China vs. the United States

China vs. the United States

Written by Alfonso Elizondo


According to BBC World, the trade surplus in favor of China is close to 347 billion dollars a year and it would be wiped out by an escalation in protectionism in the world’s two largest economies in the case of a conflict between them. Consequently, Western experts assume that Beijing has more to lose than Washington, although there are also those who think that this conflict could be the end of the United States as a great financial and military power. So far China and the US seem to be at the stage of mutual threats before a major conflict which, in the opinion of Roberto Acevedo, director general of the World Trade Organization (WTO), could trigger a global economic recession.


On April 2, China announced tariffs of between 15 and 25% on 128 US products, including aluminium scrap, pork, nuts, fruits and wine, to the tune of 3 billion dollars. This led Washington to say that this situation was distorting global markets, so much so that Wall Street reacted with fears about a possible trade war and the Dow Jones index fell by 2.7% in one day. This announcement was Xi Jingping’s answer to Donald Trump after he decided to impose heavy tariffs on steel and aluminium imports and impose trade restrictions on Chinese products to the tune of more than 60 billion dollars.


According to Willliam Alan Reinsch, senior advisor at the Center for Strategic and International Studies headquartered in Washington, China prefers to negotiate than to fight since it has more to lose in a trade war because the United States buys more than it sells and all conflicts in trade negotiations in the past were resolved through diplomatic agreements without having to grant special concessions.


For his part, Barry Eichengreen, professor of Economics and Sciences at the University of California believes that China is an economy that depends on its exports and fears for the stability of the global trading system, so it has more to lose in a trade war between both countries. Moreover, Eichengreen points out that it suits China for the situation to escalate in order to demonstrate that it has global leadership and thus improve its global reputation as a reliable partner.


China will have to look for alternative markets for its exports, as noted by Roy Bhala, University of Kansas School of Law professor, since the negative economic consequences for China mean serious political consequences for the Chinese Communist Party that is the heart of its internal government.


According to Trump, this week the White House will publish the list of Chinese products that will be affected by the new tariffs with which he intends to punish Beijing for the alleged theft of intellectual property, especially in high-tech products. China has already warned the US not to open ‘Pandora’s box’ and create a wave of protectionist practices around the world. So Xi Jingping is doing everything he can through the diplomatic channel before resorting to more far-reaching measures.


China is trying to join forces with other countries in the world to stop the protectionist explosion that Trump is heading for, but any wrong move could cause repercussions in different parts of the world since the current global economic and financial structure is increasingly interdependent and synchronized.


Apparently, China has developed a dual strategy. In addition to responding with punitive measures it will keep an option open to dialogue and it will alter its economy somewhat in order to open it to American companies since, according to the Chinese, a major confrontation between China and the United States would be a disaster for both countries and for the world in general.


This conflict is threatening to spread to the political sphere with Washington’s approval of the Taiwan Travel Act and the first meeting on the self-governed island between a senior US official, Alex Wong, and Taiwan President Tsoi Ing-wen. While Wong declared that Washington wanted to strengthen ties with the people of Taiwan and increase their capacity to defend democracy, for Beijing, Taiwan is a rebellious Chinese province and an almost sacred component of its internal politics, and that has always led it to react with verbal fury and with a whole series of violent actions every time Taiwan has wanted to separate its island territory from China.


According to the Global Times newspaper, which is controlled by the Chinese Communist Party, this nerve center of the Chinese government asked the government to prepare the country for a military clash with Taiwan, making it clear that diplomatic exchanges between the United States and the island are going to have serious consequences.


The ambassador to Washington also demanded that Beijing modify its collaboration in the pressure it puts on North Korea, as China is lifting the restrictions imposed on trade with that country and trying to undermine the campaign of “maximum protection” that the United States intends to apply against Pyongyang


This coincided with the shipment to the area of ​​the Chinese aircraft carrier Liaoning, which has led to a general alert in Taiwan’s aviation and navy. But as has always happened with Trump, his strategies of fake attacks have always been denied a few days later through personal messages on social networks. Hopefully this will happen soon or we will be on the brink of the Third World War and perhaps the end of the world today.


Addendum: There is no doubt that the Planet is on the verge of two serious problems: uncontrollable climate change and the political leadership of an idiotic President.