Tag: Trade War

Trump’s Trade War Against China: It Has Nothing In It for Americans– Trump Does Not Care

Posted on by Joshua Kingdom

On Tuesday last week, a Trump 10% tariff increase on goods imported from China came in effect triggering an almost immediate response by the Chinese government that imposed several duties on United States produced commodities thereby reviving the US-China trade war.

President Trump’s insistence on doing things this way is puzzling because all signs show that the policy will not only not benefit his country but hurt it. In fact, it has started already. Following the announcements for example, stocks for tech giants Apple, Tesla, and Nvidia tanked. The projections for what is to come do not look good either; the Peterson Institute for International Economics estimates that low-income earning Americans (a constituency that overwhelmingly voted Republican last year) will see their household income reduce by 3.5% something that Goldman Sachs attributes to the expected increase in the price of consumer goods. Mark you, US-based producers are likely to take advantage of the overall market situation by equally hiking their products.

Sen. Elizabeth Warren speaks at a rally to protest the closing of the Consumer Financial Protection Bureau and the work-from-home order issued by CFPB Director Russell Vought outside its headquarters on February 10, 2025.  Photo Credit: Getty Images

We do not have to wait on the future though as this is not the first time that a Trump-led administration takes issue with Chinese products. If at all, these levies are one of his signature marks from the first that he appeared on the political scene. And sure enough, the outcome of his 2018 onslaught is no better than what I laid out above. The financial burden born thereof was met on consumers according to the Quarterly Journal of Economics, farmers that formerly benefited from the then $24billion trade with China went bankrupt, and at least 300, 000 jobs were lost. Overall, the economy saw a 0.3% GDP lag. As for the trade deficit with China, it stalled at $345 billion which is more or less what it was when the tariffs were first promised with the otherwise would have been difference going to other countries e.g. Japan, Britain, and South Korea rather than benefiting manufacturers in the USA.

Moreover, things can only get worse because whereas China has exhibited nothing but good faith up to now (including pointing out that trade wars have no winners), it is far better placed to take on the new United States administration more than ever if push comes to shove. For one thing, Beijing is no longer as reliant on Washington as it was back in 2016. Thanks to a host of agreements that it entered with countries across continents in the intervening years, China has become a main trading partner of at least 120 countries. No wonder, the Communist Party of China (CPC) was quick to retaliate this time, sending a message that nothing will come easy.

Examining the nature of the countermeasures that President Xi’s government adopted is worth the time too. In restricting the exportation of elements that modern technologies heavily rely on for instance, China made it more difficult for American based innovators to compete effectively moving forward. Consider Tungsten which is such a rare mineral and yet key to aerospace ventures, molybdenum that is embedded in jet engines, ruthenium which is essential in the making of chips resistors etc. Australian National University has confirmed this much.

It does not help things that the US President has taken to the offensive in regards to relations with countries that have been traditionally understood as his country’s allies risking self-destruction. We are already seeing this with Canada on whose goods he almost imposed a 25% tariff– the imposition could very well accrue should the ongoing negotiations fall apart. Donald Trump has confirmed that he is considering adopting similar stances towards the European Union as well. In contrast, China has previously demonstrated its willingness to stand in the place of Global leader if a vacuum surfaces. Once Washington halted World Health Organization funding in 2020 thus, the CPC stepped forward and took on more responsibility as the other big boy in the room.

Why then (one would rightly ask) is President Trump so adamant? Well, it goes back to the fact that all he cares about is plundering to his base. Having successfully swayed them into believing a gloom and doom narrative, he must now take on the protector mantle. It comes from an old playbook in which a politician projects genuine grievances of his people onto an “other”. In China’s case, it started as early as the days of initial candidate Trump. Ever since, without facts, he has continued to associate Beijing with distorted depictions including saying that the nation was guilty of “raping” America and of “the greatest theft in the history of the world”.

