No deal will be: the US and China begin a trade war to death

There will be no deal ... Donald Trump once again bewitched the whole world, with one single tweet crossed out the titanic work of many people, both in their own country and in the Celestial Empire, who have been working hard for months to achieve at least the most fragile compromise in the protracted economic confrontation two powers. And now what? "Trade war" for mutual extermination ?! There may not be a war. But there will be, as they said in Soviet times, “such a struggle for peace that there will be no stone on the stone!”

But not so long ago, the head of the White House himself, radiant with optimism, with his inherent hypertrophied love for consuming superlatives, spoke of a “remarkable agreement”, “unprecedented progress” in negotiations with Chinese comrades and the like. His enthusiasm was largely shared by even a much more restrained US Secretary of Commerce Wilbur Ross, who at the beginning of the year announced the real possibility of reaching a “good agreement” and a “reasonable settlement” with China. They were quite optimistic about the negotiation perspective in Beijing as well. And so, everything collapsed. Around the world there is a collapse of stock indices, oil is getting cheaper, brokers and traders are swallowing horse doses of sedatives, and the Chinese, for whom, it would seem, complete equanimity is a national trait, find it difficult to find words for a worthy answer.

What is he thinking about?!

What actually happened? On May 5, Donald Trump gave the following sensation in his favorite Twitter: from May 10, he intends to inflate customs duties on Chinese goods exported to the United States with a total value of $ 200 billion from the current 10% to 25%! And that's not all. The President is going to go much further and already now says that the 325-billion-dollar export segment from the Celestial Empire will also be taxed by them! Yes, and at a similar rate of 25%. As a reason, the American leader pointed out “China’s too much slowness in the negotiations,” as well as, in his opinion, the Beijing representatives’ intention to “change the finished text of the agreements in their favor.” Well, he has such suspicions ...

The very next day, the head of the White House on the same Twitter condescended to the announcement of additional justifications for his decision. According to him, the annual losses of the United States in world trade range from 600 to 800 billion dollars. 500 of them account for deals with China.


- states Trump.

Incidentally, he quite seriously believes that the duties imposed by him 10 months ago on high-tech goods from the Celestial Empire “partially explain” “remarkable successes” in the economy USA. It is unlikely that anyone will be able to convince the president of this, so that, most likely, a new round of “tariff war” between the countries is inevitable - because Trump will not even need Congress approval to translate his plan into reality.

At the same time, most world economic analysts prophesy the very sad consequences of such a sharp change in the course of the United States, and, above all, for themselves. So, the head of the Institute for the World Economy (IfW) Gabriel Felbermire believes that by imposing high duties on the most profitable goods for export, Donald Trump is now "getting" to those groups that importing at similar tariff rates would simply be unprofitable at current prices. Consequently, the end consumers — ordinary Americans — will pay for the voluntarism of their own president, which, in fact, will be hit by a significant rise in price of Chinese products. Washington’s actions in the International Monetary Fund are also extremely negatively assessed. A report published by this organization a month ago already predicted a decrease in global economic growth from the planned 3.7% to 3.3%, indicating the “trade war” between the US and China as the main reason. What to expect now is generally unknown ...

Imminent consequences

Beijing’s response will follow shortly, there is no doubt about it. As a matter of fact, we can speak about his first reaction now: the expected arrival of the Deputy Prime Minister of the State Council of the PRC Liu He, which was expected the other day, has been postponed for three days, while the visit will be reduced. Moreover, according to some sources, the visit of the official delegation of China to the United States in general may be canceled. This, by the way, would be a completely logical step - but how do you order to conduct business with such "negotiators"? Just last week, US Trade Representative Robert Lighthizer and Treasury Secretary Stephen Mnuchin traveled to the Celestial Empire just for the next consultation on an upcoming trade deal, which they themselves described as “productive.” And now such a twist! What to talk about further?

