Trade Wars work: Trump and China begin Negotiations
Extreme Left Wing writer, Paul Krugman, begs to differ. He believes it’s all about China owning Trump.
The US and China have decided to reduce the tension in the tariff front and, after two days of intense meetings in Washington, they have closed a principle of agreement.
Beijing agrees to reduce the US trade deficit and both powers cancel the tariff increases that threatened to trigger a global trade war. Trump, in principle, has achieved its objective.
The pact has not been presented with the usual fanfares. Trump has remained silent and the negotiators have avoided any triumphalism. Everyone knows that the road is still long.
Despite the good intentions, figures have not been agreed and the request of the director of the National Economic Council, Larry Kudlow, that China reduces the US deficit by 200,000 million dollars a year has not been accepted.
Agreement or bribe?
Meanwhile, to the American writer Paul Krugman, it does not seem far-fetched to think and say, although, he has no evidence, that perhaps Trump has been bribed by China.
In a disgusting article with arrogant rhetoric, the far-left columnist raises the question of whether Trump accepted bribes from the Chinese government and in doing so, whether he is endangering the security of the United States.
“Do not say it’s a ridiculous insinuation: given everything we know about Donald Trump, it’s within the limits of what is possible, and even of the plausible.”
Krugman does not present any evidence of such bribery, but in his article, he continues to accuse:
“Also, do not say that there is no evidence: we are not talking about a judicial process, in which defendants are supposed to be innocent until proven guilty. As far as the behavior of the highest authorities is concerned, the criterion is practically the opposite: they are supposed to avoid situations where there is the slightest hint that their actions may be motivated by personal gain.”
Near the end of his verbiage, Krugman gives two examples of what he says, is evidence that Trump and the Republican party are eating from the palm of China.
“Many looks focused on Indonesia, where a Chinese state-owned company had just announced a major investment in a project in which the Trump Organization has a substantial stake,” says Krugman, who offers no evidence of Trump having favoured the Chinese government.
Then, Krugman gives another example of his suspicions:
“Last year, the government strangely endorsed the Saudi blockade of Qatar, a Middle Eastern country that coincidentally houses a major US military base.” Well, the measure was taken shortly after the Qataris refused to invest 500 million at 666 Fifth Avenue, a property full of problems owned by the family of Jared Kushner, the president’s son-in-law. “
Krugman complains that senior government officials have the power to compensate or sanction both companies and other governments.
“Undue influence is always a problem, even if it takes the form of contributions to electoral campaigns or indirect economic compensation through the revolving door,” the supposed economist describes.
It is interesting that Krugman worries about the revolving door since it is that same door that allowed Hillary Clinton to sell arms to Saudi Arabia in exchange for juicy donations to the Clinton Foundation. But Krugman did not remember this problem when he denounced the supposed corruption of the Trump administration.
Trump and China begin negotiations to end Trade War
More than final peace, what has been agreed in Washington are the conditions of an armistice. The dialogue continues and now a team of American negotiators will travel to Beijing “to work on the details proactively”.
“We have reached a consensus and we will not enter into a commercial war. As we materialize the framework agreement, the rate increases are suspended,” said Treasury Secretary Steven Mnuchin.
Although the agreement is still unfinished, China has publicly yielded to pressure from Trump and has acknowledged that it will have to increase US imports to meet the growing consumption needs of the Chinese people and their need for high-quality economic development, China will increase its purchases of American goods and services. This will help growth and employment in the United States. Both sides have also agreed to substantial increases in US agricultural and energy exports.
The result of the first round of talks comes two months after Trump opened a battle that shocked the world. On March 23, after having suspended the tariff rate with Europe, the US president ordered to impose tariffs on the Asian giant of 25% on imports worth $60 billion.
In Trump’s discourse, China figures as the first responsible for the alleged decline of the American economy. Trump believes that Beijing has taken advantage of the US opening while closing the door to American products. Thus, while China allocates 18% of its exports to the US, the Asian giant only represents 8.4% of America’s foreign sales.
“Our deficit with China is the largest in the history of mankind and I have asked them to reduce it by 100 billion. The keyword is reciprocity. We want mirror rates: if they tax us, we tax the same. What cannot be is that our cars are taxed at 25% and that we only tax theirs by 2%,” Trump said when announcing the tariff increase.
The offensive had been prepared with care. Trump learned to hit with more precision and in this case, he designed a visible climb. First, limited the import of Chinese washing machines and solar panels. He then vetoed Qualcomm’s acquisition of Broadcom, an operation worth $117 billion, and finally, he launched the tariff increase.
The measure was answered in April with a similar one by Beijing. They were the first measures of what was expected to be a titanic pulse and whose outcome could affect global economic flows. At stake, there was much more than a tariff issue.
The very weight of Chinese production in the supply chain was filled by the United States and the huge holdings of US public debt in Chinese hands made it unclear whether there could be a final winner. On the contrary, what was glimpsed was a train crash between two economies that have almost 40% of world GDP and 23% of the planet’s population.
Added to this systemic risk was another factor that was no less influential: the open negotiation to achieve the denuclearization of the Pyongyang regime.
China, which absorbs 90% of North Korea’s exports, plays a key role in this endeavor. Eager to reduce zonal tension, it has helped facilitate the meeting between Trump and the North Korean leader, Kim Jong-un, to be held on June 12 in Singapore.
A trade war would have endangered the diplomatic balances deployed by both sides and reopened the spit of a nuclear escalation.
Under these circumstances, both superpowers have decided to avoid blood.