Trump shouted "It’s easy to win!" While heading for the "trade war road", the end of the road is unemployment, losses, government tax losses and the reduction of cheap goods.
Trump hoisted a "trade war melting pot" and said that "the job opportunities brought by the trade war will be caught while it is hot!" (Comics are all from cagle Comics website)
Trump fired a shell of "increasing steel import tariffs", but what he got was that he could not increase employment, revenge from allies, rising costs and domestic political influence.
In order to "give priority to the United States" and "make the United States great again", US President Trump really took pains. Frequent lifting of the trade stick is aimed at forcing the "opponents" in their eyes to sit at the negotiating table and maximize the interests of the United States. Facing the American people and enterprises, he has a firm tone and promises to realize the prosperity of the United States; In the face of allies and "opponents", he expressed his emotions and demanded to realize the interests of the United States. However, the businessman president with the aura of "the art of trading" on his head doesn’t seem to realize that it may work in business, but it doesn’t work in international relations and trade. Whether at home or abroad, under the leadership of Trump, the United States and "unreliable" began to go hand in hand.
trade warfare
Can manufacturing return?
"Buy American goods and hire Americans!" This is the goal that US President Trump has repeatedly emphasized. Revitalizing the American real economy is also considered to be one of the important reasons why the United States is bent on provoking trade frictions around the world. However, as the United States continues to overweight in the trade war, what is the result?
Remember Harley, the motorcycle manufacturer who announced his departure because of the trade war and caused Trump’s anger? Harley’s quarterly report shows that its motorcycle shipments fell by 11.3% in the second quarter. The company’s operating profit margin in 2018 was forced to drop from 10.5% to 9%— 10%。 In addition, according to the latest news, the Harley-Davidson motorcycle factory in northern Kansas is about to close, taking the first step to transfer production. Harley is currently building a new factory in Thailand, and plans to transfer more production to India, Brazil and Thailand to save costs.
Harley is certainly not the only American company that is complaining. BMW, General Motors and Whirlpool all expressed their dissatisfaction.
According to Fortune magazine, BMW announced that it would increase the sales price of two American-made SUVs in China, which is the latest sign of the impact of Trump’s trade war. According to the Financial Times, analysts said that import tariffs are "the main threat to industry profits" and warned that the losses caused by tariffs to BMW and Daimler may reach 4% to 5% of the profits in 2019. BMW and Daimler invested a lot of money to set up factories in the United States, and now they are affected by the trade war provoked by the United States, which is ironic.
General Motors and home appliance giant Whirlpool have also lowered their performance expectations. According to the report of the Nihon Keizai Shimbun, there are voices in the financial sector that are worried about the investment willingness of enterprises and the shrinking of personal consumption. The US economy remains strong at present, but the trade war may lead to a decline in investment and consumption, thus expanding the blow to corporate performance and casting a shadow over the real economy.
Apple has just become the first technology company with a market value of more than $1 trillion. However, even apples began to cry out for pain. According to the website of Bloomberg News, Apple submitted a report to the US Securities and Exchange Commission: "Tariffs may increase the cost of the company’s products and make them more expensive, thus reducing the competitiveness of products. Political uncertainty surrounding international trade disputes and protectionist measures may also have a negative impact on consumer confidence."
"Buying American goods" is difficult to achieve, and "hiring Americans" has become "a mirage".
Calvin Dooley, CEO of the American Chemical Council, predicted that a 25% tariff would "have a devastating impact on American chemical manufacturers". Many American companies have warned that if the situation is not alleviated, it may have an impact on the economy and lead to a decrease in jobs.
In the smoke of the trade war, Eric Gasetti, the mayor of Los Angeles, led an emergency delegation to visit Asia. There is a simple reason. According to the website of American Consumer News and Business Channel, with the White House threatening to impose higher tariffs on China goods worth $200 billion, many American port managers are preparing for the possibility of cancellation of shipments and unemployment. The ports of Los Angeles and Long Beach are estimated to provide nearly 1 million jobs for the whole of Southern California.
This is still the beginning. According to the data of the Peterson Institute for International Economics in the United States, if the United States really imposes a 25% tariff on cars around the world, 195,000 American workers will be in the range of 1-mdash; Unemployment within three years, and in the case of other countries taking countermeasures, the situation will be even worse: the United States will lose about 624,000 jobs.
inflation of prices
Can you satisfy the people?
"American consumers have begun to feel the sting of rising costs." CNN reported that.
Erin Ennis, Senior Vice President of u.s.-china business council, said: "About half of the goods from China need to face higher tariffs. The increased cost will be transmitted to American consumers and will affect the wallets of most Americans. " The British Times website reported that.
From Coca-Cola to RV, from toys to clothing, the storm of price increase has been thundering.
CNN reported that Coca-Cola has raised the price of carbonated drinks because the recent 10% tariff on imported aluminum made the production cost of Coca-Cola cans higher. CEO James Quincy admits that the price increase is "destructive" but necessary.
