Let me summarize Tom Friedman's article.
1. China practices text book mercantilism. This includes commercial espionage on a vast scale run primarily through the government.
2. The US didn't care about China's trading practices until it started to threaten our high-end technology.
3. Trump, who is incompetent and doesn't even under how tariffs works, is trying to use tariffs as a way of bringing the Chinese to heal. In the process he is destroying US agriculture. In addition he has alienated most countries in the world that might allies in putting pressure on the Chinese.
4. The Chinese, backed by a rising tide of nationalism, aren't going to back down.
5. International trade will be a mess for a long while.
Most everything else he wrote was filler. To get a feeling as to who as the advantage in this situation I suggest Niccolo Machiavelli's quote, "The first method for estimating the intelligence of a ruler is to look at the men he has around him." In that case the US is behind the proverbial eight ball.
32
All the commenters and Friedman included are discussing the wrong issue of how to get back on track with China. This is so wrong.
We need to scale back trade with every country with which we have a massive trade deficit. If China wants to have balanced trade with us, fine, but that won't happen.
When we make our own products, two good things happen: good jobs and our GDP rises. It may be true that prices are higher, but that is a complete wash because domestic workers incomes rise which offsets price rises. Money and capital and expertise stay home and circulate in our economy.
Unfortunately, the pro-trade propaganda is entrenched in the academy (I know because I went through it in grad school) as well as the media.
The world, not just the U.S., must go back to semi-autarky. As a tourist now, when you visit a country, you buy tourist stuff not made in the country you are visiting, you buy Asian stuff exported to that country. Global trade based on low labor costs and lax environmental regulation is killing all of us, just like global warming.
6
So is Friedman admitting that he was wrong about China, the world is flat, globalization and yada, yada, yada?
OR is Friedman just stating that he didn't care what China did as long as the impact was job loss in fields he didn't care about but that now that China is becoming competitive with companies run by members of Friedman's class their behavior is a problem.
Those are different things.
11
How about American businesses bring their operations home? No problems then with having to share their intellectual property. Friedman, like Trump, is a capitalistic ideologue. The trade war is not for the benefit of Americans but for the benefit of multi-national American based businesses that want the US government to intervene on their behalf with the Chinese government. They don't want to play by the rules anymore now that the Chinese have greater leverage. Americans are paying farmers and other hurt by the trade wars too. Bring the jobs back, American businesses. Stop the socialist bailouts on your behalf. We're tired of corporate welfare here
9
If a bad person does something good, is it good or bad?
Can Trump do anything good?
When did it happen?
1
Trump should definitely negotiated with China with all allies at his side (UK, Europe,Canada, Australia), but it is too late for that now. Negotiating as equals and promising each other 'equal' access will not work, because China does not believe in keeping such promises - it will cheat from day one. The only hope is to revive the TPP and ask China to join.
2
The United States is not too late. However we are deep in a trade war now which we must win...and win decisively. The keys lie in deft diplomacy with the following parties:
1. Anglosphere. The UK will be desperate for a new trade deal after Brexit and it couldn't come at a better time for our diplomatic needs. Align the UK, Canada, Australia in NZ in our camp with an emphasis on a United Front against China. That's 40% of the world's wealth in those 5 countries (with the US comprising 30% alone).
2. The EU. We must get the European Union fully on board with demanding Intellectual Property enforcement against Chinese companies. It's of crucial importance to them and us. They won't go as far as us on Tariffs but they don't have to. They just have to pile on. That's an additional 20% of the World's wealth.
3. Japan and South Korea. These countries have a bigger reason than anyone to put a check on China. Getting them on board for IP Enforcement should be an easy sell. This is nearly another 10% of Total Wealth in the world.
4. Southeast Asia: Aggressively push manufacturing into Vietnam, Malaysia and Indonesia. Countries with lower wages than China today and a big reason to compete.
With 70% of the world's wealth on our side and a ready made, hardworking alternative for manufacturing at hand China will either fold or collapse....and they know it. Sadly the diplomacy should have been done this way to begin with. But better late than never.
5
Thanks Tom for the broader context and analysis. What's important is these two superpowers act with a sense of urgency and resolve trade differences before it's too late. Note we are in the 10th year of economic expansion and the recession may start next year as most economists predict. Don't add too much fuel to this trade war fire else the effects on world economies will be worse.
The sooner the unsustainable system is dismantled, better for the world.
Staying on the wrong path isn’t beneficial but dangerous.
Adhering to the free trade is as deadly as the endless wars in Vietnam, Afghanistan and Iraq…
Balance the budget and you will see how quickly the entire system is going to collapse.
It means we have to abandon the free trade and replace it with the balanced trade regime.
It means that Trump’s subversion of the trading with China is actually good.
Of course, detoxification of the wrongful addiction will create a lot of discomfort and difficulties, but the dismantling of slavery was equally painful for many.
By the way, have you ever wondered what’s there for those working hard all day long just to ship those products to you?
Isn’t it strange that those having so little are giving to those living in abundance?
No compassion for those permanently living abroad but just for the illegal immigrants?!
If you paid those abroad fairly, there would be no illegal immigrants or need to rescue them…
If you have to force somebody to live in poverty in order to be generous toward them, then something’s wrong with the humanity!
5
Make China Great Again.
Thomas Friedman is locked in his mindset that America must be interdependent on China for it's global supply chain, as if it some natural force or historical certainty. The truth is, it moved there because of cheap Chinese labor and the transfer of American capital, for profit. It is the correct policy to dilute America's interdependence on Communist China...we may need it one day.
5
Google’s security features? Seriously?
Certainly not for consumers where they have stolen our private data -without our knowledge and consent-for their behaviour-predicting software.
Maybe you should read your NYT's colleague Charlie Warzel's 'Privacy Project' newsletter/articles.
3
My impression is Americans have different understandings of trade war. General people think its about trade, while the hawks/populists think it's about "war".
Whe you are not clear about what you want how can you achieve it?
There's a Chinese saying, "if it's just about money, it's not a problem at all." So, on the other side when it's not a problem about money, China might think why would foolishly sign a "trade" deal?
Many people missed the background when last May negotiation fell apart, the secretary , vice president and the strategy lady were all indicating about "civilization conflict"...
I agree with the author's suggestion, reciprocity should be a key to solve the "trade" or "war" puzzle.
1
My impression is Americans have different understandings of trade war. General people think its about trade, while the hawks/populists think it's about "war".
