Checkpoint Asia

Trump’s “Trade War” Is Morphing Into an Outright Economic War on China, A War the US Can’t Win

Attack on Huawei shows this isn't about trade imbalances but about China pulling ahead of the US — but it's already too late

The Trump administration has made it known it is moving to control, limit and potentially ban Huawei from purchasing components in the US.

Somebody explain to me how this serves the goals of Trump’s trade war? Supposedly the Chinese sin was to bring too much of their goods to the US, and not buy enough American products in return.

Yet here is a Chinese company which picks up as much as $20 billion worth of US-made components a year and the US government response isn’t to send them a thank you note, but to move to prevent it from being able to continue doing so.

I’m sorry but when you tell Intel it can no longer sell its processors to a company in China that is no longer a “trade war”, that is economic warfare.

The same sort of economic warfare practice for example against Russia, which can not freely import US-made oil drilling equipment or German-made machine tools. Which is obviously not done for the benefit of favorable trade balances, but to make it more difficult for Russia to grow.

The war on Huawei thus lays bear Trump’s real problem with China — it’s not trade deficits, that’s just a symptom of other things — but the fact it is pulling ahead of the US. Today as an economic power, and tomorrow perhaps in military and political terms, first in Asia and then beyond.

However, If there is an economic war I can’t see the US coming out victorious. China is the world’s top exporter, but America’s top export is its debt. Figure out whom the world needs more.

Trump can only succeed in making the Chinese angry but he cannot stop them from returning, after a few bad centuries, to the place they occupied for the most of recorded history — the epicenter of human economic activity.

The only way the US would stand a chance, would be if it could present a unified front with Europe and Japan and get them to cut off the Chinese as well. However Trump is just about the least qualified candidate in the world to be able to forge such a coalition.

Rather than look to hamper China, US leaders should reform their own country but they don’t know how to.