Trump’s trade war against China is backfiring, says financial analyst Sara Hsu at the China Focus. While ideologically the trade war makes sense, US consumers and companies pay a high price, she says.
The problem is that the world is so globalized at present that hurting Chinese interests also harms US interests. Trump’s imposition of tariffs on American consumers and producers, including multinationals producing in China, has resulted in rising costs and economic losses. At present, the world is waiting to find out whether the trade war will escalate or whether tensions will die down. If the Trump administration doubles down on Chinese tariffs, unemployment in the US will rise and economic woes for both nations will set in.
Trump’s nationalist ideology might have felt like a necessary antidote to fighting the unseen adversaries of globalization. For a man who sees the world in black and white, and for Americans tired of losing jobs to their cheaper Chinese counterparts, making China the primary enemy of the US is a winning strategy. However, this approach is already backfiring, creating costs in the US and abroad.
What Trump has gotten wrong is that while China is most definitely a rival of the US, it is not a foe. It’s dangerous to position other nations as antagonists, because this opens the door for hostilities to grow. While Obama’s approach to China was far more subtle, it did less harm to the global economy and preserved a key partnership between the two nations. Going forward, it will be challenging to restore this critical connection while also maintaining a healthy rivalry. In all likelihood, even after the political tides have changed, nothing the US will do to check China’s global ambition will be looked upon benignly. The most important bilateral relationship in the world has become a game of brinksmanship, under reactionary strongman politics. So much for globalization.
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