US-China Trade: Trump puts a Knife to Beijing's Throat

US-China Trade: Trump puts a Knife to Beijing's Throat

China has long insisted that it won't negotiate a new trade pact with the US with "a knife at its throat." Over the weekend, US President Donald Trump flipped open the switchblade.

In a series of tweets, he blasted Beijing for taking advantage of the US economy, and threatened to sharply increase tariffs on everything China exports to the United States.

Coming just days before China's top negotiator was expected in Washington for a crucial – and perhaps final – round of trade talks, the tweets threw global financial markets into turmoil for several hours as investors worried that the world's two largest economies might fail to reach a deal for the foreseeable future.


What's the background?

For months, the US and China have been negotiating a trade agreement. Washington wants Beijing to make it easier for American firms to do business in China, cut back on government support for Chinese tech firms, stop stealing US technology, and buy more American agricultural goods.

Beijing sees these demands as part of an American attempt to stop China's rise as a global power. So while China has been willing to make life easier for US firms, it's less enthusiastic about cutting subsidies for Chinese companies or boosting purchases of US goods.

As a negotiating tactic, the Trump administration earlier this year slapped a 10 percent tariff on $200 billion worth of Chinese goods, and it has threatened to raise that to 25 percent if China doesn't meet US demands. Trump, unhappy with the pace of progress in negotiations, now says that will happen on Friday.

What's more, he's poised to put a 25 percent tariff on the remaining $325 billion of Chinese exports to the US, and "soon." That would mean higher prices for US consumers on virtually all Chinese goods bought in the United States – furniture, clothes, cars, electronics, you name it.

Why is this happening?

It's probably a combination of these three factors.

It's Trump's style: Making extreme demands and then stepping magnanimously back toward compromise is a long-established Trump negotiating tactic, particularly on trade. With a critical round of negotiations coming up, Trump now wants maximum leverage.

It's Trump's advisers: Hardliners on China within the Trump administration – in particular chief trade negotiator Robert Lighthizer – may have Trump's ear now. Some reports say Trump's tweet storm followed Lighthizer's complaints that China is reluctant to codify the terms of any new US-China deal into law. This – along with the question of how to ensure China actually complies with any new agreements – has long been a sticking point in talks.

It's the economy: Recent data say the US economy is rocking – "killing it" even. This gives the president more room to turn the screws on the US' largest trading partner without worrying about adverse effects, at least in the short term.

What happens next?

Neither side wants to lose face. Barring a massive concession from Beijing – or a dramatically gracious climbdown by Trump out of deference to his "good friend" Xi Jinping – Friday will mark a significant escalation in the trade war between the world's two largest economies, one that could last into the 2020 US presidential election and beyond.

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The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.

In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.

The fight between EU institutions and Poland and Hungary has escalated.

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Watch this episode of GZERO World with Ian Bremmer: Is a robot coming for your job? Kai-fu Lee explains AI

US elections officials have always persuaded losing candidates that they've, ahem, lost. Now it's worse because there's a new paradigm, according to former DHS and Election Assistance Commission official Matt Masterson, policy fellow with the Stanford Internet Observatory. Candidates that won't accept defeat regardless of the margin or evidence of fraud, he says, are undermining trust in the system — and election officials are ill-equipped to deal with this problem.

Matt Masterson made these remarks during a live Global Stage event, Infodemic: defending democracy from disinformation. Watch the full event here: https://www.gzeromedia.com/global-stage/virtual-events/disinformation-is-a-big-problem-what-can-we-do-about-it

Who's most responsible for spreading misinformation online? For Ginny Badanes, senior director for Democracy Forward at Microsoft, the problem starts with those who create it, yet ultimately governments, companies and individuals all share the burden. And she's more interested in what we can do to respond.

Ginny Badanes spoke at a live Global Stage event, Infodemic: defending democracy from disinformation. Watch the full event here: https://www.gzeromedia.com/global-stage/virtual-events/disinformation-is-a-big-problem-what-can-we-do-about-it

Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. In this video, watch Ian Bremmer's conversation with Lebanese journalist and author Kim Ghattas on GZW talking about the future of Lebanese politics and sectarianism in the county after the after the blast. It was originally published on August 19, 2020.

In Lebanon, "a majority (are) united in wanting a different future, a future that is non-sectarian, that is non-corrupt, that provides prosperity, justice, dignity for people," journalist Kim Ghattas told Ian Bremmer on GZERO World.

In this interview, Ghattas discusses the opportunity that could arise from the tragedy of the Beirut explosion which killed 200 and injured thousands more. The Lebanese are "fed up" with the militant group Hezbollah, she tells Bremmer, and want to strive for a government that better resembles the diversity and cosmopolitan nature of its citizens.

Watch the GZERO World episode: Lebanon Post-Blast: Rage in the Streets of Beirut.

Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. Below is our original piece on the Beirut port explosions published on August 5, 2020.


The twin explosions at Beirut's port on Tuesday were so powerful that the aftershocks reverberated as far as the Eastern Mediterranean island of Cyprus, 150 miles away. The specter of fire and smoke was such that many suggested on social media that Beirut had experienced a nuclear blast.

In the days ahead, more details will come to light about why a deadly cache of materials was haphazardly stashed at a port warehouse, and why Lebanon's government failed to secure the site. So, what comes next for crisis-ridden Lebanon?

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

What does it actually mean to cut $1 trillion from the Democrats' $3.5 trillion social spending bill?

President Biden has proposed one of the most ambitious expansions of federal spending in recent memory. If he gets everything he wants, it would probably be the largest expansion of government since the Great Society, but he's not going to get everything he wants. Democrats have basically said they cannot do all $3.5 trillion in spending. They're probably going to end up around $2 trillion. So what gets cut? Well, we don't know yet. There's kind of two ways to go about this. They could either cut the number of programs that have been proposed, doing fewer things with more money on a permanent basis, or they could try to do more things, each program getting less money and potentially doing them on a temporary basis. So, a future Congress would have to extend it. What does this mean for you? Well, a lot of the money in here is designed to go directly to families, either in the form of cash payments, through the tax code, the Child Tax Credit and the Earned Income Tax Credit, or subsidies for things like child care, early childhood education, and community college. And if you cut these things back, it means less money is going to go out the door to the American people. It also means less tax increases to finance it. So the implications of what's being proposed could actually end up being a big deal for a lot of Americans who would qualify for benefits under these new programs.

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