Whe you are not clear about what you want how can you achieve it?
There's a Chinese saying, "if it's just about money, it's not a problem at all." So, on the other side when it's not a problem about money, China might think why would foolishly sign a "trade" deal?
Many people missed the background when last May negotiation fell apart, the secretary , vice president and the strategy lady were all indicating about "civilization conflict"...
I agree with the author's suggestion, reciprocity should be a key to solve the "trade" or "war" puzzle.
3
My impression is Americans have different understandings of trade war. General people think its about trade, while the hawks/populists think it's about "war".
Whe you are not clear about what you want how can you achieve it?
There's a Chinese saying, "if it's just about money, it's not a problem at all." So, on the other side when it's not a problem about money, China might think why would foolishly sign a "trade" deal?
Many people missed the background when last May negotiation fell apart, the secretary , vice president and the strategy lady were all indicating about "civilization conflict"...
I agree with the author's suggestion, reciprocity should be a key to solve the "trade" or "war" puzzle.
1
America thinks long term to the next quarter, while China thinks of the next Dynasty. No one held a gun to head of the American corporations while they packed up their companies and headed abroad. Millions of Americans lost their jobs , healthcare, and pensions while Congress breathed a collective "sigh". China's rise is the result of corporate greed enacted by and then imposed upon the American workforce.
To think corporate America will bring back the factories to our countries shores is akin to believing in Santa Clause. If they make a decision to leave China, it will be to relocate in some other low wage country where they can again exploit their workers.
At what point do the farmers fail due to the tariffs? $15 per acre will not sustain them, particularly when the bulk of the taxpayer monies go to the largest corporate farms, those who need it the least.
China will wait out the tariffs hoping Trump will be defeated and a new President will take a line of trade more compatible to their interests. Out saving grace would be to get back in the TPP, assuming that is possible. That gate might be closed.
Our country and its democracy are suffering under the incompetent leadership of this President and his Republican enablers.
The Pied Piper toots his flute(Twitter) and the lemmings fall in line.
6
Tom, you are more than a little weak in game theory. China is an economic parasite. We don't need them.
5
Trump is thinking it but will never admit it publicly: Nobody knew winning trade wars could be so complicated.
2
And yet - most of the Democrats' presidential candidates have expressed opposition to the TPP, as well. Maybe it's not just a Trump thing. Maybe it's an "America" thing -- and our leaders are all equally lost in the country's rising protectionist fog.
1
Trump’s ignorant trade policy is a symptom of the times. Consider TPP, which was flawed in many ways, but a trade organization that excluded China but had explicit provisions on common IP laws and common labor standards was what we needed. But 2016 was the year of ignorance, and from all quarters (both left and right) there were wild conspiracy theories about TPP’s provisions.
One popular conspiracy theory that helped sink TPP was that TPP deprived “sovereignty” from national governments by allowing corporations to sue member countries. Well, DUH! How do you expect to enforce obligations like common IP and common labor standards? If Vietnam fails to follow the common labor standards and US manufacturers are hurt by it, how do you enforce it? You let the harmed party take the offending party to court. But in the conspiracy-driven internet age, this turned into some ridiculous notion that multi-national corps are going to steal control of countries.
Government by Trump is the culmination of this era where conspiracy theories influence government policy. When InfoWars and National Enquirer shape public policy, it’s not going to be smart policy.
7
Trump may (or may not) have fumbled the execution--but at least he DID it. Big American companies, always on the lookout for the latest sweatshop, made a bet: Capitalism can coexist with a stone, cold Communist/ state capitalist system.
They lost that bet. Tough luck.
One can moan about the current state of the tariff war--but, make no mistake: it's a war. Countries that fail to unite behind these tests of nationhood fade into history. Clear away all the second-guessing and "if I was in charge" wishful thinking--a speciality of Mr. Friedman's--and it comes down to this: you either win or lose. Period.
5
So the United States not only has to be Europes protector from foreign aggressors but also in matters of trade? I don't think so. If the ECU can't get its act together and figure out what's right for them is beyond the US from doing so. Good luck Europe.
So there are people amongst us that subscribe to the opinion that a bad deal is better than do deal at all? Keep on with being robbed and perhaps at some point in time something good will come from it? The Obama administration certainly didn't take any action to counteract China's economic aggression. That was a good thing?
The United States is not at the mercy any other countries for the welfare of our people or our great nation. We have ample natural resources with which to meet the needs of our people. China's economic welfare has come to depend heavily on international trade in order to grow its economy. It cannot sustain its long term growth trajectory without it. The United States has the upper hand; if nothing else time is on our side. It's disappointing that the Democrats and the media choose not to recognize these truths.
4
It is so ironic that Mr. Friedman is asking for an advice how to solve this problem.
I provided him with the extremely valuable analysis 17 years ago, accurately predicting the futility of the Iraq War and the war on terror, the consequential economic crisis, the social polarization and the arrival of the tidal wave of hatred.
Afterwards I predicted that the free trade would strengthen China and weaken America.
I concluded that the export of the US manufacturing overseas would hurt the middle class in the US and undermine their standard of living.
I created hypothesis that the free trade is sustainable as long as we run the colossal budget deficits, even during the Tea Party prominence and the drastic requests for the strict control of the national debt.
The loss of cash here in America due to the chronic trade deficits can only be covered up by piling up of the national debt until the entire system collapses worldwide.
I predicted election of Obama in summer 2007 and of Trump in summer 2015.
I predicted, before them being sworn in, that both of them would betray their base.
However, all those skills weren’t enough to have a single op-ed published by the NYT…
5
It won’t happen but a mediator is needed to find a workable compromise
So, while our farmers are reeling from Trump's inane trade war with the country he himself has acquired over 40 Trump trademarks and has sweatshops where he has manufactured even his campaign rally banners, just ask Russian farmers how THEY're doing now that China is buying soy, corn, and pork products from them these days instead of us.
His hats should have "MRGA" inscribed on them.
1
You cannot realistically ask a country to change its core philosophy. Why would they ? We wouldn't yet that is what Trump and his team are foolishly asking. It's nonsense. It won't work. Ever. Another approach would be to build a coalition [where we make most of the rules] to key China at bay. You know like the TPP agreements. Nah, Trumpy can do it better. He's always winning ! Mr. Bankruptcy is doing his best to take down the world economy.