What is more about this alternative reality, is that facts do not matter. Instead, the end justifies the means and Trump has taken it to heart.

The writer is a research fellow at the Development Watch Centre 

Trump’s Trade Tariffs: Evidence of American Aggression and Unreliability

Posted on by Allawi Ssemanda

In what many described as not surprising but still shocking, on Monday 10th February, the President of the United States of America (U.S), Donald J. Trump announced that Washington was slapping 25% tariffs on all aluminium and steel imports accessing the U.S market.

Speaking from White House where he made the announcement, Trump reasoned these tariffs are meant to reshape international trade. Without facts, America’s whining “tariff man” claimed global trade is unfair to the U.S and American workers. He proclaimed that his unorthodox use of tariffs was “the greatest thing ever invented” as he boasted calling it “the beginning of making America rich again.”

Despite stressing that these tariffs will apply to “all countries with no exemptions, no exceptions,” scholars and analysts contend that Trump’s 25% tariffs will largely affect Washington’s immediate neighbours like Mexico and Canada. The American Iron and Steel Institute lists Canada, Brazil, Mexico and South Korea as America’s major sources of steel and aluminium products.

Canada and Mexico, both America’s closest neighbours and trading allies are already under Trump’s pressure with the leaders of the two countries having agreed with Trump to pause his 25% tariffs levy on Canada and Mexico for 30 days after last minutes negotiations with “tariff man.”

For China, her products entering into the U.S are already facing a 10% levy announced by Trump on February 10th. Beijing has since then reciprocated with a similar percentage levy onto U.S exports into China. Trump is already threatening with a round of reciprocal tariffs. Such reciprocal tariffs would follow 25% levys Trump announced on aluminum and steel products and his additional 10% levy on Chinese goods. Despite criticism by several analysts, Trump insists “the long-term it’s going to make our country a fortune.”

While Trump is describing his use of tariffs against other countries as “the greatest thing ever invented,” and calling it “the beginning of making America rich again,” if critically analysed, his tariffs are not only likely to create negative impacts to targeted countries but will equally hurt the American Economy.

This week’s Statisticts from The U.S Bureau of Labor Statisticts shows that wholesale prices in the U.S have already jumped by 3.5% while consumer prices rose by 3%! Projections for U.S economy bears no good news. Ernst and Young’s chief economist, Greg Daco contends that in 2025 alone, America’s Growth Domestic Product (GDP) is likely to contract by 1.5% and 2.1% in 2026 with inflation rising by about 0.7%.  A deep analysis of this gambling method means that in a typical Donald Trump style – projecting toughness and being wise, “tariff-man’s” use of  tariffs as many analysts argue is an own goal and recipe for slowing America’s economy and will increase inflation which will hurt the very people Trump claims wants to save by forcing companies to work in the U.S and create jobs as a way of dodging his tariffs.

While Trump claims tariffs are meant to safeguard the U.S from the so-called  drugs, illegal immigrants as he noted for the case of Mexico and Canada, and ending what he called unfair trade with China, analysing Trump’s speeches and remarks on these tariffs makes one thing clear. President Trump is an Isolationist who thinks the U.S can be a perfect closed economy. Of course, this is far from reality.  For example, while announcing 25% now paused tariffs on Canada and Mexico, Trump was categorical telling Americans “we don’t need the products they have. We have all the oil you need. We have all the trees you need, meaning the lumber.”

It is not surprising that the Wall Street Journal’s (WSJ) 31st January 2025 editorial entitled “The Dumbest Trade War in History” argued that Trump’s tariffs are “for no good reason” and that all reasons advanced by Trump “make no sense.”

From multinationalism perspective, weaponizing trade at a time when the world is faced with economic recovery challenges partly caused by the Covid19 pandemic, and aware that free trade and uninterrupted global chain supply is key for the world to realise United Nations’ agenda 2030, one can conclude that under President Trump, the U.S is now openly selfish and cannot be relied on as a responsible member of global community.

