since his election campaign.

Inevitably, markets tanked at the announcement. America's Dow Jones suffered a fall of 2.9 percent, with S&P 500 also down by three percent. Almost immediately, the U.S. dollar also fell against other major currencies including the Japanese yen. Although Bloomberg notes the U.S. designation is "largely symbolic," economists have responded with dismay to the announcement, observing that the trade war is now entering "new territory" and warned of increasing dangers to the U.S. economy. They also noted that China is not actually manipulating its currency at all, and such is a label that is well outdated.

Regardless, the situation begs the question: When will the world speak out against Trump's trade war? At this point, the facts are well and truly clear. The President is engaging in an act of global economic vandalism of which the repercussions far exceed China and the United States. The administration's erratic, reckless and norm-breaking behavior is upheaving global growth, disrupting markets around the world and hurting prosperity. 

U.S. Trade Representative Robert Lighthizer (L), Chinese Vice Premier Liu He (C) and U.S. Treasury Secretary Steven Mnuchin (R) are at Xijiao Conference Centre in Shanghai, July 31, 2019. /VCG Photo

U.S. Trade Representative Robert Lighthizer (L), Chinese Vice Premier Liu He (C) and U.S. Treasury Secretary Steven Mnuchin (R) are at Xijiao Conference Centre in Shanghai, July 31, 2019. /VCG Photo

His uncompromising belief that he can force China to capitulate to one-sided American terms through continued escalation is inherently false. Thus, it is time the world makes it clear that his actions are destabilizing and intolerable.

Escalation in the trade war is coming from one side and one side only: that is the U.S., the Trump administration believes that it can weaponize American economic power to force China to capitulate to unilateral preferences and in the process of doing so, it has shown little interest in compromise. Despite months of talks and even discussion about a "deal being close" – the White House has decided not to opt for pragmatism or middle ground, but instead escalate the situation every time with more tariffs and measures, believing economic pain can make China desperate.

However, there is a bigger picture that is being missed. The impact of the trade war is not exclusively defined to economic relations between China and the United States, but being the world's two largest economies, Trump's actions have global repercussions. Trade tensions have repeatedly cut forecast for global growth, and are having an even more detrimental impact on the economies of the Asia-Pacific. 

The People's Bank of China in Beijing. /VCG Photo

The People's Bank of China in Beijing. /VCG Photo

The White House cannot seem to grasp that economics works as flow, a chain process, therefore what affects an enormous economy such as the U.S. or China sends out ripples which immediately implicate others.

In this sense, the Trump administration is pursuing an act of heinous vandalism to the global economy. It is upheaving markets with uncertainty, disrupting supply chains and harming prosperity. Given this, it is time that the nations of the world speak out against the Trump administration's actions. Regardless of where they stand on China, it is a certainty that what we witness today is an assault on their national economic and commercial interests. Washington is proving to be an unreliable and destabilizing partner.

Thus as a whole, whilst the defenders of the trade war may argue these decisions are a necessary sacrifice on behalf of U.S. interests against the "China threat." As noted above, the idea that China can be forced into a corner is at best a fantasy and as of present, is making a deal less likely. Therefore, in the end, the trade war will certainly cause a great deal of harm to the U.S. economy, as well as others too. Washington's own credibility as a global economic powerhouse will be permanently and irreversibly damaged.

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