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23/8/2019  
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ECONOMICS
Say Richard Higgott´s paper, from Real Instituto Elcano

There is no such thing as a Trump strategy for China

Ignacio Espinosa Alcobendas Estudiante en la Universidad Pontificia Comillas

A document by Richard Higgott of the Elcano Royal Institute answers the questions of the current confrontation between the United States and China, the actors involved, how the confrontation increased and why a nationalist rhetoric of international trade prevails. In addition, it discredits some of the most notable truisms that embody Trump´s framework. There is no Trump strategy for China, one of his conclusions stands out.
Ignacio Espinosa Alcobendas 1/8/2019 Send to a friend
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1. Trump’s dispute with China set in Context

As to the moment when this bilateral showdown arose, the author points out the following: even though it has been with Trump that hostility towards international trade has stiffened, curbs to free trade have always been present. In other words, the current instability situation could be said to start in 2017 albeit there has always been a ‘cherry-picking’ approach to international trade. Higgott highlights the United States’ divergent attitudes towards its trade partners on whether these supported the former’s 2003 invasion of Iraq. As regards China, it has over the centuries hosted loads of material resources but lacked material capacity to make a profit out of these. Hence, although a similar clash between the United States and China has never taken place before, a historical background effectively exists.

Another point of discussion the reason why Mr. Trump’s populist rhetoric has resulted in the current showdown against China. As stated beforehand, it is from 2017 on that a mercantilist way to commerce has gained some foothold. As it is the case when bilateral relations lay between conflict and co-operation, the concept of perception plays a vital role in discussing this bilateral dispute. Therefore, the Constructivist school of thought could provide an optimal analysis of the standoff.

Higgott provides with an in-depth discussion on Mr. Trump’s populist manners, which revolve around the message of ‘Make America Great Again’. Xi Jinping, for his part, has consistently sought for populist manners, as well. In his words, China’s mission is to engage into one tenacious struggle alongside the leadership of the Chinese Communist Party (Phillips, 2017). In that sense, the author highlights the following: American and Chinese political systems differ in that the former is subject to checks; nevertheless, a nationalistic, quasi-authoritarian narrative is embodied in the narratives of both sides involved. To take the foremost example, America’s self-perception is to be the ‘number one’. Similarly, China envisions itself as the center of the universe.

2. The Gap between Trump’s perceptions and the  facts

The next point to cover is whether the measures taken by the Trump Administration correspond to what the actual situation would require:
  1. One of the pillars of Mr. Trump’s policy towards China is to shrink his country’s trade deficit. Effectively, according to the United States Census Bureau (2019), U.S trade in goods with China increased by 441084.8 millions of dollars. However, the Trump Administration seems not to be aware about Triffin’s dilemma, which states that U.S. trade deficit is inevitable, since the dollar serves as a global mean of payments as well as a sign of solvency. 
  2. As Higgott points out, Trump’s aggressive oratory towards Europe has tampered with the possibility of the U.S and Europe reaching a pragmatic agreement. Notwithstanding, data gathered from the World Trade Organization (2018, p.73) show that, as of the previous year, exports of services in Europe and North America add up to 64.2% worldwide, whereas Asia totals 25%, which highlights the dire need for securing a trade agreement between the two representatives of the West. 
  3. Lastly, the hard power dimension to which the Thucydides’ Trap theory is applied shall be discussed. The latter is a paradigm which is used to explain situations of war and/or insecurity between an established power (the United States) and a rising power (China). As Allison (2015) noted, “in 12 of 16 cases over the past 500 years, the result was war”. Nevertheless, the paper’s author does not include any worthy mention of the Thucydides’ Trap, nor evidence suggest that this will be the ultimate outcome. A recent report from the Stockholm International Research Peace Institute (2019, pp. 10 & 11) points out that U.S. military budget as a percentage of GDP has been of roughly 3.5% over the years, while it has accounted for 2% in the case of China. In other words, it turns out that the United States has overestimated the structural capacity of its rising rival in this sense.
3. President Trump’s Guideline fully matches his Personality.

Higgott, rightly, casts some doubt on the statement that the U.S. rivalry against China is Mr. Trump’s bad. As it is widely known, mercantilist economic policies as envisioned in the seventeenth and eighteenth centuries have prevailed worldwide until the present day. As stated in the introduction, no fully free trade world order has ever existed. What Trump surely is to blame for is the lack of a uniform guideline towards China besides the imposition of tariffs on the Asian country’s goods and services which are ultimately paid by American citizens.

In essence, Trump’s steps in his standoff against China are, as in every other conflict which involves the United States, a sign of his pessimistic, Jacksonian view on co-operation, multilateralism and, more broadly, the promotion of American values abroad.
 
4. Main Source.
5. Bibliography.

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1 There is no such thing as a Trump strategy for China
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