A sign that reads ‘Buy Canadian Instead’ is displayed on top of bottles at a B.C. Liquor Store, in Vancouver, on Feb. 2.Chris Helgren/Reuters

Whereas Trump maybe boasting with his dumbest trade war hopping to reshape global trade on his terms, the scars will not be felt by targeted countries alone but also his voters who as of now Trump seems not to care much about. They already voted for him and he will not be seeking another term. Again, with his 23rd Jan. 2016 “I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose any voters, OK?”, Trump knows his suppoters are fanatics who can simply sell lies and blame another country say China and accuse it for their suffering should his trade war effects be devastating to American final consumers as many analysts predict!

While for geopolitical reasons some war hawkers in Washington may argue that Trump’s tariffs will slow China’s economic growth, at the end, the U.S will lose more than China.  It is important to note while his rhetoric is more against China, Trump is also targeting America’s closest neigbours and trading partners like Canada and Mexico. The message from this is clear. As Bernard Lewis taught us, “it’s risky to be America’s enemy, but it can be fatal to be its friend.” With this, geopolitically, while the U.S is always driven by Washington’s libido dominad – a latin phrase for the desire to dominate others, with Trump’s tariffs targeting “all countries with no exemptions, no exceptions,” the beginning of the end of America’s hegemony is closer than ever. It is now clear than ever before that what matters to Washington is not how close you’re to them. It is not their so-called “our shared values, good governance or human rights or democracy” as they normally claim. It is simply America’s interests that takes  precedence. This idea can best be understood from the words of U.S’ founding father, George Washington who in his 1976 farewell speech observed that; “No nation is to be trusted farther than it is bound by interest; and no prudent statesman or politician will venture to depart from it…unless both [nations’] interests happen to be assimilated.” 

 The writer is a senior research fellow at the Development Watch Centre.

 

 

 

America’s Long-Arm Jurisdiction Threatens Sovereignty and Human Rights

Posted on by Allawi Ssemanda

For decades, the U.S has on numerous occasions unilaterally announced sanctions targeting foreign companies involved in trade Washington deem against their interests through the so-called long-arm jurisdiction. Long-arm jurisdiction refers to jurisdiction over persons or entities domiciled or resident outside the territory of the sanctioning state.

It was unilaterally established after a case of International Shoe Co. v. State of Washington (1945) in the U.S Supreme Court. This means that, it is largely in interest of the U.S.

This law is unacceptable in present global order. For example, on a simple basis that the defendant has what American authorities consider to be some “minimum contacts” with the state, under the long-arm jurisdiction, U.S state courts are allowed to exercise in personam jurisdiction in civil and commercial cases including where jurisdiction cannot be exercised. It is not a surprise that it has been largely used by the U.S to “punish” countries and companies’ world over the U.S considers to be impeding America’s interests.

Secondly, going by international laws, the exercise of a country’s jurisdiction over an extraterritorial person or entity generally requires that the person or entity or its conduct has a real and sufficient connection to that country. Yet the U.S. exercises long-arm jurisdiction on the basis of the “minimum contacts” rule, constantly lowering the threshold for application. The law is very unfair and gives American judicial system unchecked powers to go after foreign individuals and companies which we have no guarantee that it cannot be abused because of politics. For example, a mere use of the U.S dollar for financial services or using U.S mail services is considered to constitute the so-called “minimum contacts.”

Indeed, during Trump Administration, the U.S used long-arm jurisdiction to unfairly target China with endless unfair tariffs against Chinese products, an act some analysists argue was meant to promote unfair competition in favour of American companies.

