Trump, trade and the advantage of autocrats

Recently, there has been good news about world trade: everything seems to indicate that A large-scale trade war between the United States and China could be avoided.

The bad news is that if, in fact, we will conclude a trade deal with China, it will be essentially because the Chinese offer US President Donald Trump a personal political advantage. At the same time, a much more dangerous trade conflict with Europe is looming. Europeans, who still have this peculiarity called the rule of law, can not resort to bribes to achieve commercial peace.

The bottom: last year, The Trump government imposed tariffs on a wide range of Chinese products, which covered more than half of China's exports to the United States.. However, this could only have been a start: Trump had threatened to impose much higher tariffs at $ 200 billion on Chinese exports as of March 1.

What motivated these rates? Surprisingly, there does not seem to be a powerful group of voters calling for protectionism; In fact, some large industries have put pressure on Trump's business strategies and it is clear that the stock market does not like the trade conflict because it disappears when tensions rise and picks up when they stop.

So the trade dispute is basically a personal vendetta of Trump, which can be dedicated because the US international trade laws give the president a great deal of discretion to impose tariffs for various reasons. Therefore, the trade policy forecast is to decipher what is happening in the mind of a man.

At present, the United States has real reasons to be unhappy with China and to demand policy changes. After all, there is no doubt that China violates the spirit of the rules of international trade by restricting the access of foreign companies to its market in practice, unless they provide it with a valuable technology. So there are arguments for the US to put pressure on China – as well as other advanced economies! – for China to end this practice.

However, there has been little evidence that Trump is interested in the real problem of China. Over the weekend, I attended a conference on trade policy during which the experts had been asked what Trump really wanted. the most popular answer was tweets.

As expected, Trump attributed what he calls China's big concessions, which generally seem related to the fact that the Chinese government has ordered companies to buy US agricultural products. Specifically, the postponement of the trade war came after the promise made by China to buy 10 million tons of soybeans. This will please farmers, although it is not at all clear that this will make up for the losses they have suffered because of Trump's previous actions.

However, the fact is that China's offer is not at all tied to the national interests of the United States that are really at stake. This only gives Trump reason to tweet.

Oh and by the way: The largest bank in China, which is owned by the government, occupies three full floors of the Trump Tower in Manhattan. The bank had planned to reduce its space; It will be interesting to see what happens with this plan now.

At the same time, the US Department of Commerce has prepared a report on the imports of European cars which, according to the German press, conclude that they pose a threat to national security.

If it sounds ridiculous, it's because that's it. In fact, although Europeans are not little angels, they are guided by the rules of the world and it is difficult to accuse them of having committed considerable commercial sins. Yes, they imposed a 10% tariff on US vehicles, but the US imposes a 25% duty on their light trucks, which far outweighs the situation.

However, a department led perhaps by the most corrupt trade secretary in history will conclude what Trump will want to conclude. In addition, this report gives the president the legal power to declare a trade war against the European Union.

If this happens, this trade war will be extremely detrimental. The European Union is the largest export market of the United States, with about 2.6 million direct jobs. In addition, our economies are very tied, which is why even the US auto industry is appalled by the possibility that Trump imposes tariffs on automobiles.

The question is: unlike the Chinese government, The European Union can not order private companies to make eye-catching purchases of US products. No doubt, you can not channel business for Trump organization properties. As a result, the chances of escalating a trade dispute remain high.

The fact is that when it comes to Trump and his team, Autocracies have an advantage over democracies that adhere to the rule of law. In addition, it could be said that commercial disputes are the least important.

Think of the pressure exerted by Trump advisers who are in financial conflict to sell nuclear technology to the Sierra Kingdom for Bones, also known as Saudi Arabia. Or think of the influence that expatriate golfers seem to have on Venezuela-related politics.

Thus, while the stock markets are satisfied with the prospect of trade peace prevailing with China, the picture is deeply troubling. If we can limit the damage of this confrontation, it will be for the wrong reasons. Moreover, the twisted motives governing American foreign policy can still have destructive consequences, and a trade war would not even be the most terrifying possibility.

* Copyright: New York Times 2019 Information Service