Abstract
The Trump administration is pursuing a “dual track” trade offensive. Track One, announced with US steel-aluminum tariffs, seeks token adjustments to preexisting trade terms with allies in NAFTA (North American Free Trade Agreement), Europe, South Korea, and other US bilateral free trade agreements. The recent South Korea-US negotiations represent the soft template. In Track Two, Trump is pursuing a hard line with China. US objectives are threefold: limit technology transfer to China, obtain more access to China markets for US business, and reduce the US current account deficit with China. US elites are internally split, however, on which objective should be given priority: the US defense establishment prioritizes the first, US multinational corporations and trade groups the second, while Trump seeks the third as means to mobilize his domestic political base with evidence that his “economic nationalist” policies are producing results. China's counter to Trump is a “carrot & stick” response offering concessions to the second and third US objectives, while holding firm on the first. The US-China trade dispute should be viewed as a weak US attempt to reproduce Reagan's 1985 Plaza Accord targeting Japan, and Nixon's 1971 abandonment of the Bretton Woods dollar-gold peg standard, targeting Europe. Trump's offense will prove less successful, however. The author predicts a US-China full blown trade war will be averted, as Trump and US capitalists settle for gains in objectives two and three, while denying China acquisitions of US corporations.
Highlights
Trade War! Trade War! When Trump preannounced on March 2 his plan to impose tariffs on steel and aluminum imports, the mainstream press immediately began hyping the line that trade war was looming on the horizon
Russia, and the United Arab Emirates are the major aluminum importers. (Worth noting, for 2017 steel imports China is well down the pack, 10th or 11th on the list, contributing only 2.2% of US steel, importing in the millions of dollars annually—not billion— and mostly semifinished steel goods used by US manufacturers for fabricating final goods produced in the United States.) When announced on March 8, Trump argued there would be no countries exempted from the 25% tariffs on steel and 10% on aluminum (2018, 1)
US auto makers have become dependent on US truck sales to stay afloat; they did not want Korean trucks to challenge them in the truck market as well
Summary
The US focus on China and technology transfer issues as the primary objective was revealed months ago. The opening of a trade war with China did not begin with some impulsive Trump tweet in March 2018 It has been in the works since at least last August 2017. China and the specific 1,300 tariffs were the target at least from August 2017, and likely in internal planning when Trump first took office in January 2017. Trump just set it all in motion on March 23, 2018. The OUST list of 1,300 tariffs was, and remains, a “bargaining chip” to exchange for what Trump and the United States really wants from China: reducing US technology transfer. On March 23, 2018, the targeting of China–US trade became official Trump policy
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