1
The discourse about this most important topic runs way to much along party lines. On thing is clear to anyone who Has been paying attention to what’s been happening the last forty plus years, the blame stretch’s across the aisle from Reagan union busting to Clinton and NAFTA. Thomas Friedman was at the forefront of the push for globalization, don’t believe me, read his The World Is Flat. To suggest Trump and Xi are the cause much less capable of fixing it through dialog is ludicrous. China is to big to be dealt with any other way than through tariffs, politicians had decades to “talk”, instead they took big money from the tech sector and banks that has allowed inequality not seen since the dark ages arrive at our shores. Europe didn’t do much better. We have been spending trillions on wars for Oil and Israel for decades as our infrastructure crumbled and the working class was sold out by off shoring jobs and unfettered immigration. There was a suggestion that American Companies would end up with billions of new consumers or at least that’s what the proponents of globalization promised, they were lying, there was never the possibility that China would be happy making t shirts, the China 2025 program should dispel that big lie, they won the economic war without firing a shot. Thanks to both parties. We can have a serious trade war, cough up a couple bucks more for t shirts, a bloody revolution or a UBI as suggested by candidate Yang, jobs aren’t coming back by playing nice.
5
@Ted There is an excellent article on Universal Income in the July 18th issue of London Review of books by John Lanchester if anyone is interested in an in depth look at UBI as well as a more balanced narrative as to how we have gotten to the point o suggesting the need for obe. Ted August 7, 12:31
2
I do not know why anyone cares what anyone says if they supported the US Invasion of Iraq. Friedman, Clinton, et cetera - dust bin of history as being completely wrong about the most momentous act of the past 50 years, other than not responding adequately to climate change. The less material the Gulag of Communist China produces, the greater our diminishing chances of surviving climate change. Maybe poorer, with less stuff, is better.
Erudite and interesting is , but a reliable prognosticator, no.
3
Typical Trump...tear things up, without ever having a plan -- let alone a strategic plan -- for how to replace what he tore up. Into the void caused by his destructive actions goes chaos, instability, and tremendous risk.
This is how he handled the TPP, the ACA, and the Paris Agreement. All he really makes is an America that's less safe and less intelligent.
4
With Xi help, the Democrats can win in 2020. If Xi can stay strong and make no deal until after the election in 2020, the Democrats can retake the White House. Xi and the Democrats is a winning formula.
@P&L
let me repeat you words:
"With Xi help, the Democrats can win in 2020. If Xi can stay strong and make no deal until after the election in 2020, the Democrats can retake the White House. Xi and the Democrats is a winning formula."
And Trump should be impeached for conspiring with Kremlin in attempt to harm America...
4
If we are lucky the coming recession will be mild and short term. I doubt we are going to be lucky. This is the result of a President who thinks that trade wars and currency wars "are easy to win" despite the evidence of history that the exact opposite is true. Trump saw that he could bully Canada and Mexico into concessions and ignorantly assumed that the same tactic would work with China. But when your dealing with someone who is almost as big and powerful as you are insults and threats don't work.Trump followed the advice of a few obscure economists and went half cocked into this trade war. All the Trump supporters need to look at the evidence. Trump was 100% wrong about easy wins. Yes, China will be hurt by the coming world economic crash that Trump instigated but between Trump and Xi Jingping who has an election in 2020 and will have to explain why the economy is in the dumpster?
1
At what point do we force China to stop stealing our technology and copy rights? Historically every president continued to say that China is such a big market, it is worthwhile allowing trademark and IT theft. At some point it has to end. Although the current methods are ham-handed, maybe ill conceived, it is at least an effort to address the situation. Assuming that many factories shift to Vietnam, Mexico, etc. as low cost places of manufacture, it only helps our manufacturing base in very small ways. It does bring back rule of law from an untenable situation, and that is a step in the right direction. Short or mid term pain for a longer term gain for the US. Why allow any trade with a country that institutes state sponsored theft, and has for decades? If Obama was doing this, then Republicans would complain about the pain being suffered. Some of the same more liberal editorial writers of today might have taken a lighter approach, maybe on the grounds of China having concentration/re-education camps housing hundreds of thousands of people on a scale not seen in many decades.
Clinton, Bush, Obama, etc all failed on bringing China into the world market and following any kind of rules.
1
China has been growing exponentially for years, with the help of its inelegance apparatus steeling our technologies. I understand the need to stop that but a trade war and casting China as a currency manipulator will only result in what happened, China lashing out. Trump has no diplomatic experience, nor has he ever had to negotiate with the Chinese on large deals. Buying ties and cosmetics is small potatoes. Making global policy is something way outside his wheel house. Both sides need to calm down and have their experts meet to discuss what can be done without threats. if they continue along the current path we will be thrown back in time to a time where it was every man or woman for themselves and that is not where we as a modern society want to be. It will only result in everyone losing.
2
You've got it right, Tommy. Trump's economic trade war can have negative effects everywhere. If China's & the US economies slow significantly it will be felt in Asia, Europe, Africa & the Americas. It feels to me like Trump is railing against these global inter-connections. Nothing he is doing points towards improving them.
Mr. Friedman made a mistake when he said that the way things are going, we could end up with a "two-internet, two-technology world: one dominated by China and the other by the United States." If trade is the issue, and under the current administration it's the only one that counts, it's not clear that the United States will be dominant in this arena. Doing so would require a couple of things, neither of which I think are certain:
1. A continued strong U.S. economy. There are subtle signs that a recession is on the way. Will it be deep enough to de-throne the U.S. as a world trade leader?
2. The ability of the administration to negotiate multi-party agreements. The administration quashed the TPP and delivered a warmed-over version of NAFTA. Anything more ambitious than than NAFTA is probably beyond its vision or reach. How, then, can we expect the U.S. to remain dominant?
The disdain for and prejudice shown in the language used to depict China is truly frightening to me and the prejudice against a China that can easily be worked with as a diplomatic friend will prove self-defeating. I am truly saddened by this column and most comments.
2
Didn't Trump need Congress to approve the TPP in order to sign it? Congress did not approve the TPP during the Obama administration. The TPP was fast tracked so Congress had no opportunity to modify the agreement, it had to either approve it or reject it. The votes to pass the TPP never materialized. The TPP was a bad agreement because it lacked proper environmental provisions and it would have potentially allowed foreign investors to overturn US environmental laws which investors call trade barriers. Whatever you call them these laws are important for protecting human health. The US should not be signing on to trade agreements that can undermine US environmental laws
4
White supremacy vs. Han supremacy...oddly only the communist side understands capitalism/economics.
