The U.S.-China trade war isn’t actually about soybeans and steel. Washington fears its iron grip over the post-Soviet world is waning thanks to China’s new global initiatives.
By Kei Pritsker and Sheng Zhang
February 04, 2019 "Information Clearing House" - Meng Wanzhou, the Chief Financial Officer of Chinese telecommunications titan Huawei, appeared in Canadian court on Tuesday to fight her extradition to the United States. If she is extradited, she will face fresh charges issued by the U.S. Justice Department (DoJ) accusing Meng and Huawei of engaging in bank fraud and trade theft, as well as violating U.S. sanctions against Iran. The DoJ’s indictments come just two days before scheduled talks between the U.S. and China to negotiate an end to the Trump Administration’s multi-billion-dollar trade war. These new accusations, which Meng and Huawei flatly deny, will undoubtedly strain trade talks and U.S.-China relations.
Just a year ago, Huawei was scarcely an issue on Americans’ minds; Americans happily bought goods with the familiar “Made In China” mark. Huawei and China’s alleged wrongdoings were thrust forward into the public discourse when U.S. President Donald Trump announced a 30 percent tariff on solar panel imports (China being the U.S.’s biggest source of imported solar panels), launching what we now know as the U.S.-China trade war. What followed was intense scrutiny of all things Chinese, including products like Huawei phones and telecommunications hardware.
Since the beginning of his presidential campaign, Trump has railed against the U.S. trade deficit with China. He claimed China was “ripping off” the United States and tariffs were the only thing that would make China trade fairly. The deficit since the U.S. and China began trading is nearing $420 billion. This is no small number but, when compared with American student loan debt nearing $1.6 trillion and credit card debt over $1.05 trillion, the China trade deficit becomes less significant. Furthermore, most economists agree that trade deficit aren’t inherently good or bad. While Chinese companies saw an increase in sales, many don’t see the benefits U.S. consumers see in the form of lower prices.
Is Trump actually waging a trade war to protect American consumers from unfair trade practices? If Trump cared about struggling people in this country, he would not have backed the 2017 tax cut plan that eliminates the federal estate tax and the alternative minimum tax, which are only paid by the super rich. Is Trump a deficit hawk trying to limit waste and excess spending wherever possible, including trade? No, Trump reversed the course of the budget deficit since assuming office, taking it to six-year highs. Trump’s cabinet is one of the wealthiest in recent memory, filled with plutocrats hailing from Goldman Sachs, private equity firms, and good old inheritance wealth, leaving no doubt the interests of average Americans will go unrepresented.
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