According to the website of The Wall Street Journal, Michael Harpy, CEO of Winnebago Industries, an RV manufacturer, said that due to the recent price increase of some products, the company began to consider raising prices. Although the company did not want to disclose its price increase, it said that in order to cut costs, it had made changes, such as modifying the floor design of the RV.
Toys will soon become the "hardest hit". Among the $200 billion of goods to be exported to the United States, including $12.2 billion of children’s toys. The United States is the world’s largest toy consumption market, while China is the world’s largest toy production base. According to the data provided by Guangdong Toy Association, in 2017, 28.8% of China’s toys were exported to the United States, and 80% of the products in the American toy market were made in China.
Zhou Shijian, a senior researcher at the China-US Relations Research Center in Tsinghua University, said that the $200 billion of Chinese-made consumer goods accounted for too much, and the substitutability was very limited. If the tax is really increased, most consumers in the United States can immediately feel that "as soon as it is announced, the prices of consumer goods in the United States will rise."
The report on the British Science News website quoted Rick Helfenbein, president of the American Federation of Clothing, Footwear and Socks, as saying that Trump imposed tariffs on China products imported from the United States, which led China to impose retaliatory tariffs on goods exported from the United States, which was equivalent to imposing a huge Trump tax on American workers, consumers and the American economy.
Joseph Stiglitz, a Nobel Prize winner and a professor at Columbia University, also believes that Trump’s move to start a full-scale trade war with China will lead to "tax everywhere", and the substantially increased costs will be borne by ordinary people, and the poorest class in the United States will suffer the heaviest blow.
"These punitive tariffs will be passed on to American consumers and offset all the positive achievements made by the American economy in recent months. There is no better example of hurting yourself in order to vent your anger. " Matthew Shea, CEO of the National Retail Federation, said.
Reduce the deficit
Can it make America more prosperous?
Reducing the US trade deficit is one of Trump’s promises, which is also an important reason for the Trump administration to provoke a trade war.
Chen Chenchen, a researcher at Chongyang Financial Research Institute of Renmin University of China and deputy director of the Macro Research Department, pointed out that since Trump took office, he has never given up his deep-rooted policy stance since the 1980s — — By grasping the bottom line of the transaction and shrewd negotiation, we will get back all the jobs, industries, market opportunities and trade benefits that belong to the United States. He wants to replace rules with absolute interests and global considerations with absolute American priority. The "fair trade" that Trump wants to achieve most is the lowest-level trade with the greatest American interests as the core. Compared with the previous US government, it is the "zero-sum experience" in the business world that dominates the trade policy thinking at the core of American power.
However, almost all analysts believe that it is impossible for him to honor this promise.
According to the latest data from the US Department of Commerce, in June, the US trade deficit reached US$ 46.3 billion, a sharp increase of 7.3% over the previous month and the first expansion in four months. Moreover, this deficit data is also the largest data in 19 months. In other words, the current US trade deficit is even higher than when Trump came to power, and it has reached the highest level.
I don’t know if Trump will feel a little embarrassed. However, neither the media nor experts are surprised.
The Washington post website reported that economists thought it was wrong for Trump to focus on reducing the trade deficit. The only way to really reduce the trade deficit is to let Americans buy less. They believe that Americans have not "suffered" in trade: Americans get cheaper goods from abroad, and most of the dollars flowing to other countries return to the United States in the form of foreign investment or the purchase of American bonds. They stressed that the Trump administration’s tax increase on China products is unlikely to reduce the trade deficit, because Americans will still buy all these goods with tax increase, so enterprises may adopt two solutions: one is to buy goods with tax increase, and the other is to buy from other countries.
Kimberly Ann Elliott, a visiting researcher at the Center for Global Development in the United States, pointed out in an article published on the American World Political Review website that Trump did not seem to understand three basic facts about trade policy: first, trade policy could not defeat a wide range of macroeconomic forces; Secondly, the main impact of trade policy is to re-layout the economy; Third, trade policy is far more complicated today than in the past.
Lawrence summers, a professor at Harvard University and former Treasury Secretary, wrote an article for the Financial Times website, which also believed that Trump put offensive trade policy at the core of economic governance, which was problematic. Most economists agree that the adjustment of trade policy is unlikely to play a significant role in promoting employment or GDP growth, and loosening trade can promote the prosperity of the United States more than manipulating trade.
wield a club (at sb)
Can America be great again?
"Let America be great again!" This is Trump’s campaign slogan and Trump’s ultimate goal. However, so far, the various practices of the Trump administration have caused widespread doubts.
"Trump is depriving the United States of what makes it great." The title of Washington post’s article is simple and direct. The article points out that after World War II, the foundation of American prosperity is the scientific and technological breakthrough promoted by a powerful innovation system. The innovation policy of the United States has been successfully imitated in Europe and Asia, and it has also been imitated by China in recent years. Now, Trump has launched a trade war with China, with the purpose of slowing down the rise of China’s science and technology, but in fact, he has gone astray and is doomed to failure. Instead, the United States should do what it does best — — Innovate at home and trade with other countries in the world, so as to keep America prosperous.
