China: We’ll “Fight Against Protectionism,” Lead “Global Governance” Push
A week ago, in "China Making Preparations For (Trade) War With Trump," I flagged incoming headlines from Bloomberg (they hit after market hours) that suggested officials deep within the Politburo are preparing themselves for a trade war with Washington.
Allegedly, Beijing is contemplating the following set of counter measures:
antitrust actions
tax probes
tighter scrutiny over imported goods from the U.S.
limiting Chinese government procurement of U.S. products
launch of WTO-compliant
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Ironic perhaps is that trade tariffs and retaliations to them only raises the price of goods to the consumer, while at the same time fattening the budgets and enabling the growth of the same governments supposedly helping their middle class consumer workers. Who would have guessed that trade tariffs would only serve Trumps interests and “his peoples, his administrations, and his Presidency?” Since when did US Presidents ever “own” the office of President?
For starters, having China nobly step forward and take up the banner of globalization is rich. They are acting in their own self-interest. Yes, reduced trade impacts botH China and the US, but it is a disparate impact. The US economy is more diverse and is NOT centrally planned. That will result in capital quickly finding the new, best use. Sure prices will rise, but that will mainly be do in the medium term to increased wages for some items.
Trade is all about optimizing every locale’s competitive advantage in logistics, raw materials, manufacturing expertise, proximity to markets, etc. if you eliminate wage arbitrage, very few of these advantages accrue to China.
Trade restrictions will disproportionately impact the Chinese and everyone knows this. They are running scared and, again, this is about Trump setting the stage for negotiations. Nothing more.
Mike O is spot on.
Though Trump’s rhetoric is disturbingly protectionist (actions?…we’ll see), China decrying protectionism is laughable. It is and has been one of the more “protectionist” societies in history.