Trump's Deja Vu China Trade War. (1st October 2018)

• Record Type: Journal Article
• Authors: Rasmus, Jack
• Is Part Of: World review of political economy. Volume 9:Number 3(2018)
• Page Start: 346
• Page End: 363
• Publication Date: 2018-10-01
• Subjects: China -- United States -- technology transfer -- Plaza Accord -- Bretton Woods -- economic nationalism; Economics -- Political aspects -- Periodicals; Economic development -- Periodicals; Economic policy -- Periodicals; Economic development; Economic policy; Economics -- Political aspects; Periodicals; 330.05
• DOI: 10.13169/worlrevipoliecon.9.3.0346
• Languages: English
• ISSNs: 2042-8928

Abstract

Abstract : The Trump administration is pursuing a "dual track" trade offensive. Track One, announced with US steel-aluminum tariffs, seeks token adjustments to preexisting trade terms with allies in NAFTA (North American Free Trade Agreement), Europe, South Korea, and other US bilateral free trade agreements. The recent South Korea-US negotiations represent the soft template. In Track Two, Trump is pursuing a hard line with China. US objectives are threefold: limit technology transfer to China, obtain more access to China markets for US business, and reduce the US current account deficit with China. US elites are internally split, however, on which objective should be given priority: the US defense establishment prioritizes the first, US multinational corporations and trade groups the second, while Trump seeks the third as means to mobilize his domestic political base with evidence that his "economic nationalist" policies are producing results. China's counter to Trump is a "carrot & stick" response offering concessions to the second and third US objectives, while holding firm on the first. The US-China trade dispute should be viewed as a weak US attempt to reproduce Reagan's 1985 Plaza Accord targeting Japan, and Nixon's 1971 abandonment of the Bretton Woods dollar-gold peg standard, targeting Europe. Trump's offense will prove less successful, however. The author predicts a US-China full blown trade war will be averted, as Trump and US capitalists settle for gains in objectives two and three, while denying China acquisitions of US corporations.