Washington post columnist Robert samuelson recently published an article on the website of Japan Times, which also pointed out that Trump’s campaign slogan "Make America Great Again" brought an illusion that we can still achieve prosperity by pursuing isolationism. The United States was once "great", but it was achieved by actively participating in international affairs through military alliances and trade policies.
Once upon a time, the United States was a well-deserved leader of the western world. However, nowadays, the mentality of Western allies towards the United States may only be described as "bitterness".
At the end of July, an international conference against the Trump administration’s trade war was held in Geneva, Switzerland. The participants were all the closest allies of the United States: Japan, South Korea, Canada, Mexico and European Union countries. The reason why these countries are rallying to "resist the United States" is because the investigation on whether imported cars and parts threaten the national security of the United States, which began in May this year, may be completed in August, and the White House is likely to impose a 25% punitive tariff on all imported cars and parts. The German financial network stressed that the message of the Geneva gathering was the EU’s "distrust of Trump’s commitment". German newspaper frankfurter allgemeine zeitung commented that Trump wants to destroy the world order, so what? Countries will unite to protect international organizations and international rules.
Former US Deputy Secretary of State richard armitage wrote in the Japanese Yomiuri Shimbun that Trump publicly claimed to make a deal without showing his cards to others. This technique may be effective in business, but it won’t work in diplomacy. Most foreign relations of the United States have been weakened by Trump’s obvious lack of credibility diplomacy, and allies’ trust in American leadership is declining.
Washington post’s website article bluntly pointed out that Trump values his pride, his demand for attention, and his ability to create disasters — — If he needs to give a heavy blow to the western alliance to convince himself that he is smarter than all his predecessors, then he will not hesitate to do so.
Chen Chenchen, a researcher at Chongyang Financial Research Institute of Renmin University of China and deputy director of the Macro Research Department, pointed out that in Trump’s policy thinking, allies who "take advantage of the United States" are not trustworthy. Only through shrewd foreign policy negotiations, including taxation of allied products, will they "have excellent allies again".
America’s image has been damaged. The article on the website of the Brookings Institution in the United States directly calls the United States "a rogue superpower" and "actively, powerfully and thoroughly seeks its own interests".
Threaten and blackmail
Can America be a winner?
"The trade war is very simple. Winning is easy. " This is Trump’s judgment.
"Trump believes that trade is a ‘ Zero-sum game ’ . He believes in trade wars ‘ It’s easy to win ’ . He launched a trade war against many countries in order to force them to sit at the negotiating table. " Washington post website reported that.
According to this logic, the Trump administration recently played a "combination boxing". The National Defense Budget Act of 2019 just passed by the US Congress directly positions China as a long-term strategic opponent; The Trump administration ordered the US Department of Commerce to put 44 China enterprises and institutions on the export restriction list for technical blockade on the grounds of "significant risks to US national security"; The Trump administration also threatened to impose a 25% import tariff on China’s 200 billion products.
However, not many people believe that the United States can easily win the trade war.
The CNN report quoted Phil Levy, an expert of Chicago Global Affairs Committee, as saying that raising the tax rate on goods from China is consistent with the President’s strategy of continuously putting pressure on China. There seems to be a feeling among members of the Trump administration that as long as you hit China hard enough, China will give in. However, Levy said, "There is no evidence to prove this."
Martin wolf, chief economic commentator of the Financial Times, pointed out that the adoption of "Section 301" by the United States against China sometimes seems to be aimed at forcing China to eliminate its trade surplus with the United States, sometimes seems to be aimed at preventing the "Made in China 2025" plan, and sometimes seems to be aimed at correcting China’s compulsory technology transfer. The first goal is ridiculous, the second goal is not negotiable, and the third goal is difficult to achieve.
The Australian Sydney Morning Herald website article believes that in the economic war between the United States and China, Trump adopted the ancient weapon of the 17th century mercantilist era — — Tariffs, and China took out the weapons of the 21st century — — Renminbi. China’s choice of weapons is more powerful, because China’s investment activities around the world are huge and growing rapidly, which is warmly welcomed by people.
Jeffrey Sachs, an American economics professor, and a group of enlightened American scholars he represents believe that the United States’ efforts to curb the rise of China and the development of science and technology by means of blocking trade wars are "doomed to failure".
The American media believe that the Trump administration may have used Nixon’s "madman theory". It means that opponents are cautious because they suspect that the president of the United States is unpredictable, occasionally reckless and possibly as dangerous as madness. However, the article on Washington post’s website starts with "‘ Madman theory ’ It will not help Trump win the trade war. It is pointed out that it is good for both China and the United States to retreat from the edge of the trade war. However, this requires cooperation rather than conflict between the two sides. The self-righteous "madman theory" needs to give way to a calmer head.
Our reporter Zhang Hong
