Trump goes ahead with plan to undo globalization; targets China and EU

The American President Donald Trump delivered a speech about US-China economic relations. He said he aims at stopping “China’s predatory attacks on America’s innovation base”. To this effect he is “instituting a program of tariffs and is considering investment restrictions and strengthened export controls”. Surely, the White House works for a world without free trade. (Snapshot from a White House video, June 25, 2018).

Harley-Davidson motor cycles is the first American iconic company to suffer in more than one way from Trump’s action aimed at reversing the world economic order. It’s a matter of fact by now that the ‘America first’ President seems decided to overturn globalization.

In doing so, apart from causing global disorder, he will embarrass a large part of the American productive machine, while favoring another. Trump’s import tariffs on steel and aluminum have raised the prices of both metals at home, and for one thing have hiked the production costs of motorcycles.

Tariffs, tariffs, tariffs…

At the same time, European Union’s retaliation in response to Trump’s tariffs, punished the imports of US bikes in Europe with extra levies. Overall, the prices of Harley-Davidson in the EU have to be increased by around 30%.

To avoid that, the company plans to shift production outside the US, to evade the European tariffs of 25% and find supplies of cheaper steel and aluminum. Obviously, the White House doesn’t mind the problems of Harley-Davidson as long as the American steel and aluminum producers are happy.

New round of tariffs

Now, Trump threatens Europeans with a second round of import tariff hikes, this time on cars assembled in Europe and sold in the US. While trade over the Atlantic Ocean sails in rough seas, it’s even worse in the usually calm Pacific Ocean. The US started the Pacific trade war by punishing with super import levies Chinese steel and aluminum. Beijing responded quite moderately with extra imports levies on US products worth just $3bn. Yet, Washington answered with tariffs on Chinese goods of a value of $50bn.

Trump won’t let the exchange to end there though. He plans a terrifying new round of tariffs hikes on Chinese products of a value of no less than $450bn. To be noted, the United States last year imported from China goods of a total value of $506bn. If the White House realizes its threats the US will punish almost all imports from China. The first tranche of import levies will be imposed next month on Chinese goods worth $34bn.

Beijing’s response

In view of that, Beijing left it to be understood that its new reaction to the American aggression won’t be moderate and will not contain only extra tariffs, but other non-tariff trade barriers too. According to Wall Street Journal report Xi Jinping, the Chinese President “told a group of 20 mostly American and European multinational chief executives on Thursday that Beijing plans to strike back”.

According to the same source, this time the Chinese action will be “with a bare-knuckle approach”. This means the US products will face not only increased tariffs, but also non-tariff barriers related to regulative rules and controls. This last threat may create much more important problems to US exports to China, surpassing trade issues and touching the financial and banking sectors.

Furious Xi

If the Chinese response will be as harsh as Xi said, it may constitute a landmark towards an overturn of globalization. It depends on Beijing’s calculations about the cost of losing some good parts of the US markets and relying more on home and Asian demand for growth. This is also more or less the case for transatlantic trade. In reality, all the major trading powers of the world are currently reflecting about their position in a totally different landscape of international trade.

Trump, though, is not only aiming at destroying what is left of globalization. He wants to force American capitalism to stop producing in low labor cost countries and then selling to the US to make huge profits. In this policy line, he mounted an aggressive response to Harley-Davidson’s plan to move production outside the US. In a tweet, the US President reprimanded the motorbike maker and threatened it with more taxes, if they move production outside the US.

Targeting Harley-Davidson

He said “A Harley-Davidson should never be built in another country-never! Their employees and customers are already very angry at them…If they move, watch, it will be the beginning of the end – they surrendered, they quit! The Aura will be gone and they will be taxed like never before!” It’s not clear what kind of taxation he has in mind. At this point it must be reminded that this is not the first time Trump attacks a major American company, for not acting in line with the ‘interests of the nation’. He has repeatedly assaulted Amazon for allegedly making super profits on a cooperation agreement with the US Posts.

This is the first time an American president is loudly reprimanding prime US business names, shining stars of the capitalist system. In the same line of thinking, the White House aims at practically jamming all imports from China, while a large part of which is produced there by US firms. This arrangement has so far secured huge profits to giant or even medium and small US business; producing in low cost China and selling the products in the US at American prices while paying just nominal tariffs.

Exiting globalization

This is what Trump now wants to change, and it’s a major, dangerous and possibly calamitous transformation of the global economic system. There is strong opposition to that also within the US politico-economic constellation. The powerful, super rich, extreme right-wing and Tea Parties supporters Koch Brothers are already spending millions fighting Trump’s trade wars with negative advertisement.