1
Are the Democrats working some backdoor diplomacy with China? It certainly looks like it.
Has Xi promised the Democrats a win in 2020?
China desperately needs to get rid of Trump.
Has Xi all but promised that Trump will be a one-term president if the Democrats go along with his deal?
All the Democrats have to do is lift the tariffs once they take over the White House.
Is Barr looking into this?
2
The TPP may have been a wonderful way to counter China, but it had virtually no chance of being ratified in Congress. Trump’s support would not have changed this fact, witness his inability to get his revised NAFTA agreement moved in Congress.
The suggestion for trade negotiations based on reciprocity is also a great idea, but isn’t this what we’ve been trying to negotiate all along?
It doesn’t take a village to understand what China is doing.
You just have to be a little bit smarter than the Bushes, the Clintons and the Obamas.
Trump doesn’t understand what he is doing so he instinctively fights in the complete darkness without any plan. For God’s sake, he is just a celebrity and businessman, thus deprived of the long-term vision.
China is the admirable opponent.
We should embrace their patience, stamina, energy, strategy and team spirit. It is completely opposite to our divided, polarized and antagonized society. Tragedy is that we have been split up by our elected officials, political parties, and free press.
If we still construe those tragic conditions as freedom, liberty and democracy, then we don’t understand the true meaning of those words.
If used improperly, all the aforementioned terms belong in the same category: the old-fashioned stupidity.
Back to China.
To understand them better, let’s remember “The Long March”, the 6000 miles trip on foot to avoid the dire conditions and create better future.
Nothing has changed in the meantime.
Beijing’s strategy is three-pronged.
First they wanted to get our industrial base and rebuild own infrastructure.
Check.
Then they wanted to master the most sophisticated technological knowledge.
Check.
The third objective is to replace the dollar with the yuan as the world currency.
Slashing the value of Chinese currency is just a first step on that long march!
Beware of check-mate!
6
The losers will be the consumers. Somehow big business will survive and thrive, the oligarchs will get richer and the politicians will continue to do their bidding.
5
Everything Trump has done and is doing causes some form of destruction. His past if full of bankruptcy, business failures and ripping people off. Now he is separating families, spreading racism/hatred and stoking the lone shooter fire. Why not risk the whole U.S. economy and blow that up too? I don't think anyone in history has stood by and watched Trump fix anything.
3
If somebody has a better idea, put it out there –
Alright, I have an economics degree and been in the work force for a long time. Some thoughts
There are inherent conflicts with a communist system and a capitalist system. The communist system integrates state support for companies on a far greater scale than does the capitalist system with its tax breaks to provide incentives for companies.
In this scenario it is hard for companies to compete, but a particular sore spot is the stealing of intellectual property. I have owned stock in companies that were displaced by these practices. There was nothing much they could do.
What does that situation remind you of a little. Well, think about all the musicians and artists who were having their creations being given away for free over the airwaves while the ‘Government/big radio’ stations over state supported airwaves made a lot of money and advertisements.
What was needed was something at a national level. That is where ASCAP came in. (American Society of Composers, Authors and Publishers) . They worked out a deal, where essentially a count is kept on the numbers of times recordings are played on a given station and then a central site works out the distribution of moneys to the artists who are payed in for having their records played.
China should set aside money on a national scale and where intellectual capital has been appropriated a reimbursement should be given.
This is just a rough outline – but you asked for ideas 😊
1
@Ben Ross
Interesting idea and a possible part of a solution, not a lamentation
There will never be an agreement with China if President Trump precludes every meeting with a twitter barrage of insults to the Chinese. Making the Chinese "lose face" is the worse tactic imaginable. I see no possibility of an agreement unless this tactic, if it can be called that, is ceased.
4
The USs and other country's multinationals corporations wanted cheap labor. The fantasy China market that set imperialists hearts a twitter seemed at last here with Deng's reforms. But greedy profit hungry corporations gave up huge chunks of manufacturing to the Chinese. The new hi tech information age made it easy for China to move quickly from down trodden third world doormat to trade juggernaut. Stealing corporate secrets and using currency and trade shenigans the Chinese arrived with sharp elbows. Trump's trade war and unilateral actions has the world up in arms because of his arrogance and ignorance. The international situation is one of danger. India annexing Kashmir into the Indian political system and the rivalry between China and India put the incompetent Trump in a tricky situation. Which his big mouth can only make worse. China supports Iran's efforts to get around Trump's unilateral economic war against Iran. Trump has done more to make inevitable the collapse of the USs dominance over world's finance capital policy. Trump's repudiation of the Iran nuclear deal, the Paris climate change accord, and the Asian trade treaty negotiated by Obama are terrible for the US.
3
It all depends on what happens in the next six months.
All I have to say is that China is no more a "communist society" than the USA is a "democratic society". China is a class divided society, communist society is a classless society by definition. And no democratic society would elevate a crime family whose boss operates under cover of white supremacist memes to the highest office of the land.
Indeed, no democratic society would have a quasi-Napoleonic institution such as the Presidency, nor the deliberately antidemocratic Senate and Supreme Court. All are legacies of European late feudalism.
Most Americans forget that China is our creditor! We owe China trillions, do we really want to make them into our enemy? What would happen, if Xi called in our debt, just for kicks?!
I expect a Trump Recession is on it’s way. Typical Republican president inherited a thriving economy from a Democratic president, raises the national deficit and destroys the economy!
So much wining!
2
Many more trillions of debt are held by Americans. The dollar would go down if they did that. Who would be happy
Yup.
The short version is Trump was right to take on China, but he should have gone into battle with all of our allies rather than going it alone. And now untangling the whole mess is gonna be complicated and hard to do. Duh...
As usual, Mr. Friedman is spot on.
1
Mr. Friedman. The answer to your question as to why we are where we are is number three of your alternatives.
We’re too late, and they’re too big.
In any negotiation, which M.Trump should have learned at Wharton but didn’t, is that both parties have to feel that they gained something in order to achieve a win-win situation.
Not only are we too late and they’re too big, we want concessions from them, but they no longer need anything from us. We are the beggars now. Blame corporate America for this.
And beggars can’t be choosers.
What is Mr. Trump hoping for? To bring our case to the WTO and win? Good luck with that. China owns them too.
