China Center for International Economic Exchanges

Wei Jianguo: Fighting Back Trump Administration with Precise and Quick Actions
Date:Mar 27,2018    Source:CCIEE

After the U.S. government suddenly announced that it intends to levy tariffs on $50 billion of imported Chinese goods, China has made it clear that it will surely take any necessary measures to fight back. From the standpoint of the trade war and the prospects of long-term economic and trade cooperation between China and the United States, I believe that this time China should fight in the end and teach Trump administration a good lesson.

The Trump administration has turned the world trade market into a boxing ring and other “boxers” have now been defeated, leaving only China to stay in the ring. It should be noted that although the fists of the United States waving to China are fierce and full of momentum, it never really hit China. The main reason is that the “coaching team” of Trump are full of people like Navarro, Lighthizer and Ross, who did not have any experience in administrative and foreign affairs, not to mention international economic and trade exchanges. These so-called “hawks” can only be armchair strategists, however, Trump appreciates and relies on these people very much.

We must see that the “boxing match” did not receive much domestic support in the United States due to the following three main reasons:

First, more and more American companies worry about the current situation. The American Chamber of Commerce, the Employers’ Association, and the Consumer Association believe that many people voted for him because they expect Trump to raise wages and improve their lives, but now Trump has already blown out such kind of hope. Trump is moving in the opposite direction of what he hopes for, giving away the opportunities to other potential competitors.

Second, Trump has brought disruptive changes to all the work he has done in the past, especially the benefits of tax cuts to the U.S. economy. Navarro and Lighthizer believe that the trade war has no impact on the U.S. economy. In fact, according to international experts, the trade war will reduce the effect of Trump’s tax reduction by about 50%, and be more of a hindrance than a help in achieving its goal of making the United States great again.

The unprecedented responses taken by China also surprised the Trump administration. Previously, the Trump administration thought that they could easily scare China but as a matter of fact, China showed great resilience and even the US companies and chamber of commerce also strongly oppose the trade war. As for many of the American people, they worry about that the tariffs will reduce their living standard gradually. The right choice for the Trump administration is to stop from making the wrong decisions, take China’s suggestions into consideration, resume all the negotiation channels to avoid any further conflicts. Otherwise, all the efforts Trump has made since his inauguration will go to waste, and he is bound to experience a setback in the mid-term election.  

Thirdly, the entire international market worries that the U.S.-China trade war will make everyone suffer. Once the trade war begins, China’s exports will be blocked and its import of raw materials will be reduced, which will affect exports of many countries including the European Union, Australia, Canada, and South Korea. The ASEAN is paying close attention to the development of the trade war, and is highly concerned with the outcome of the trade war.

Trump has become a boxer who only listens to his coaching staff, throws away all the rules, rushes forward, and disregards the outcome. We must teach him a lesson so that he will not continue to make more wrong decisions. The list of goods will be released in 15 days and two months later, the Trump administration will launch the restrictions on exporting high-tech products to China, we should make sure that Trump administration will listen to China’s voice carefully.

How to teach Trump a lesson? I think that we can take three actions. First, China must strike an uppercut this time, that means we should aim at the core interests of the Trump administration, and take fast and effective measures. Second, China should fight the promises made by Trump to improve employment and agriculture, including agricultural products in Iowa and Indiana; Boeing Aircraft, General Motors, Qualcomm Software and other big companies that mainly support Republican. Third, China will fight back by improving its openness and the protection of intellectual property rights as well as creating the world’s best business environment. This year, China will put more efforts than ever to its reform and opening up so that the Trump administration will not be able to find any excuse accusing China, which will allow China and other companies to recognize the true face of the United States.

 

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