The ‘America first’ President though has made sure he has secured the support of other powerful centers. His catastrophic Middle East policy, where he ostracized Iran and moved the US embassy to Eastern Jerusalem is certainly designed to make good and very close friends in Tel Aviv and Riyadh. Both those cities have a strong leverage in the American politico-economic universe. In this direction, the White House went as far as to threaten Iran with a military invasion – as the US did in Iraq and Libya with catastrophic results- if Tehran doesn’t ‘comply’ with the American dictums.

If one puts all that together the overall picture speaks of a different world in the making, much more dangerous and full of incompatible ‘nationalisms’. Of course, America is supposed to prevail, but whoever the winner of the process is, will be belligerent and destructive for hundreds of millions of people.

 

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Iraq: UN human rights report voices concern over conduct of ISIL fighter trials

Teamgum @ TheNextWeb 2014

Statement by the Brexit Steering Group on UK paper on EU citizens in the UK

Libya: ‘Substantial civilian casualties’ in Derna, UN humanitarian chief ‘deeply concerned’

Eurozone: Sovereign debt decreases for the first time since 2007

First-ever global conference of national counter-terrorism chiefs will strengthen cooperation, build ‘resilient’ States, says top UN official

EU announces record €550 million contribution to save 16 million lives from AIDS, tuberculosis and malaria

Why people with disabilities are your company’s untapped resource

Paris is building the world’s greenest business district. What can other cities learn from it?

Employment MEPs reach consensus with Commission on workers’ health and safety

Why the evolution of blockchain reliability is critical to protecting your digital assets

EU-US: A new transatlantic agenda for global change

Yemen war: UN chief urges good faith as ‘milestone’ talks get underway in Sweden

EU: 13 major banks may pay fines 10% of worldwide turnover

Australia’s record heatwave: From fainting tennis players to dead fish

Refugee crisis: Commission proposes a new plan urging EU countries to help Italy

THE COMMITTEES: From the colonies to the space race – past, present, future converge in Fourth Committee

MWC 2016 LIVE: The top 5 themes of this year’s Mobile World Congress

Multilateralism: The only path to address the world’s troubles, signals Guterres

A Sting Exclusive: “eHealth can change many dimensions of how the healthcare area functions”, Polish MEP Michal Boni underscores from Brussels

This man is turning cities into giant sponges to save lives

Italian voters put again the European Peoples in the Brussels picture

COVID-19: How multilateral development banks can lead through a crisis

GSMA Outlines New Developments For MWC19 Shanghai

“They are trying to make improvements, but of course they are quite slow for my generation”, Vice President of JADE Victor Soto on another Sting Exclusive

5 ways the WTO can make investment easier and boost sustainable development

Baku forum to push back against ‘rise of hate’ with strong call for cultural and religious tolerance, says UN official

Rich economies not a promise of education equality, new report finds

This Brooklyn farm company is training a new generation of urban farmers

Women in Iceland have walked out of work to dispute the gender pay gap

Monday’s Daily Brief: drug-resistant diseases, Venezuelan refugees, fighting in Tripoli, and hate speech

Will satellites destroy our view of space?

China is winning the electric vehicle race

Is poverty and exclusion the necessary price for EU’s recovery?

Coronavirus: Commission stands ready to continue supporting EU’s agri-food sector

MEPs back plans to boost joint assessment of medicines

Draghi: A bridge from Brussels to Berlin

Who’s promised net-zero, and who looks likely to get there?

State aid: Commission approves €199.45 million Italian support to compensate Alitalia for damages suffered due to coronavirus outbreak

Polish PM chooses to focus on economy, amid questions on rule of law in Poland

Healthcare workers’ safety: a forgotten necessity

IFMSA and IPSF on the Health of Migrants and Refugees

UN, Somali Government seek $80 million in immediate relief for flood-affected populations

Coronavirus Global Response: European Union organises a humanitarian air bridge to Côte d’Ivoire

FROM THE FIELD: Weeding out Mexico’s unwanted beach invader

Universities need strategic leadership. Here’s what it looks like

One-third of young people still optimistic despite COVID’s dramatic hit on education and jobs

Pandemic versus fear

The fat from your next takeaway meal could help clean up global shipping

90% of plastic polluting our oceans comes from just 10 rivers

Scientists are growing meat on blades of grass

The story of 2018, in 10 charts

How ‘small’ is Europe in Big Data?

FIAT Chrysler: from Geneva Motor show to the World, and back

A Sting Exclusive: “Leading by example! EU must push for UN deal to avoid dangerous climate change”, European Parliament Vice-President Ulrike Lunacek cries out from Brussels

“The Belt and Road Initiative aims to promote peace, development and stability”, Ambassador Zhang of the Chinese Mission to EU highlights from European Business Summit 2018

Countries violate rights over climate change, argue youth activists in landmark UN complaint

There’s a single-use plastic you’ll throw away today without realising

Parliament approves €500 million for schooling of refugee children in Turkey

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s