As anything and everything that this Wharton-uneducated man touches, he will achieve nothing but bankruptcy.
Meanwhile though, he will continue going to his rallies and, acting like the mouse walking side by side with an elephant in the desert, proudly pronounce to his followers: Look at all the dust WE make.
3
Here is a better idea. Any middlingly rational and informed person could step in Trump’s place and get a deal done.
I am a huge fan of Obama but I fault the Obama administration for not being able to articulate the purpose behind TPP before and during the 2016 election campaign. In fact, Hilary Clinton was so out of touch with it that she reversed her support of TPP towards the end of the campaign and she was secretary of state! The next president needs to do a much better job of communicating to the average voter what is going on and why they need to support it and tailor the message so Americans can understand it without getting too wonky. Dems need to win the center of America because that's where the senators are. We need to reduce our dependence on Chinese manufacturing just as we reduced our dependence on foreign oil and energy for national security reasons.
3
Friedman makes a really key point - China's next level of development depends on being a trusted partner. For example, many countries including the US and Australia will not put in Chinese 5G technology because they believe that the %G technology from Huawei could be used against them at a later date.
Maybe the better solution is to create broader transparency of the core technologies that are being embedded in the world around us. If new standards of technology transparency could be created it would not be just China that has to change, but also leading US companies. In aviation, we have the FAA, and its international equivalents to provide enforcement for aviation safety. Maybe a similar institution may be needed in core technology to ensure technology transparency and verification. Something we all need in a world that is constantly changing around us.
1
The statement that there are two protagonists, neither of whom want to lose face, is what may well be the thing that protracts this standoff. The way things are now, only one would be considered to be the winner. Hopefully this doesn’t end up being a Pyrrhic victory for either the U.S. or China, where the final losses are so great that the winner is really hard to find.
The trade relationship between China and America has in recent years become complicated. For decades, the relationship was of a poor country and a rich one. As the author of this article summarizes it, "America bought T-shirts, tennis shoes and toys from China, and China bought soybeans and Boeing jetliners from America."Chinese companies were given significant preference over their foreign competitors, with foreign companies having to give over trade secrets to the Chinese government. The companies profit, so little fuss was raised. In recent years, China has strengthened and modernized, becoming equal to America. But the unequal relationship has stayed the same. Foreign competitors are unable to compete with government-backed companies and are shoved out of the Chinese market, while Chinese businesses have free access to America. This balance was in dire need of correcting, of a transformation into a relationship of equals. Trump had the right heart when he confronted Xi Jinping, the Chinese president, about the unequal trade relationship. Other countries have been wronged by China the same as America. If Trump had unified with those countries against China, the trade war could have been won before it was begun. Instead, Trump saw the situation as a chance to prove America's might and brazed through alone. Now, instead of the world vs China, with China quickly being made to play fair, it's a tit-for-tat trade war between America and China, which benefits no one.
China is not “being made to play fair” ....China is playing Trump!
I suspect Chinese economic hegemony is already the baked-in reality for the next fifty years. That’s because China has systematically invested—and that investment in factories and people is now paying dividends in the form of high quality, lower cost products.
Meanwhile the US has disinvested or underinvested. And at the same time we have spent frivously—double what everybody else spends on health care and an order of magnitude more on weapons. That spending is a self-imposed handicap—and to be clear, it is spending, not investment.
5
This political approach toward state sponsored investment, will probably define the winners and losers for the next few centuries. On one side, China is investing at the national level in industries it is calculating will be the future. While on the US side, we are trying to erode the very idea of state sponsored investments. Our grandchildren will learn which political philosophy wins -out! Privately sourced investments in the technological future vs govt investments in the technologies of the future. I hope I’m here to see the outcome.
Let's remember trade between the US and China did very well until trump came along. It fulfilled the requirements of both parties: China profited and the US received goods at a cheaper price. Naturally, when knowledge of complicated procedures is involved, as in cell-phones, information must be divulged. This has falsely raised cries that technical information is being "stolen" by China, when it is a practice indulged in often in matters between nations and between producers in the same industry.
Using American workers, whose income has stagnated while industry utilizes cheaper Chinese labor, is not favored by the business class here. A trade war can easily be avoided by utilizing American workers, paying a little more, and leaving the Chinese out of the picture,.
3
A lot of people have been waiting for the American laissez-faire system, with all its brutality & indifference to unforeseen consequences, come tumbling down. The man without a plan approach has devastated resources, blocked the development of solutions to problems it had created, has been as backward as Stalin in the implementation of new, more efficient technologies & has forced people to live in the thrall of dictators that plundered instead of ruling. I personally never thought we would see the day that 99% losers capitalism would hit the skids. I'm not sad to see it go.
China, and every other country, should know by now working with Trump is like working with the Mob. He makes up the rules as he goes making useless threats and ignorant blunders.
4
Poor Trump. He has his biases that he learned from his daddy and is too stupid and incompetent to figure out if any of that "learning" was true or not. Mostly not, of course. He keeps bumbling along trying to get the upper hand but he now he is not scamming his local contractor or lying to his bank. He is dealing with another country that is intent on being the equal of the US. They will not back down and they have many more options that Trump does. The fact Trump is hurting the US economy does not occur to him because when he makes things up he actually believes what he is saying. The rest of us know he is lying but because the Repubs are so intent on keeping power they will not challenge him. They would rather see the country go down than relinquish power. Remember how the Repubs sabotaged Obama at every step when he was trying to start the recover from the Bush economic disaster? They were quite happy to keep the economy down for years just to spite Obama and keep him from getting any credit for the recovery. Repubs are that corrupt. And Trump is even more corrupt.
6
I live in China: here is a little snapshot of life downtown at a big City in central China. I just went to get a bottle of water at a convenience store; in the store there were dove bars, snickers, Budweiser beer, even Tide detergent and Colgate toothpaste. The kid behind the counter was playing with his iphone.As I returned to my apartment in a huge building, I passed a Burger King, a Subway, an Apple store, a Pizza Hut, and a KFC. This is literally on one block.
So we're having this trade war for no discernible reason than Trump's narcissism. Yes, China gives certain companies subsidies. So does the US! It has for a long time. But why would you want to pointlessly alienate a 1.2 trillion dollar market?
