Trumps escalation is only a Bluff

A last round of Negotiations this week should bring the months-long trade dispute to an end. A compromise was brought close to the handle. 90 percent of the points in dispute were resolved, it was said of both sides. A almost a hundred-member Chinese Delegation was on the way in the USA, as the US President, Trump with two Tweets engagement. The negotiations were "too slow," he complained, China wool already to negotiate is Obtained. "So not." Therefore, he wanted to increase the import duties from Friday from 10 to 25 per cent, and the Option to duties to keep additional Chinese imports of 325 billion dollars in the open.

taken this threat seriously, so it corresponds to the Worst-Case scenario: In this case, Chinese goods to the value of over 700 billion dollars would become more expensive with duties so strong that they would trigger according to the analysis of the world monetary Fund will inevitably have a global recession.

According to nervous, the financial markets reacted. The worst hit equity markets in China. The benchmark index of the Shanghai stock exchange fell by 5.6 percent, and those in Shenzhen to 7.4 percent. Also to the other Asian markets, Europe and the United States, the stock markets fell, however, manageable in the context of up to 2 percent.

let's not with the gun on the head with negotiate, says Beijing – and have sent a Delegation to Washington to negotiate further.

The subdued reaction may be the reaction of the Chinese Delegation declared. You leave with the gun on the head with a negotiate, it was said to be first in Beijing. Nevertheless, China pledged yesterday to send a Delegation to Washington to negotiate further. When this is the case, remained open, which is why the situation remains tense.

Trump joined in their own country to severe criticism and lack of understanding. A coalition of several trade organizations with the name "Tariffs Hurt the Heartland" accused the President, with the duties threatened, especially the US-to harm consumers. The higher taxes would cost every family in the USA 500 dollars per year. Contrary to trump's claim, to win that trade wars easily, that there was no one winner of the escalation, said Tim Stratford, Chairman of the U.S. chamber of Commerce in China. "The punitive duties pain on both sides of the masses."

it is Questionable whether Trump could enforce his threats at all. This is because large parts of the US economy are dependent on Chinese imports, and enough time had to have on such a dramatic rise in the price of imports to prepare and to find other suppliers in the Asian region. Enforcement of the new duties in a few days, would be challenged, according to trade experts before the court, and the U.S. Position relative to China's weaknesses. "With Trump, you know, never," says Chad Brown from the Peterson Institute for International Economics, "but this could merely be a threatening gesture".

A collapse can't afford Trump

The tactics of escalating threats is new, but she already had her effect in the negotiations with Mexico and Canada, only a limited. The Nafta successor, was not for a "historic breakthrough", the Trump had promised, but to an Updating of a 25-year-old agreement, which is for the United States in the best case, a zero-sum game.

The attack against China may have to do with it, that China has offered some concessions, but according to the US chamber of Commerce in the Central claims of cyber theft, the data flow for the US firms and the competition-distorting government remained subsidies hard. Even chief negotiator Robert Lighthizer warned last week against exaggerated expectations.

A collapse of the talks, can't afford to both sides. Trump hopes to work with China Deal in the election campaign and put it next to the strong economy as a trump card to play. However, China had to support in the last few months, the ailing confidence of companies and investors with the stimulus programs. They fear that the government could not have come at Trump too strong. (Editorial Tamedia)

Created: 07.05.2019, 09:38 PM