Trade War Is Only Part of the US Deterrence Strategy

China, even as it caused growing dissatisfaction in Washington with its rapid growth, was important for America as a source of cheap and high-quality products that helped maintain the well-being of its population (in 2015 every American family saved $750 because of inexpensive Chinese products) and soften the global financial crisis. The $1.2 trillion, which China has amassed in the US treasury, keeps the dollar empire afloat and stabilizes the world financial system.

Anyway, Trump was still unhappy. To make America great again, he asked China to increase imports from the US and open wider financial and insurance markets for foreign companies. Beijing made reasonable compromises, offering beneficial deals for the US and contracts hundreds of billions of dollars worth.

But Trump became more furious. He announced the introduction of sanctions against Chinese exports, first for $50 billion, now for $200 billion.

Moreover, China was ordered not to take retaliatory measures, or there will be prohibitive duties on all of its exports!

Terrible, insolent. Trump, as we say in China, “is a drinker himself, but hammers other people for drunkenness.”

The answer from China was not long in coming. The PRC government’s statement proclaims the following: “China is forced to take countermeasures synchronously.” So, you forced us to respond in the name of protecting China’s legitimate rights and the global free trade order.

“This adds new uncertainties for further bilateral consultations.” Negotiating with such a changeable guy as Trump does not make sense.

“China hopes for convincing measures from the US to correct the situation.”

Hence, there will be no talks before that.

On September 18, the Chinese Government’s Customs Committee announced that on September 24 from 12:00 (Beijing time) it would impose ten or five percent duties on US exports $60 billion worth.

China does not want a trade war with the US, because it is like a sword of two edges, it harms both sides, but China is not afraid.

Under the worst circumstances, when the US will impose prohibitive duties on all Chinese exports, this will at most reduce China’s GDP growth by 0.7%. And victims of the trade war, the American voters themselves, will punish Trump in the November midterm elections.

But we need to be ready for more.

The sanctions for $50 billion, which have already been imposed, the new package for $200 billion on September 24, and even the prospect of imposing prohibitive duties on all Chinese exports are clearly not the full scenario of the anti-China strategy.

It is a multilateral, hybrid war, where trade and economic measures are only part of the arsenal. There are already attempts to influence China’s domestic policy, to weaken the position of the Communist Party.

However, our American partner must be confident that no country should expect China to trade its key interests, no one can have the slightest hope that we will taste bitter fruits of infringement of sovereignty, security and interests of the state.

As for the China-Russia relations, America’s announcement that Moscow and Beijing are its strategic rivals only brings us closer. As the Russians say, behind bad luck comes good luck.

China will invest to the Russian agriculture at the expense of the US treasuries in order to import more quality Russian products; to the joint design and production of wide-body planes instead of Boeing; to the development of the Russian Far East and the adjacent Northeast of China. And recently poor but now well-to-do Chinese tourists will willingly visit the beautiful Russia, which is close to our hearts.

Well, China and Russia will become even closer to each other, they will stay back to back to repel common challenges, and hand in hand for the development of their economies.

So we need to say loudly: Thank you, Trump, for our happy future!

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.