Trump’s trade war “backlash”

“SMARTING” from his new “trade deal” with Mexico wherein in exchange for not imposing huge tariffs on Mexican goods entering the US, Mexico agrees to deal more harshly, err, more effectively, with illegal immigrants, US strongman, oops, president, Donald Trump, said, “a trade war is easy to win.”

But whether such braggadocio would be enough to scare off China into also agreeing to a trade deal with the US after their own talks bogged down last month is another matter.

After last month’s talks with China collapsed, the US must have been infuriated that instead of bowing down, China instead engaged the US in a “tit-for-tat,” also imposing huge tariffs on a list of US goods entering the Chinese market, right after Trump announced a 25 percent tariff on an initial list of Chinese goods worth US$250 billion.

Such “boldness” on the part of China must have rankled a lot of racist nerves in Washington, considering that even in this late age, when China has already emerged as the new global superpower, the US “Establishment” (and those in the West too), continues to view China as an “inferior race” that should content itself into providing “coolie labor” to Western Capitalism.

And gripped by his “ultranationalism” under his ‘América First’ slogan, Trump, the wise businessman that he is, failed to recognise that in this interconnected world (global supply chain), a trade war would hurt “both ways.” Meaning, if he intends to “punish” the Chinese, he is also at the same time making life miserable to his fellow Americans.

Let’s take the case of Huawei, China’s flagship and gargantuan private technology company with sales of $ 105-Billion in 2018.

The US. started its offensive against Huawei in December 2018 and the US upped the ante further when it “blacklisted” Huawei, effectively banning it from getting access to US technology such, as microchips and operating systems (OS), of which the most familiar is that of Google.

But what do you know, dear readers.

Only recently, Trump’s own budget director,  Russel T. Vought, formally requested that the ban on Huwaei be put on hold, not just for a couple of weeks, but for up to four years!

According to an Associated Press (AP) report, it turns out that Huwaei is the preferred choice of “Rural America” because of its low cost, ahahay! And if the US does not delay its ban on Huwaei, the cost of “retooling” the US communication infrastructure would be enormous, with the cost to be shouldered by US farmers— who are already reeling from the adverse impact of the trade talks impasse between their government and China (and which Trump hopes to ease by saying he would throw them some $15 billion in “farm subisidy,” which, take note, dear readers, is also a violation of the GATT-WTO rules).

Ditto, we now know that Google has also sought an exemption from the Huwaei ban, saying this would definitely “hurt” its global smartphone (android) monopoly.

Of course, it is always a “feel good” situation to always wrap your body with the flag of patriotism but heck, this is business. And Google must have also realised that by blacklisting Huwaei, its days of global dominance would soon be receding— especially with Huwaei announcing that rather than also losing heart, it is instead pursuing the development of its own operating system— totally free from western control.

Indeed, from reports filtering out from the talks between Google and the US government, we get to learn that a Huawei ban is “bad for the company’s technology business.”

“Google also fears that the export ban would create a competitor to the US-made Operating Systems (OS), which would hurt the search engine giant’s Android monopoly,” a report said.

The report also added: “Since Chinese manufacturers are still global smartphone distributors, they all build Google-approved Android OSes for the non-Chinese market.

“After the Google testing process, the OS splits into two versions— internationally, it gets the...

...Google Apps; in China, it gets a Beijing-centric app selection.

“The search engine giant says its control over the Android ecosystem means there is still some level of security and updatability going into these devices which would be lost if the trade relations are not mended.”

And as if these internal woes are not enough, the hard fact is that despite the escalating trade war between the world’s two largest economies, the AP again reported last June 10, that China even experienced a surge in export last May, when the Trump’s “punitive tariffs” on China goods took effect (China’s trade surplus soars, as exports unexpectedly edge up).

“China’s monthly trade surplus jumped 78% to $41.7 billion, as exports rose 1.1 percent to $213.8 billion and imports fell 8.5 percent to $172.2 billion, the Chinese customs agency said Monday” (June 10, 2019).

“The fall in imports reflects weak domestic demand, analysts said. The rise in exports came despite a worsening trade war with the United States in which both countries have raised tariffs on each other’s products.”

Now, with China’s own imports down by $172.2 billion last month, guess whose economy (manufacturers, traders, shippers, etc., etc.) got the brunt of that decline dear readers?