Another thing that is often unmentioned in this; Chinese people remain interested in learning English and American culture. Every semester the enrollment in English classes has gone up - it's really almost a pain. I first was teaching 500 students, then 600; next fall 700. Superhero movies like Avengers are hugely popular here, as is NBA basketball (my students take English names, often taking "LeBron" or "Kobe").
This trade war is really, really stupid.
8
Xi is not a fool. Unlike Trump, he understands the position is not good. However, similarly, he is not in the same position politically as Trump. He understands that all he has to do is exert pressure on the US to damage it's economy just enough to get to Trump's base - which is happening right now.
And in 2020, his problem goes away when Trump is deposed and they can negotiate with someone other than an unstable narcissist. Trump has no leverage. He's like a gnat in the room about to be swatted. Why would China negotiate anything at this point when the next US president is guaranteed to reverse anything Trump spins up?
3
What I find astonishing is that I trust Xi more then I trust Trump. Trump losing a billion dollars........the highest in American history, should be your first clue. This cant end well. 2020 SAVE US!
3
So...to spite Trump...you would have us throw our manufacturing down the toilet. China has been CHEATING on trade for decades. Obama's team knew this. We have to do this now, or it will soon be too late.
2
China lost it's dependence on the US when it developed its own internal markets. It was only a matter of time before China could act independently because of its growing economic size.
Couple that with the fact that multinational capitalism has no patriotism and you get US corporations selling out themselves for the sake of quarterly profits.
China has a long term plan and a reasonably stable government (never mind its authoritarian rule). The US is led by an ignoramous and a dysfunctional Congress. While we chase our political tails, China is building its economic and military links around the world.
China smart. US stupid.
3
Trump will cause a world-wide economic collapse with the next idiotic thing he thinks of. Our country--which people mistakenly think should be run by "businessmen"--is being run by a four-time bankrupted loser who couldn't even get a casino to make a profit.
Government is NOT "business." It has too many other factors that have to be considered. And it can't be run in a fit of pique by a immature, childish buffoon.
5
The fact that "trade with China has made America richer" might be indisputable, but it depends on "what the word 'America' means." Balance out the millions of jobs lost (by average Americans) with the $billions made by the top 5% in the transfer of manufacturing to China. Then add back how much the average folks saved in cheaper Chinese products. Work that little formula, and it is obvious that average Americans came out on the short end of the stick. Way short. And of course the anti-union crowd (same 5%) did very well too.
2
China sees trade as a zero sum game and will not make any concessions. Trump tried ro make a deal and even feted Xi at Mar a Lago to no effect. It's time for tough action. Steep tariffs and quotas on Chinese goods. It's time to bring the factories and jobs back home.
19
@Eric And President Trump doesn't see everything as zero sum? Hello- I think the main thing people have to do is start paying attention and maybe even applying a little logic and thought to the pronouncements from both sides.
18
@Eric By definition, fair trade is always zero sum. Anything else is a bad trade.
3
@Eric Will you make concessions if someone started a fight with you and keeping pointing a gun at your direction?
9
Good column, Tom. Right on about TPP and working with the Europeans.
As usual, Trump oversells and under-delivers. He doesn't know anything about business, seriously.
5
Mr. Friedman,
You make the usual mistake of assuming a Communist dictatorship and an open democracy should be considered in the same way. Not one of China's neighbors trusts them or their currency manipulations. The US does not need the TPP to get what it already has, the grudging trust of all of China's neighbors. They will do business with the US because their sovereignty and national interests will be respected unlike the rapacious designs of the dragon. Much as you hate this fact, the president has alerted the country to the dangers of being an international sap because CV elites say so. Capital is flowing to America again, whether tariffs or investments. The owners of the capital know its safe here and not at the whim of rope selling Communist bureaucrats with their fingers on the scale.
1
Tom Friedman ignores the harsh reality of the depth of China's intellectual property theft and the barriers it set up to US companies selling their products in China.
As a patent attorney, I know of law firms and corporations who were spied on by the Chinese. They stole trade secrets from companies such as Alcoa. They also forced US companies who wanted to do business in China to "share" their intellectual property.
Furthermore, they targeted US industries for extinction, manipulating currencies, using slave labor and undervaluing the yuan to get an advantage in the US market.
The only products China bought from the US are those that China absolutely needed. China set up as many barriers to US industry as it could, and required those companies doing business in China to manufacture there.
China routinely violated trade agreements foolishly negotiated by Bush/Clinton.
China used its new found wealth to bully its neighbors and to claim the China sea as part of China.
We sent millions of jobs and trillions of dollars to China. The US white working class suffered greatly. Just travel through Pennsylvania and you will see town after town that lost their factories. The locals often turned to drugs and suicide, particularly as the US government and the Democratic Party ignored their needs. Only now under Trump are they doing better.
The callousness to the working class expressed by Friedman & the left will thankfully give Donald Trump another four years.
100
@Jonathan E. Grant No one pointed a gun to the companies heads and forced them to move production overseas; it was the American consumer who wanted cheap products and did not want to pay for the Made in America brand, plus there were some quality control issues (e,g. automobiles).
133
@kj Right, but China did not honor the agreements they made with those companies. Some companies less than others - huge companies like Apple were treated better, whereas others like Facebook and Amazon were copied kept out. Smaller companies went in believing what they were told by the Chinese, only to get squeezed out once the Chinese figured out their operational basics.
24
@Jonathan E. Grant
Yes, the current crisis between US and China started with the robbery of the American technology from the Chinese side with different techniques like the forced association of the American leaders with Chinese partners.
13
What we’re seeing in Hong Kong will be coming soon to America. People who are completely fed up are going to take back power from all the corrupt and soulless leaders who are responsible for wrecking our world. Revolutionary change is coming...
204
@L'historien
You’re absolutely right, my friend. See you in the streets!
14
@Zareen
It can't come soon enough. The revolution of the sixties was still born because both political parties colluded to destroy it and build a right wing central government in its place. Todays revolution has not started but already both political parties are positioned against it with the exception of a few liberal outliers as in the sixties. But when revolutions really get moving the death squads come out and in the sixties every liberal leader was gunned down. Today I see all the hopes pinned on Bernie and Warren and AOC but if that tiny group suddenly disappeared the revolution would go with it. So how are you going to protect your revolutionary leaders against the right wing death squads this time? I suggest taking the danger seriously from the beginning and building a left wing paramilitary base that can reach out into any state and intimidate the right wing enough to foreclose their usual habit of depending on violence to win. The lesson of the sixties is that politics is all about intimidation.
