EU and China break ultimate trade taboo to hit back at Trump
Source: Politico-Europe
Brussels and Beijing want to stop the US justifying tariffs as security measures, but the move carries high risks.
By JAKOB HANKE 11/21/18, 5:35 PM CET Updated 11/22/18, 7:23 AM CET
Anger over U.S. President Donald Trumps steel tariffs is pushing Europe and China to rip up one of the most sacrosanct unwritten rules in international trade policy: Dont question national security.
Brussels and Beijing on Wednesday launched explosive cases at the World Trade Organization, in which they will argue that Trumps tariffs on steel and aluminum, imposed in May, cannot be justified on grounds of national security, as the White House claims. The EU and China were joined in their protest by Mexico, Norway, Russia and Canada.
The six-fold attack on Trump is a landmark departure from the orthodoxy of trade diplomacy as countries have traditionally shied away from challenging restrictions justified by national security concerns, for fear that such a case could blow up the entire global trading system.
Whichever way the WTO rules, Pandoras box has been opened. If it rules that national security can justify tariffs, the decision could inspire other countries to play the security card. On the other hand, if Washington finds itself backed into a corner, it could simply quit the WTO.
Read more: https://www.politico.eu/article/eu-and-china-break-ultimate-trade-taboo-to-hit-back-at-trump/
empedocles
(15,751 posts)Tobin S.
(10,418 posts)He actually did something as soon as he took office that many here at DU wanted to do: back us out of the TPP negotiations. But there is a difference between negotiating better terms for your country on trade versus playing hardball with tariffs. Trump skipped the diplomacy and negotiations and went straight to war on trade. He's taken steps that were completely unnecessary considering the economic recovery...I assume out of greed.
TheBlackAdder
(28,211 posts).
TPP was a boon for China, as they were not going to join. Effectively undercutting TPP nations.
They do this in Central & South America and Africa now.
The US and EU have trade agreements with nations that promote labor, finance and ecology. Most US & EU nations deal on short-term contracts and contracts that are smaller and can be canceled by corporations before their term ends--that causes costs and instability to countries dealing with the US and EU.
China, on the other hand, operates as a collective nation, and says, we'll sign on to multi-decade contracts for goods, and we don't care what you do to your labor, finance or ecology as long as we get the materials. Not only does that create income stability, but it saves emerging economies the costs of adhering to United Nation MDGs.
China is now the chief trading partner with nearly half of the Central and South American countries, displacing the US.
China then sells their goods back to those nations, specifically undercutting US and EU goods to make those nations dependent on China's low costs. More dangerously is that China sells goods cheaper than what are made in-state, so it slowly displaces local workers, lowers wages further and makes the nationals even more reliant on Chinese goods.
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TPP would hamstring TPP-signing nations to these development goals, while China remains on the outside, picking off the weaknesses of each nations individually, and undercutting other TPP nations. The only way TPP would work is if Chain was a signer--which they hinted at becoming, but decided not to join. China's leverage remains if they are not a TPP nation.
https://www.democraticunderground.com/10029438923#post14
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TPP will give the Pacific Rim to China, just like how NAFTA gave Central & South America to them!
The difference between US business and China is that China acts as a collective state.
When they move into a country, they don't hire locals for their factories, they bring in labor from the mainland.
NAFTA, while nicely premised with good intentions, has caused 7 Central & South American countries to become chief trading partners with China and 6 more nations are about to shift the bulk of their import-exports from the US to China within the next 5-7 years.
China acts as a mercantile nation. They are not bound by the job, financial, and social constructs of NAFTA.
They move into a country and say, deal with us and we won't hold you to the same standards that NAFTA nations do.
They then pay people lesser wages and make 10-20 year or more contracts for guaranteed raw materials that China needs to produce its goods for the world. This completely undercuts NAFTA's goals. Then, China sells those finished goods to the same countries below the costs locals or other imports can provide them. This puts locals out of work. Since they have less money, they become even more dependent on Chinese goods.
(This is the same shit that Wal*Mart does. They move into an area, sell their goods lower than Non-Wal*Mart stores to undercut and drive local businesses out of competition, which causes people to lose jobs. Wal*Mart benefits from low wages, that force people onto government programs--something local businesses cannot do. As people lose their jobs, they have less buying power and rely more and more on Wal*Mart's goods, feeding this vicious cycle.)
This is why China does not sign onto TPP... because they will undercut TPP and walk away with the keys to the kingdom.
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I'm all for the TPP, ONLY IF China signs onto it. If not, they will wield enormous global market power. They have already planned ahead and secured over one million square miles of crop lands in Africa, and another half-million in South America, for the next 50 years! While the US plans on the short-term, China plays the long game.
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Tobin S.
(10,418 posts)BTW, I was one of the DUers who were opposed to the TPP. My opposition was based on what it would possibly do to the wages of working people here in America. The TPP would have put us into more direct competition with much cheaper labor.
Republicans and many Democrats have been in favor of these kinds of trade deals for a while now. I've heard the rationale from a national security perspective. It goes something like this: If you are trading partners with a country, and you rely on them a great deal for some of the products sold in your country, you are less likely to go to war with that nation, and more likely to have positive relations with them. In other words, the baker won't go to war with the flour supplier. They are dependent on each other for their well being. Do you think there is any truth in that notion?
PatSeg
(47,586 posts)That is the problem, he really isn't acting from any level of reason at all. Sometimes, it appears that Trump does things because he can and he seems to enjoy the resulting chaos. Meanwhile, he can use the office to attack people he perceives as enemies, which is fast approaching everyone on the planet.
Like a small child, he enjoys the reaction from his bizarre decisions and instead of backing off, he doubles down.
Tobin S.
(10,418 posts)Trump isn't very wise, but I don't think he's insane. The problem is that he didn't just back us out of that deal, he went on the offensive. He thinks that America is starting to fall behind to China on an economic front, and is doing what he thinks he needs to do to keep us in the lead. It is true that a few years ago China was projected to be the world's largest economy within a decade. That might still be true. The problem is that, like most of the dealings Trump made in his life, he thought he could just power through and bully everyone out of the way. The rest of the world doesn't work that way. Like most bullies, it doesn't look like he was prepared for people hitting back, and that's exactly what is starting to happen.
I didn't say his rationale was reasonable.
I look forward to a day when people and nations can work together cooperatively instead of all this competition. The survival of our species depends on it.
In Trump's old life, people didn't hit back and he got used to being an untouchable big bully. He was the classic big fish in a small pond. Nothing in his life prepared him for where he is now.
One big problem with Trump is he will not admit he is wrong, so instead of backing off, he doubles down, defying anyone to stop him.
Hopefully we as a species can survive long enough to see a more tolerant, cooperative world.
The Blue Flower
(5,444 posts)nt