Author: Ken Middot; Merck

Geopolitics and geopolical logic tells us that the two world's largest economies in China and the United States should end the trade war.In fact, the trade war should not be played at all.The tariff war between China and the United States with eyes and tooth return to teeth not only harmed the interests of China and the United States, but also harmed other countries in the world dominated by the United States, such as Japan and South Korea.

According to statistics from the US Global Trade Partner Consulting Company, if Trump imposed a 25%tariff on US export goods on US $ 250 billion, it will threaten 2 million jobs in the United States.This statistics also found that the Sino -US tariff war has lowered 0.37%of the US GDP, lost 950,000 jobs, and lowered the average annual household income of $ 900.

It is not strange to cause such economic losses, because most Chinese products exported to the United States are actually products made by American companies in China.This is actually tax on the middle and final products of the United States, increasing production costs and prices.Tariff wars have led to a significant decline in the exports of agricultural products and energy in China.According to the US Statistical Bureau, farm bankruptcy increased significantly in 2018, reaching the highest point since the Great Depression in the 1930s.

China is not unscathed.According to statistics from the International Monetary Fund, China's GDP growth has dropped from 6.8%in 2017 to 6.6%in 2018.More importantly, tariffs have increased economic pessimism, which is reflected in the shrinking real estate development, and factory layoffs are even shut down.

The economy of Japan and South Korea is closely related to China and the United States, and it has also been severely hit.Japan and South Korea and other Asian countries produce components for many American brands such as Apple. If the shipment of Apple devices is reduced, the demand for corresponding parts will be reduced.

In view of the above reasons, the United States and China have 10,000 reasons for stopping the trade war.China has adopted a positive attitude on this issue, expressed his willingness to buy a significant increase in the number of imports of American products, including agricultural products and energy to help the United States reduce the trade deficit.China also expressed its preparations for each step with the United States to compromise with issues such as intellectual property protection and mandatory technology transfer.

In the field of market access, China is actually more open than the United States.For example, according to the statistics of the Chinese Ministry of Commerce, after Trump came to power, the United States has increased the total direct investment in China;The sharp decline decreased from US $ 45.6 billion in 2016 to $ 4.8 billion in 2018.

To prevent China from investing in the United States on the grounds of national security, it has become the norm of the Trump administration and the US Congress.For example, the U.S. government prevented the cooperation between the communication giant ATT and Huawei to sell mobile phones in the United States.Although so far, there is no evidence that the Chinese government uses Huawei or other communications companies to engage in intelligence activities in the United States or other countries.

Of course, the U.S. government is very clear about the consequences of the trade war, and its allegations on China are just unprecedented winds.So, what is the real motivation for the United States to launch a trade war?

Maintain the United States transcendence

History tells us that the United States is dominant in the global economic and geopolitical system after World War II.At the Bretton Forest Conference in 1944, the United States represented Harry Middot; White insisted on making the US dollar a global reserve currency and asked the International Monetary Fund and the World Bank to accept the United States.When formulating the General Customs and Trade Agreement, the rules for cutting tariffs are actually developed by Americans.

The so -called amendmentist historian believes that the original purpose of the Marshall plan is to strengthen the dominance of the United States.Only countries that comply with US values and standards can we get generous assistance and loans from the Marshall plan, and these loans can only be used to buy American products.These historians proposed that although Marshall plans to help Europe and East Asian post -war recovery, its main purpose is to prevent the expansion of the Soviet Communist.From the perspective of subsequent history, Marshall plans to achieve this goal.

Back to this day, from the perspective of the United States, the rise of China is a greater threat than the Soviet Union that year, because the development of the Asian giant's economy, military and science and technology is almost fasting with the United States.Although China's military power is not as advanced and so powerful in the United States, it is still capable of a huge blow to Americans' lives and property.China is rapidly shortening the technology gap with the United States, and in the fields of 5G, artificial intelligence, etc., it has even surpassed the United States.

Because the role of 5G, artificial intelligence and other technologies is not limited to the economic field, but also for military, US politics and security agencies are highly alert to this and have been determined to stop China's scientific and technological development.For example, the United States not only prevented Chinese communications companies such as Huawei from entering the US market, but also required them to be consistent with the United States and other countries.The United States even put pressure on Canada, forcing the latter to arrest Huawei CFO Meng Wanzhou, who had passed the transit with lack of evidence.

The United States has also re -used geopolitical tricks to manufacture tensions in East Asia and manipulate the Taiwan issue.The United States visited Taiwan through legislative lifting of senior officials and allows military exchanges with Taiwan.Recently, some Republican senators even asked Cai Yingwen to give a speech at the US Congress.At the same time, the U.S. Navy has stepped up freedom of sailing in the South China Sea and invited allies to join.

In short, the political and security of the United States will not allow China to challenge the oversupply of the United States in economy, military, and technology.Leitchizer, Bolton, and Navaro of the Trump administration have expressed their attitudes very clearly.Trump himself also said that if China and the United States want to reach an agreement, China must make structural changes, which means that whether it is a state -owned enterprise or a private enterprise, the Chinese government shall not provide subsidies and support to their innovation.

Made in China 2025

In this context, what kind of trade agreement can the United States satisfy the United States?It can only be China abandon Made in China 2025.Made in China 2025 is a ten -year action program. It plans to support high -tech industries through government support to make large amounts of funds for communications, artificial intelligence, and R & D and development, which prompts the Chinese economy to transform from labor -intensive to high value -added.The United States' tough response to China shows that this policy is effective.

It is almost impossible for the Chinese government to abandon this plan because this will cause China to always lag behind the United States.What's more important is that this also involves extraterritorial law. The United States is actually asking China to transfer sovereignty. This is what China will not agree or should not agree.

In addition, it is unclear now that Chinese and the United States are even more damaged in the trade war.China's exports to the United States only account for 4%of China's GDP, many of which are products made by American companies in China.If this part of the product cannot be exported to the United States, it can be digested by the Chinese market.China has a population of 1.4 billion, including 400 million middle class with annual income from 12,000 to 72,000 US dollars, with huge consumption potential.80 countries along the Belt and Road Line have also provided a broad market for Chinese products.Therefore, even if the Chinese economy is hit in the short term, it may become stronger in the middle and long term.

Conclusion

The United States should take a step back and coordinate with China to stop the trade war because the trade war will cause damage to the United States, China, and even the world economy.According to the forecast of the International Monetary Fund, if the trade war continues, the economic growth rates in the United States, China, and the global economy will be reduced to 2.5%, 6.4%, and 3.7%in 2019, 0.2 percentage points lower than 2018.

But it is sad that the US politics and security decision -making levels are more concerned about how to maintain the oversupply of the United States, rather than protecting the interests of the United States and the public.Therefore, China and the United States may still be difficult to reach an agreement and stop the trade war for the time being; even if such an agreement is reached, it may be difficult to continue.