18
@Zareen
The protest in Hong Kong is based on three factors: (1) A genuine desire for democracy. (2) Many people, especially the younger generation feels disenfranchised because of huge income inequality. (3) The dark undercurrent of this protest is Hong Kong "exceptionalism." Hong Kong people feels superior to their formerly "poorer" neighbors in China and they see that their "advantages" are ebbing. Therefore, the situation in Hong Kong is complicated. Because their demand for democracy and economic justice is only for Hong Kong, there is absolutely zero support among people inside China. In many ways, Hong Kong protesters cannot achieve their aims without first shedding their own prejudice . America should support democracy everywhere including Hong Kong but our influence is very limited. Do not hope that the situation in Hong Kong will come to America. If we protest and strike peacefully, it is within our right. The mobilization of People's Liberation Army to Hong Kong is a likely endgame resulting in many people being hurt and Hong Kong ruined. Hong Kong cannot change China by rebelling this way. Do you think that less than 1 million hardcore protester can withstand a 1 billion people nation with an army? I grew up in Hong Kong and care about its people. I hate to see young people in Hong Kong committing political, economical, and physical suicide just like how I hate to see Trump taking America into global geopolitical suicide.
8
Sensible and insightful, as usual. I have just one cark: "Google's version of Android." That is like "Toyota's version of the Prius." Google created Android!
Does anybody remember that the first voice against the TTP was Bernie Sanders? When he got traction on the idea Trump and Clinton both jumped on board. One of the reasons I'm not a big Bernie fan. The TPP was built to provide a united front against China's economic aggression. Trump tore it up and here we are. And for added fun we have the person least likely to find a way out in the Oval Office. Fasten your seatbelts.
1
All points well taken. Even with the "both sides" argument.
Trump never apologizes. He may backtrack, but then he'll say or do something to undo his backtrack. Plus, he can't be trusted.
So I'm not expecting any of the suggestions you've made to be taken. You may get better ideas from economists and others living the reality-based universe. We can't count on any input from the RW. As the meme floating around the internet asks: How many Republicans does it take to solve a problem? We don't know. They've never solved a problem.
That said, and assuming a Democrat becomes president in 2020 and that China is at the top of the to-do list, what's the new president's first step? And this is now 18 months down the road, tariffs still in place, and China not buying any agricultural products from the US. How do you repair the damage?
Let's assume a Democrat wins the 2020 election. Let's also assume that repairing the US/China relationship is at the top of the To-Do list.
1
Ironic that China invests in its citizens, educating its best and brightest at new universities that didn't even exist 10 years ago. In previous generations, American political parties on all sides of the aisle valued learning as the road to progress (and the wealth of the country); they worked together to build flagship state universities where every kid could be educated and contribute to success of the country. Our history is replete with good minds developed this way, leaders who came from average roots to make great contributions.
Since Reagan, the GOP in the legislatures have demanded our universities subsist on a fraction of their former budgets and have 'gig'ed faculty jobs to part-time. Development departments spend every day begging and stroking the wealthy 1% to support basics like renovation of old labs. Meanwhile, Chinese students have state-of-the-art facilities and if they do come to the U.S. for graduate school, they do so on full scholarships provided by their country. Of course the U.S. will lose this war. Our wealthy in their enclaves value yachts and compensatory space races rather than investment in the country that gave them their shot.
7
I have a very close relative who worked for a large corp. and was stationed in China.She told me that they knew China was stealing their tech."secrets" except they were not so secret anymore.China was getting yesterdays technology.They went along with this because they hoped and still do hope to get access to China's huge ,emerging consumer market .That market is estimated to be 400 million..more than the entire population of the US.The total emerging Asian market is estimated to be over 1 billion consumers.We are not the only or the biggest player any more.China trades more with the EU.The TPP would have put the brakes on this..for awhile.Time to negotiate a new relationship..with real negotiators.Trump's supporters believe that is was the US government that decided to move to China.As you point out,it was the CEO's who decided to make the move and lobby for more autonomy.They have a hard time doing anything without the comfort of having a monopolistic stranglehold on any market they want to operate in.Just as they do in this country.
You mention Trump's "core instinct" being right.I think his "core instinct" is to tear up everything with the belief that he can do better.The TPP was not perfect but it was like Obamacare..not perfect but a good start. Trump will quietly back down and,at the same time,tell his supporters that he has achieved a "great deal".He did the same thing with NAFTA and got the publicity he craves.When the "stable genius" strikes again..everybody loses.
6
The trade war is causing secular changes that cannot be easily reversed. The most prominent loss is to America's farmers whose crops are being replaced by Brazil and Russia. Given the huge investment China is making to secure new sources, there is no reason to revert to IA when/if Trump's trade war ends.
Another secular change is impacting Boeing. China has ratcheted forward its development of the C919 airplane to permanently replace Boeing.
Had Trump researched his gambit before starting the trade war, he could have anticipated China's moves and thwarted them. But Trump relies upon gut feel, not research and logic.
By now, every major corporation would have fired a CEO with such poor performance as Trump but we're stuck with an archaic, paper ballot, 4 year hiring system that cannot respond fast enough to a disaster like Trump.
And if the oligarchs can hack the ballot box, we may be stuck with this incompetent madman till our complete demise.
3
@Joe Farmer If farmers hadn't voted for Trump we would be in this mess in the first place.
1
Good points, but most of the blame for this trade disaster is Trump and his staff. It appears Trump or his negotiators are familiar with Chinese history and how the Chinese people was humiliated by the West.
Also, communicating incoherent public policies in social media, treaty withdrawals, spats with allies, bullying other leaders with no Plan B leads to disaster in a global economy. It is going to be difficult for the next incoming administration to correct Trump's mistakes.
2
I see national wealth as irrelevant. For example, China trade undoubtedly made the US much richer. But that did not flow to the majority of voters, at least in swing states that decide the election. I doubt it flowed to the majority of Californians, most of whom live in relative poverty. Educational outcomes in California have also done poorly over that time. If people like Thomas Friedman and me made money in the stock market, that is irrelevant because we are not a large voting bloc. He’s forgetting that. The national wealth is irrelevant. It is the wealth of the median family - after health care cost, after college tuition - that describes their real living standard. One this measure, China trade has not been beneficial to western countries. Visit Cleveland or Buffalo NY sometime and take a look. Visit the rural 75% of America. Take a look. The money held by Thom Friedman and me and Jeff Bezos is not relevant there.
