John Sudworth
Senior correspondent in North America
Watch: prices in China “not good” for the economy – American buyers
Suddenly, Donald Trump’s trade war is in a much clearer concentration.
Rather than a fight on all fronts against the world, it is now very similar to a fight in familiar Trumpian territory: America against China.
The 90 -day break on higher prices of “reprisals” taken from dozens of countries always leaves a universal rate of 10% in place.
But China – which sends everything, from iPhones to children’s toys and represents about 14% of all American imports – has been distinguished for much more severe treatment with an attractive rate of 125%.
Trump said that the increase was due to Beijing’s desire to retaliate with his own 84% sample on American goods, a move that the president described as showing a “lack of respect”.
But for a politician who first fought his way to the White House at the back of an anti-china message, there are much more than simple reprisals.
For Trump, this is the unfinished company of this first mandate.
“We did not have time to do the right thing, which we are doing now,” he told journalists.
The objective is nothing less than the overthrow of an established global trade system centered on China as a world of the world, as well as the formerly widespread opinion that supported it – the idea that more of this trade was, in itself, a good thing.
Reuters
China now produces 60% of world electric cars – a large part of them manufactured by its own local brands
To understand how central it is for the thought of the American president, you must return to the time before anyone who considered him as a possible candidate for the office, not to mention a probable winner.
In 2012, when I pointed out for the first time in Shanghai – China’s commercial capital – an increase in trade with the country was seen by almost everyone – global business leaders, Chinese officials, visit to foreign governments and commercial delegations, foreign correspondents and economists – as obvious.
This stimulated global growth, providing an infinite offer of cheap products, enriching the Chinese army with new factory workers increasingly anchored in global supply chains and offering lucrative opportunities to multinational companies selling their goods to its newly struck middle classes.
In a few years after my arrival, China had passed the United States to become the world’s largest market for Rolls Royce, General Motors and Volkswagen.
There was also a deeper justification.
While China was enriched, so the theory went, the Chinese would begin to demand a political reform.
Their expenditure habits would also help China move to a consumer society.
But the first of these aspirations has never occurred, the Communist Party leading China only tightens its grip on power.
And the second did not occur quickly enough, China not only dependent on exports, but openly providing for becoming more and more dominant.
Its infamous policy plan – published in 2015 and entitled Made in China 2025 – has set out a huge vision supported by the State to become a world leader in a certain number of key manufacturing sectors, from aerospace to the construction of the ship, including electric vehicles.
And it was therefore that a year later, a complete political unknown began a foreigner president for the American president, doing the case several times on the campaign trail that the rise of China had dug the American economy, causing the decline of the rust belt and cost the blue collars their livelihoods and their dignity.
Trump’s first -term trade war broke the mold and broke the consensus. His successor, President Joe Biden, maintained a large part of his prices on China in place.
And yet, even if they undoubtedly caused China pain, they did not do much to change the economic model.
China now produces 60% of global electric cars – a large part of them manufactured by its own local brands – and 80% of the batteries that feed them.
So, now Trump is back, with this climbing of Tit-For-Tat on the samples.
It would undoubtedly be the biggest shock ever delivered to the global trading system established, if it is not for all other tariff measures out of all that the American president has deployed in recent days.
Watch: why the American markets skyrocket after break from Trump prices
What is happening then depends on two key questions.
First, if China consults this offer to negotiate.
And secondly, assuming that this is ultimately the case, if China is willing to make the type of major concessions that America research, including a complete overhaul of its export economic model.
By answering them, the first thing to say is that we are in a completely undeniable territory, so we must be wary of anyone who says they know how Beijing is likely to react.
But there are certainly reasons to be careful.
The vision of China of its economic strength – a base of strong exports and a closely protected internal market – is now closely linked to its idea of national rejuvenation and supremacy of its single party system.
Its close control over the information sphere means that it will not be likely to lower its obstacles to American technological societies, for example.
But there is a third question, and it is an answer to America.
Do the United States still believe in free trade? Donald Trump often suggests that prices are a good thing, not only as a way to reach an end, but as an end in itself.
He talks about the advantage of a protectionist obstacle for America, in order to stimulate domestic investment, to encourage American companies to bring these foreign supply chains and to increase tax revenue.
And if Beijing thinks that this is indeed the main objective of the prices, it can decide that there is nothing to negotiate anyway.
Rather than defending the idea of economic cooperation, the two largest superpowers in the world can find themselves locked in a struggle for the economic supremacy of the winners.
If this is the case, it would really mark an upheaval of the old consensus, and a very different future, perhaps very dangerous.
Watch: Trump says he would plan to meet Xi Jinping in China on prices
