To say that the China-US trade war is scraping the bowels of tired old trade ideas would be flattery. China’s exports are pressing on regardless.
The US doesn’t seem to realize that there are 8 billion customers for China, not just the 340 million or so in the US. The rest of the world is keeping its trade options with China open. That’s a few trillion dollars of rebuttal to the American approach on all fronts.
US trade “initiatives” are almost always purely melodramatic responses to China. These responses are usually mechanical, like the ridiculous imposition port fees on shipping. This absurdity is yet another cost added to tariffs and other fundamental trade operations. The net effect is domestic inflation at a time when so many Americans are struggling with the cost of living.
There doesn’t appear to be any clear long-term plan for anything like the sort of absolute global dominance the US used to have.
This is no longer the almost completely crippled world of the late 1940s.
The US has major economic rivals on its own level now. There’s no USSR as a threat.
The cross-trade environment is sending mainly negative signals for US trade policy.
The China/US trade dichotomy couldn’t be starker or blacker and whiter in contrast. The US doesn’t have much on the ball but the AI mythos. China is picking up new markets for its own exports and imports as US tariffs repel imports.
Made in the USA will take at least a decade to even begin to approach the scale and depth of China. Full automation will be very costly. The Chinese are on their second or third generation of automated production.
Which leads to one large, unavoidable question – Where is the US going? At any rate, where does it think it’s going?
Not to overstate the case:
This administration will come and go.
Unworkable trade is usually circumvented, legally or otherwise. See Adam Smith for details.
US offshore money, and there’s a lot of it, can respond from outside the disaster area.
US investment can also move to less neurotic environments.
Large black markets usually appear when any trade is made difficult or too expensive.
If you’re thinking that a big capital vacuum could happen on Main Street and Wall Street, bingo. That’s the problem.
It’s actually a cultural problem rather than purely economic. The good old days have become today’s hallucinations. America is used to lots of free, agile, private capital. The constant casual mention of billions is symptomatic of America’s approach to money. It’s totally unrealistic and arguably beyond idiotic, but the money moves fast and in high volumes.
That capital invariably acts solely in its own interests. That’s where the money is likely to get sucked out of the mainstream. An unstable, chronically underperforming America can’t be a great place to put your money.
Whether the US government spends a lot or not, it’s not the same range of types of expenditure as the big private money. The political idiotscape isn’t much of a place for rational discussion, either.
Let’s be unambiguous, shall we?
The other side is talking about domestic politics. They’re not talking about damage control, rebuilding, or the future of trade. That’s not good enough. Total lack of leadership and even a sense of direction from both sides isn’t a good look.
America isn’t even talking about fixing its huge, entrenched problems. The rust is coast to coast. Obsolescence, in fact, is now being matched by obsolescence in mindsets. China has simply highlighted how few working brain cells are functioning in the US.
History isn’t waiting for America. Neither is anyone else.
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Disclaimer
The opinions expressed in this Op-Ed are those of the author. They do not purport to reflect the opinions or views of the Digital Journal or its members.