A study by the Cato Institute, an American libertarian think tank found that the U.S used long-arm jurisdiction in violations of World Trade Organisation (WTO) and the U.S laws as Executive ignored Congress role. The study further revealed that while Chinese firms were most affected, even American’s citizens were affected as China responded to Trump administrations trade tariffs. The study entitled “Unfair Trade or Unfair Protection? The Evolution and Abuse of Section 301” argues that section 301 of long-arm jurisdiction “grants the executive branch far too much discretion in defining an actionable foreign trade practice” which may be exploited for political reasons – it allows American President to safeguard America’s trade interests by remedying any “act, policy, or practice of a foreign country [that] is unreasonable or discriminatory and burdens or restricts United States commerce.” Important to note is that the same law defines “unreasonable” in very ambiguous manner simply calling it “otherwise unfair and inequitable.”

All the above puts the U.S at advantage over other countries, potentially making the rest inevitable victims should American politician(s) feel that a foreign company is putting a stiff competition against American(s), such foreign companies or individuals can easily be sanctioned by America and tactfully kicked out of business.

As Alan Sykes, a Law professor at Stanford University argued, the choice of words used in long-arm jurisdiction “Section 301 can encompass virtually any foreign government practice unilaterally deemed objectionable by the U.S.” This has huge potential to facilitate political opportunism and harmful outcomes where the U.S can freely target other competing countries.

More worrying, the U.S keeps making the use of its unfair long-arm jurisdiction purposefully wide. It has developed the so-called “effects doctrine,” meaning that jurisdiction may be exercised whenever an act occurring abroad produces “effects” in the U.S regardless of whether the actor has U.S citizenship or residency, and regardless of whether the act complies with the law of the place where it occurred!

Because politics makes players selfish, it is perhaps the right time countries globally call on the U.S to abandon laws that antagonise global trade, order and peaceful co-existence as well as free and fair competition. This is because, whether you’re U.S’ adversary or ally, individual or a foreign company, provided you’re not American or fully serving their interests, we are all candidates of this unchecked long-arm jurisdiction.

Today, the U.S has come up with different legislations which are meant to advance the long-arm jurisdiction which has potential to harm interest of foreign countries. Other legislations that have been made to further strengthen long-arm jurisdiction among others include Trading with the Enemy Act, International Emergency Economic Powers Act, and Countering America’s Adversaries Through Sanctions Act.

Despite favouring the U.S, such legislations also in the long run hurt America(ns) and have potential to disrupt global chain supply and international trade. For example, despite Trump Administration targeting China, actions of Section 301 strained relations between Washington and the European Union as Trump administration twice targeted the EU using the same section.

European Union has been opposing Section 301 arguing it is inconsistent with the rules of the WTO which prompted EU to challenge it at the WTO which ruled in EU’s favour.

While tensions as a result of U.S’ tariffs which EU called illegal ended after the Biden administration negotiated a mutual cease-fire, this did not result into total termination of the offending subsidy programs in the Airbus‐​Boeing case. Whilst the Biden argues that it is Trump administration that misused section 301 of long-arm jurisdiction, Biden administration which came promising to embrace globalism seems reluctant to move away from Trump-era section 301 and appears to be in agreement with the Trump era’s America first with reports that his administration is now considering a new Section 301 case against China.  Indeed, recent reports consistently shows U.S courting Japan and the Netherlands to restrict China from accessing semiconductor manufacturing equipment.

In conclusion, as the famous Martin Niemöller would warn in his “first they came for Communists and I did not speak out because I was not a Communist.,” those who believe in fairness should stand up against America’s long-arm jurisdiction now before it is too late to have anyone to speak for us. The jurisdiction is a thing of past and is akin to colonialism. The practice is not only a major way of violating fundamental rights but has in many instances resulted into suffering and death of people. For example, as a result of the so-called long-arm jurisdiction, the U.S imposed sanctions on countries like Afghanistan, Iran, Syria and Yemen among others. U.S based Brooking Institute estimated that as a result of American sanctions, affected countries lost abilities to effectively contain COVID-19 pandemic. In Iran alone, over13,000 people died from the COVID-19 pandemic which was worsened by U.S sanctions.

Allawi Ssemanda, PhD is a Senior Research Fellow at the Development Watch Centre.