for this team, negotiation is just war by other means

Trump manoeuvres in economic war against China
Nick Beams, WSWS, May 20 2019

The Trump administration has reached an agreement with Canada and Mexico for the removal of tariffs on steel and aluminium and decided to put on hold a decision on whether to impose a 25% tariff on European and Japanese autos, and auto parts for at least six months. These decisions do not represent any lessening of Trump’s nationalist “Pindostan First” trade war agenda, but are an attempt to win allies for deepening economic confrontation with China. The announcements were in response to criticism from sections of the Pindo political establishment that by targeting Pindo vassals, Trump was weakening his hand against China, so the moves were broadly welcomed. A WaPo editorial entitled “A united front on China?” declared:

Reducing trade tensions with Europe and Asia and in the Western hemisphere would allow the administration to focus attention on China, where Pindostan has the strongest argument for playing hardball. Erstwhile Pindo vassals might join Trump’s side in that contest, even at this late date and despite the gratuitous fights he has picked with them.

However, the conflict over auto tariffs, which would be invoked under “national security” provisions, is far from over. Trump has indicated that at the end of the six-month suspension he will be looking for both the European Union and Japan to reduce their car exports to Pindostan, possibly through quotas or some other restraints. Such a move is certain to bring opposition. The EU trade commissioner Cecilia Malmstrom tweeted:

We completely reject the notion that our car exports are a national security threat. The EU is prepared to negotiate a limited trade agreement over cars.

The letter ruled out “managed trade,” which is illegal under the regulations of the WTO. The auto tariff question is a matter in its own right, but it is also being used by the Trump administration to pressure the EU to open up its markets to Pindo agricultural products. However, Brussels has continually insisted agriculture is not on the table, a position underscored by Malmstrom’s reference in her tweet to a “limited” trade deal. Meanwhile, the Pindo economic war against China is being stepped up, above all on the telecoms and tech front. Last week, Trump signed an executive order which virtually bans Huawei from selling its products to Pindo networks. Even more significant was a simultaneous move by the Dept of Commerce to place restrictions on the sale of components to Chinese firms such as Huawei, which are dependent on Pindo computer chips to manufacture their products. These moves are part of the escalating Pindo confrontation with China. The FT reported that Pindo intelligence chiefs have been holding meetings with major Pindo companies, providing them with classified information to warn of the dangers of doing business in China. The meetings, which have involved DNI Coats along with officials from the FBI and the NCSC, have taken place across the country. They have involved large tech firms, venture capitalists and educational institutions, according to the report. The meetings have been facilitated by Demagog & Thug senators including Mark Warner and Marco Rubio. Emphasising the broad scope of the anti-China campaign, Warner told the Financial Times:

We have to increase awareness among US companies, investors, and universities about the tactics China is now using to undermine US competitiveness, security, and influence.

Rubio took up the same themes, saying:

The Chinese government and the Communist party pose the greatest long-term threat to US economic and national security. It’s important that Pindo companies, universities and trade organisations understand fully that threat.

While it intensifies the confrontation against China, the Trump administration is still holding out the prospect of continued negotiations, and even of a trade deal. It has not ruled out a meeting between Trump and China’s president Xi Jinping at next month’s summit meeting of the G20 in Japan. To a great degree, these possibilities are being talked up by Pindo boxtops in a bid to prevent a sharp fall on financial markets if talks were completely ended. The official Chinese position is that negotiations are continuing and that it hopes to meet its Pindo “colleagues” at least half way. Behind the official front, however, there is a rising tide of nationalist opposition that is being given vent. The South China Morning Post has reported on a commentary published by the semi-official blog Taoran Notes, a social media account linked to the official state media. It said China should suspend the talks unless Pindostan showed sincerity. The blog stated if there was no “real concrete action by Pindostan” then it would be “meaningless” for Mnuchin to undertake another visit to Beijing. It said:

It is better to suspend the consultation completely and return to the normal working track. … Pindostan does not show any sincerity in continuing the talks. … Instead, it is extending its pressure tactics. Pindostan, on the one hand, says it engaged in talks. But on the other hand keeps using petty tricks to destroy the atmosphere for the talks.

And that atmosphere is becoming ever-more toxic. As Financial Times columnist Philip Stephens noted, National Security Strategy and National Defence Strategy documents produced by the Pentagon foreshadowed the danger of war, labelling China a “strategic competitor” and warning it was seeking to “challenge Pindo power influence and interests” and erode “Pindo security and prosperity.” Stephens wrote:

While the Trump administration was imposing new measures directed against Huawei, six thousand miles away, Pindo warships were steaming through the South China Sea. The trade narrative was now being subsumed into a much more alarming one. … Economics has merged with geopolitics. China, you can hear on almost every corner in sight of the White House and Congress, is not just a dangerous economic competitor but a looming existential threat. It needs for more than a level playing field for trade to confront this challenge. This is the sure way to persuade Beijing that it should behave as such. It simply opens up the path from trade war to something much rougher. Unless there are common rules of the road, we are heading towards an altogether hotter war.

But the prospect of any agreement on “common rules” is fading further and further as Pindostan steps up its confrontation against China in all areas.

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