Cogito Ergo Non Serviam
US Puts China Trade War "On Hold"
The American government announced yesterday that the trade war with China has been put on hold. Treasury Secretary Steve Mnuchin said the two had discussed the various issues involved over the week-end and sufficient progress had been made to justify a change in attitude. "We came away with a very comprehensive framework agreement that needs to be implemented, but has lots of different aspects," he told CNBC just a few minutes ago. When asked if it was a glass half-full or half-empty situation, he said unhelpfully, "It's completely half-full." Those unwilling to parse such drivel will see that China took the Trump administration to the cleaners.
Marco Rubio, a man with whom this journal rarely agrees, was perfectly correct in his assessment of the outcome of the discussions. He tweeted on Sunday, "If putting tariffs 'on hold' means that while we 'talk' #China gets to continue to block U.S companies but do whatever they want here & to steal intellectual property then #China has out negotiated the U.S. again."
In another tweet, he said, "If we make a deal in which #China promises to buy $200 billion from U.S. in exchange for business as usual,the current administration will become the latest example of a White House so desperate for a deal they get beat badly by China in negotiation."
The fact of the matter is that China's concessions consisted of things they were going to do anyway. The joint statement issued over the week-end read in part, "To meet the growing consumption needs of the Chinese people and the need for high-quality economic development, China will significantly increase purchases of United States goods and services. This will help support growth and employment in the United States."
Absent the deal, China would still have to meet the needs of its people. Note also that the statement does not mention the $200 billion amount, or any amount for that matter. A richer China will consume more from the US and elsewhere; that is a given. So, to count this as a negotiating victory is ridiculous. However, it is like the North Korean decision to dismantle its nuclear test site, something the White House is hailing as proof the maximum pressure approach works. In truth, the site was badly damaged by an explosion and partial collapse of the mountain it sits under. Pyongyang would have to decommission it anyway.
Moreover, the New York Times states, "Chinese media contested the concessions. The Foreign Ministry denied Friday that it had offered to reduce its trade deficit with the United States by the $200 billion amount, and on Saturday the state-run People's Daily, considered a mouthpiece for the Chinese government, called the reports 'a misunderstanding'."
The guys who have the most interest in these talks are not impressed. Scott Paul, the president of the Alliance for American Manufacturing, said, "Sometimes it's better to walk away from the negotiating table to reinforce the point to China that our resolve is strong. We need more details, but I'm not encouraged by the direction these talks are headed."
The Trump administration has created a crisis, caved in negotiations to settle the crisis and has declared it a victory. As Pyrrhus said after winning the Battle of Asculum in 279 BC against Rome, another such victory would undo him. The difference is that, unlike Mr. Trump, King Pyrrhus actually won the battle. The Trump administration got mauled and lost over the week-end.
© Copyright 2018 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Ubuntu Linux.
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