Neocons and trade war

By Sumantra Maitra
0 Comment(s)Print E-mail, March 29, 2018
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The US tariff action [By Zhai Haijun/]

The right rural base of Donald Trump finally saw that the Trump administration is now hijacked by neoconservative hawks. This is essentially a Bush 43rd administration on steroids. The tariffs are a signal of hardening neoconservatism, although there's still a hope that this issue will be resolved by talks. That is not all. The Trump administration will now have two of the most staunchest neoconservatives, John Bolton, and Mike Pompeo. Analysts fear that this might only exacerbate the more hawkish tendencies in Trump himself. 

Additional tariffs on certain Chinese goods and intellectual property cases against China in WTO would mean that there's a chance of a trade war, but it will depend on the escalation from both sides. "We have a tremendous intellectual property theft problem, it's going to make us a much stronger, much richer nation," Trump was quoted to say. The tariffs from the U.S. side is on 1300 goods mostly in the technology, rail and medicine sector where the Chinese have a competitive advantage. 

This is a trade war, which is fundamentally unilateral, and started by President Trump. The Chinese side has said repeatedly that it has no interest in a trade war. President Xi has repeatedly stated his opposition to protectionism, and in his speech in Davos mentioned that there are no winners in a trade war. The Chinese retaliation in 128 sectors will include wine, dried fruit and nuts, fresh fruit, steel pipes, ginseng, and modified ethanol which will be subjected to 15 percent tariffs. Aluminum and pork would see around 25 percent. In a curious move, the Trump administration wants to start a dialogue with China urging them to lower tariffs on cars.

The U.S. Treasury Secretary Steven Mnuchin has said in interviews that he is hopeful of a trade deal with China during the talks and a trade war is unlikely if a solution could be reached. He also categorically mentioned that while the U.S. isn't afraid of a trade war, it's not the objective, a rhetoric which mirrors Beijing. It's evident that at least someone in the American side understands that a trade war isn't good, regardless of whatever comes out of the Whitehouse. Moreover, the case in the WTO is stacked against the U.S. in relation to tariffs.

Needless to say, this is a move what defies logic from Trump's side, and only can be attributed to domestic politics. Trump needs to show he is tough on other countries, to his base. Ultimately however it is his base who will suffer. Even if Trump makes intellectual property his hill to die on, the intellectual property war would benefit only the coastal tech base and would do nothing for his heartland base. Instead, a counter tariff on fruits, wine and pork would ravage his support base. It is not clear however if that's what Trump wants, to foment a siege mentality in his base for the next election, an idea that they are at war with everyone around the world. 

The markets are not much worried. The Guardian reported gains in the stock market, and saner minds still hope that there's more bluster than actual malice in all the trade war talks. There's simply panic among farmers in response to Trump's plan. "We sell a lot of pork to China, so higher tariffs on our exports going there will harm our producers and undermine the rural economy," Jim Heimerl, the president of the National Pork Producers Council was quoted by Guardian. 

That would send a chill down the spine of the Republican leaders who are standing for reelection in the midterms and is in effect the strongest deterrence against any unilateral scorched earth trade policy the U.S. government is planning to undertake. Ultimately, however, Trump has no ally in his trade war, neither in Europe, nor in Japan or Canada. Trump needs China for different geopolitical challenges and to tackle them simultaneously and together. If he cannot manage that, his presidency would be regarded as a failure. This trade war would then be considered his first and biggest blunder. 

Sumantra Maitra is a columnist with For more information please visit:

Opinion articles reflect the views of their authors only, not necessarily those of

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