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Will Trump’s Economics Push China And America Into A Trade War?

Posted by Gulshan Jha in GlobeScope, Politics
February 1, 2017

America has elected its new president in the form of Donald Trump. After becoming the 45th president of the United States, Trump is widely being discussed for all good or bad reasons. The oval’s decision of restricting immigration from seven Muslim countries is receiving criticism across the globe. Nonetheless, for now, all other nations are acting as watchdogs and speculations over his policies are rife. It is very crucial for them to be observers as his future decisions are unveiled.

Mr Trump has said that the United States is not compelled to follow ‘one china‘ policy, which received a belittling response from Chinese Foreign Ministry spokesman Lu Kang. Kang asserted that the policy is non-negotiable. Trump’s appointed team of advisors happen to have been critics of China’s economic and trade practices. Peter Navarro, famous for his works such as “Coming China War” (2005) and “Death by China” (2011), as well as his anti-China remarks, has got the post of Chairman at the National Trade Council. Business tycoon Dan Dimicco (former C.E.O of Nucor, America’s largest steel company) has been appointed as Trump’s Trade Advisor. And the CEO of Exxon Mobil, Rex Tillerson, has been signed up as the Secretary of State.

All of these trade warriors have been highly critical of China, and U.S. trade policies with China. Trump has already accused China of stealing millions of jobs and closing down factories in America. He has also declared that his government will break away from the Trans-Pacific Partnership (T.P.P.) which had given the U.S. hold over 40% of the world’s trade. In the absence of T.P.P., there are possibilities of its members giving space to China to reach their markets. China offering cheaper goods, as well as low tariffs, would endure these countries. Xi Jinping, the Chinese President, expressed his views in the recently concluded World Economic Forum annual meeting, insisting on China’s ability to lead world trade.

China’s trade policies are quite different from the US. Its trade policies are based on economic interest. ‘One Belt One Road’ and ‘China-Pak Economic Corridor’ are two segments of the Chinese multi-dimensional, ambitious project in which China has made an investment of  one trillion and 46 billion$ respectively. These investments clearly depict China’s decision of boosting its infrastructure and making strides into Europe and Gulf Countries. China is doing well on its side; but on the other hand, America is planning to build a wall at its Mexican border costing around 15-25 billion $. From T.P.P. to the Mexico wall, these policies wouldn’t promise any return to America.

The least we can hope is that the two superpowers wouldn’t engage in a trade war, or else that would make the world economy fragile. The world is already facing complications of BREXIT and the Middle East crisis. A trade war will only bring fragility, destruction, and recession into the world economy.