President Trump has let China know that he is ready to conclude a trade deal that addresses U.S. concerns and just as prepared to continue levying tariffs on Chinese exports to the United States if such an agreement cannot be reached. His renewed determination comes as China increasingly displays an eagerness to come to terms with the president, saying now it is willing to work to eradicate the trade imbalance that has tilted so lopsidedly in its favor over the years.
China has announced that it is ready to initiate a six-year effort to boost imports from America by $1 trillion, Bloomberg reports. The goal would be to completely wipe away a Chinese trade surplus with the U.S. by 2024 that came in at $323 billion in 2018. The move comes a little over a week after reports that U.S. and Chinese officials had made progress on efforts to get China to nail down plans to purchase increased amounts of U.S. agricultural, energy, and manufactured goods and services, Reuters reported on Jan. 10.
…Chinese economic growth slowed to its lowest level in 28 years in 2018…
As indicated by the soothing tone struck by President Xi Jinping in his meeting with Trump at the G20 summit in Argentina in December, China dearly wants to put an end to the tariff tussle with America that harms its essential export industry. Reuters reports that officials are poised to reveal that Chinese economic growth slowed to its lowest level in 28 years in 2018, in large part because of the trade war with America.
And things could get even worse. Steven Cochrane, chief Asia-Pacific economist at Moody’s Analytics, told the South China Morning Post in October just how much the Chinese have to lose in an ongoing trade war.
“There would be much more uncertainty that would tend to slow the pace of investment and consumption,” Cochrane said. “Consumers are [already] feeling uncertain about next year, so they are going to pull back.”
The Morning Post reported Cochrane estimates that a 25% tariff applied on China-U.S. trade would cause Chinese gross domestic product growth to fall by 1.2 percentage points in 2019 and would spur a 9.4% tumble in the nation’s stock market.
Trump, meanwhile, calmly informs the country’s negotiators that they can strike a deal or face more tariffs, whichever they prefer. “Things are going very well with China and with trade,” he announced on Jan. 19. Yet the stick remains very much on the table. “If we make a deal certainly we would not have sanctions. and if we don’t make a deal we will,” Trump bluntly asserted. “We’ve really had a very extraordinary number of meetings, and a deal could very well happen with China. It’s going well. I would say about as well as it could possibly go.”
These sound very much like the words of a man confident in the path he pursues. This can and should help him further build up his America First coalition here at home. There is simply no reason why organized labor should hesitate to show its support for a president working so hard to bring manufacturing jobs back to the United States. A recent posting of an article on the United Steelworkers union website titled “Yet Another Sign Tariffs Are Working” highlights the potential Trump has to strengthen his support with blue-collar workers. Quite a different article, posted on the Council on Foreign Relations website, meanwhile, perfectly captures globalist angst. “Trump’s Tariffs Are Killing American Steel,” the sad-sack post is titled. Killing it for whom?
Steelworkers are embracing Trump’s battles on their behalf, while the multinational elite is in an uproar. How telling. More U.S. manufacturing jobs and a fair playing field with China may not be good for a globalist’s tangled profit margins, but they sure do warm the hearts of America’s working men and women.
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