Liberty Expose: Trump's Failing Crusade Against China

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In Trump’s 2016 election campaign, the businessman argued for cracking down on China who he has accused of duplicitous trade practices. Since then, he has withdrawn the United States from the Trans-Pacific Partnership that was one of the main bright spots of the Obama administration for pro-free trade Republicans, and he has initiated a trade war by establishing tariffs on our main rival in the Pacific Rim and has slashed aid to Latin American countries. While the President has claimed that this will allow the country to maintain an edge over China, this is far from the actual case. Furthermore, by cutting aid to Latin America, President Trump is driving our southern neighbors to ally with China and its “Belt-and-Road” initiative. All of these have shown that trade wars are not, as the President so boldly claimed, “good and easy to win.”

The trade war started back in 2018 after the Trump administration implemented trade sanctions on our main economic rival, which includes “restrictions on investment and tariffs on $60 billion worth of products.” According to the President and his allies, China has been robbing the country blind with its 25% tariff on American-made cars, among other restrictions. Over the course of the year-long trade war, the United States has levied $250 billion on Chinese goods,  for which reciprocated with tariffs on $110 billion of American goods -- particularly targeting soybeans which is one of the USA's main exports to China.

Overall, this trade war is taking more of a toll out of us than it is on China. According to the Foundation for Economic Education (FEE), “U.S. goods exports to China (excluding services) fell by 26.3 percent from March [2018] through October, while U.S. imports from China rose by 36.5 percent. The Federal Reserve itself assessed that for every month that the tariffs are in place, “Americans lose $3 billion in extra taxes and $1.4 billion in lost efficiency” Even if the United States is seeing a job growth in the steel industry -- for which these tariffs were meant to benefit -- they are not going to last in the long term and will only negatively impact U.S. consumers. Indeed, tariffs are great for the one industry that it is meant for, but is terrible for every other industry in the economy. Agriculture, tech, and others are forced to pay the price for the failure of the U.S. steel industry to adapt to a changing market and political climate.

But tariffs are not the only change in policies that are crippling the United States’ strategic advantage over China. The President has taken aim at foreign aid to Latin American countries, particularly Guatemala, Honduras, and El Salvador. The suspension of aid comes after the failure of these governments to halt the flow of migrant caravans from heading towards the US’s southern border. While the policy is meant to influence the Northern Triangle countries to take action, all it has done is contributing to the rising influence of China in the region. The “Dragon in the East” has been making inroads with economies across the globe since the late ’90s and is gaining steam under Xi Jinping’s reign. Through its “Belt-and-Road” initiative, China is investing its money in both developing and developed countries in hopes of bringing these states into their sphere of influence. In Central America, the Asian powerhouse is funding several big-ticket projects, including a 170-mile canal in Nicaragua and investments in developing the region’s telecommunication infrastructure. These investments, along with the free trade deals China is forging with countries in Latin America, are all reducing US influence in the region.

If President Trump wanted to revitalize the American economy, he should have stayed with the Trans-Pacific Partnership that would have been a boon to the country’s continued economic and political prowess in the Pacific Rim. First off, the main economic benefit would be an annual bump in the gross domestic product that was estimated to be between $57 billion to $78 billion. Last week, the United States posted one of its best quarters in GDP growth, which was at 3.2 percent. However, even with this growth, economists have noted that we should expect to see a slowdown in the coming quarters as the American consumer is spending less money on goods, which in turn is causing businesses to buy less with a full inventory.

Besides a potential slow down in the economy, abandoning the TPP was a coup for Chinese interests. With the U.S. out of the picture, China is swooping in, hoping to craft a free trade agreement of their own with members of the TPP and ASEAN (Association of Southeast Asian Nations), including Vietnam, Malaysia, Thailand, etc. If the Regional Comprehensive Economic Partnership (RCEP) is signed and ratified by these states, it would only push key U.S. partners into China’s welcoming arms. Currently, Japan and the U.S. are work on a trade agreement, but the damage is already done and China is already sinking its fangs into Asia.

To put it bluntly, no President has done as much harm to American standing in the world than Donald Trump. Through reckless trade wars and slashing of foreign aid, other great powers using our dysfunction to their advantage by investing vast sums of money in financing projects in the developing world. The abandonment of the TPP was a major defeat for the United States as well. Even though China is not a part of the free trade partnership, it gains the advantage of a US that is afraid to participate on the world stage. When Trump is gone, whether it be in 2020 or 2024, the Republican Party must rediscover its passion for free trade and maintaining an active role in geopolitics. Without American involvement in international trade agreements and providing aid to developing countries, China will be able to conquer the world, all without firing a single bullet.