The vast majority of experts are inclined to believe that if Donald Trump really wanted to push Beijing in this way to greater flexibility in negotiations on key US issues, then the effect achieved will probably be exactly the opposite. Well, China does not accept conversations from a position of strength and attempts to “engage in dialogue” with Colt, who is assigned to his temple! Moreover, the purely economic “sharp movements” of Trump coincided with another US demarche, which caused a storm of indignation in the PRC. On May 4, the two missile destroyers that make up the US Navy Seventh Fleet Preble and Chung Hoon defiantly “defiled” 12 nautical miles from Spratly Island, one of the disputed islands in the South China Sea. In addition, US Navy officials said the campaign was aimed at "challenging excessive maritime ambitions" (of which it is clear) and "ensuring free shipping." In Beijing, they considered the actions of American naval sailors "a violation of the sovereignty of China" and in the sharpest form demanded that Washington "stop the provocations."

For a very short time, the United States had the strength to pretend to be “civilized partners” capable of resolving matters at the negotiating table — they again returned to the beloved and familiar “gunboat diplomacy”. That's just the times now for her are somewhat inappropriate. The Chinese dragon by such actions can only be enraged to an extreme degree. As a result, retaliatory duties, the introduction of new trade restrictions and the like, which are completely incapable of stability and development on a global scale, will most likely follow. When in the deadly battle two powerful economies of the world converge, striving to inflict maximum harm on each other, little will not seem to anyone. Russia seems not to be directly involved in this mess, but the same drop in oil prices caused by Trump’s actions will certainly not please Moscow.

Was peace possible?

On the other hand, the prospect that even if a “wonderful deal” were signed, the conflict between China and the United States would have evaporated, as if by magic after the handshake of President Trump and Chairman Xi, is extremely unlikely. Too many contradictions have accumulated between Washington and Beijing. They are too global. After all, the matter is not only in the deficit balance of trade, which the head of the White House seeks to redraw in favor of the United States with truly manic perseverance. This business, in principle, is fixable. And not even in the Chinese “forced” transfer of aliens to them that was so annoying the Americans of technologies. This issue has less and less fundamental importance for China, with its colossal scientific and technical potential and an ever-growing abundance of its own developments and know-how.

Walking towards the Chinese partners, Trump even agreed to remove from the text of the agreement references to alleged facts of industrial espionage and “subversive activities in cyberspace” on their part. Damn them, all the same, as in the old joke about Stirlitz, they will fall off! However, the United States continued with a stranglehold on other items that were as important to them as unacceptable to China. It's about the practice of state subsidies for the leading "flagships" of the Chinese economy, which Washington demanded to stop. It is highly doubtful that Beijing would do this, and even in the current situation, under the pressure of new threats. As well as holding policy “Open door”, which would mark a massive penetration of American investment, goods and services into the country's domestic market.

Moreover, throughout all the negotiations, Washington has been stubbornly trying to reserve the right to be the "last resort" - that is, to introduce sanctions and other restrictions (including duties) at its own discretion in cases where it seems to him that Beijing " deviates ”from the terms of the transaction. If this is not another attempted dictatorship, then what ?! It is hard to imagine that Xi Jing Ping would put his own signature on an agreement concluded on such humiliating conditions. The expression "lose face", known to the whole world, is of Chinese origin .... Yes, and why would he do that? Yes, the United States is today China's largest trading partner, but not the only one. The 21st EU-PRC summit, held not so long ago in Brussels, proves this in the most excellent way. In the European Union, China can be arbitrarily honored by China as a “strategic competitor," but at the same time, only in Paris, President Xi signed a contract for at least $ 40 billion. The Chinese "one way" inexorably covers Europe with its delicate silk loop ...

The rivalry between the USA and China is much wider and deeper than the banal debate about who should buy from whom in large volumes. Washington’s throat is China’s breakthrough in high technology, its ever-growing military power and growing geopolitical leadership. But in these matters, the Americans will not help with any fees. By and large, the conflict between the United States and China has the same roots and the same basis as the confrontation with Russia - an attempt to prevent the creation of a new, multipolar world. They do not want to accept the truth that any efforts directed against the objectively ripened historical processes are doomed to failure initially.