3
"We should say to the Chinese: ‘You now are our economic equal.’ Give them that dignity. And tell them we want to restart these negotiations on the basis of total reciprocity. We should both have the same rules of access to each other’s economies."
Isn't this what Trump, however poorly, is doing?
The problem is the Chinese do not want to give and more importantly WILL not give the same rules of access to their economy as they demand to everyone else's.
3
This piece neatly describes evolution of the US-China economic relations and the harm of annulling TPP, even though it was far from perfect, particularly in the eyes of the US labor unions. Thomas is less convincing about what can be done going forward. I think splitting the world economy into the US-centered and China-centered hubs is inevitable. Think about never ending Boeing and Airbus competition on the global economy scale. The question is if the new US administration (hopefully in 2020) will be able to repair its relationship with Europe and Asia to ensure that the US-based hub prevails.
7
Reciprocity won't work. China's system is too different from ours. That is the nub of the problem. Things are apparently run on a top down arrangement. But I believe differnt provinces and cities have their own political feifdom's. China is a nation of people, not laws. So China would have to change it's system in order for some type of reciprocity to work. I don't think the system will change so fast if at all. For example, is China suddenly going to respect intellectual property laws? And will it legally prosecute those who steal intellectual property. This is the problem we are having. We need to have negotiations and U.S. negotiators who know the Chinese system inside and out and who also, and this is important, know how things actually operate on the ground. For example, local officials could deny permits to U.S. companies or even deny them electricity. These things all have to be considered. I don't know if Xi Jinping is in a position to just "order" that necessary changes be made. So this is a tough as nails negotiation for both sides - because we have different systems. But I agree that the status quo in trade between the US and China has been going on much too long and we now have to strongly work for a system that protects U.S. interests. One other thing, multinational companies often could care less whether they are American or instead based on some tax haven island somewhere. Much of the time, all they care about is profits-not allegaiance to a particular country.
5
Majority talents in US do not study engineering. They are going to law, business, and medical schools. It is common practice that the country steals other's technology including US when it stole from UK. For the companies who are forced to share intellectual properties, they can choose not to do business with China. There must be advantageous for them to do so. You can NOT get all you want without cost. It is unfortunate for these who only has high school diploma and still dream of good jobs, the technology has advanced at such a stage that a robot has same capacity as your skills.
1
Game this dynamic out, revealing that Tom is right but no solution will fix this wicked problem. If Trump, backed by his fans, wins 2020, civilization will be challenged as standards of living deteriorate. Meanwhile, planet will heat up: downward spiral. Pay close attention to the logic Tom applies here.
2
So let me see if I have this right. It was ok and ethical for US businesses to close manufacturing facilities and tell US workers to take a hike, but in return for all that cheap labor they were getting in China, the coin of admittance was intellectual property theft which they might have in some cases willingly gave away; and copying by the nefarious Chinese which isn't ok. Right!
Then those same nefarious Chinese occupied islands and built airfields on deserted islands and rocky outcrops which no claimant was willing to do. That wasn't ok. This was called illegal expansion in some quarters, no matter that we have bases almost completely surrounding the Chinese, look at the map folks, but that is ok.
In addition the Chinese in response to tariffs, stopped buying US agricultural product, accepting garbage, etc and lowered the value of Yuan, not ok, but in reality any costs of Chinese goods making it through the embargo would be necessarily cheaper. Of course the US calls this currency manipulation and US actions as a result ok.
Finally ok to subsidize US farmers for government actions in the market place, not ok to spend government dollars on healthcare. Ok?
7
A prosperous world only for a minority of people, while more than half of the population is struggling to make ends meet. This well documented inequality is mostly a consequence of a mishandled globalization that has undermined the livelihood of workers in many countries of the ‘first world’ while shoveling all the profits to the corporations and their beneficiaries. So redesigning globalization is actually an important step in the right direction and a temporary freeze might be necessary to create a system that is more fair and sustainable for all peoples and parties involved. I’m generally not a Trump supporter but in this case something good might come from the destruction of an ill conceived system.
3
"....Trump and Xi should drop everything and sit down to resolve this crisis "
Seriously? You throw out Trump's name as someone with an administration to resolve ANYTHING? Be real. I'll bet he hasn't read a single briefing from his State department since taking office. Maybe you should aim your suggestions to "Fox and Friends" because that is HIS only true source of intel.
7
A good start would be for "Tariff Man" to fire trade hawks Peter Navarro, Wilbur Ross and Larry Kudlow. I consider Steve Mnuchin the only adult left in the room. There are reports Mnuchin and Navarro despise each other, and there have been several shouting matches.
Trump should listen to Tom Friedman, one of the reasons I subscribe to NYT.
5
If Trump and Xi can make America and China poor again, then they are equally capable of making those two countries wealthy again.
The prerequisite for the aforementioned is the existence of two mythical individuals capable of creating enough wealth for almost two billion people.
That’s the best fairy tale of the third millennium!
Trump + Xi = Santa Claus!
2
Trump is the proverbial elephant in a China shop. Subtlety is not his style. He has to brag, insult and demean every opponent. TPP was a solution, but it was clever and it was stamped "Obama", and Trump would rather harm USA if that will diminish Obama's achievements as president. Xi will not back down for many reasons: ideological, political, cultural, historical, economical. He is not going to abandon his 2025 plan either. How will this end? It is possible that Trump will inflict so much pain on our country in the next year that some of his supporters will abandon him and the rest will be willing to vote for whomever the Democrats nominate. Don't forget, Trump has bankrupted every business he had, why not the country?
9
"U.S. stocks seesaw as global trade fears spark overseas rate cuts; Dow plunges more than 500 points"...........
God forbid Trump finds any more problems to solve.......He's done more than enough damage solving this international trade one.......
Sometimes proclaiming oneself to be a "genius" just isn't enough........the fool must show everyone just smart he is - or isn't......
6
Better idea? Politicians controlled by elites that flourish on capital gains and tax avoidance, sucking wealth out of the general population, is not a good idea. State controlled single party economics that stifles the independent thought and innovation of a billion citizens is not a good idea. Better idea? Northern Europe.
2
Sadly, Don the Con sees all business transactions as real estate deals where either party can walk away and no one is harmed, the deal just doesn't get done.
His foray into the world of world-wide, geopolitical economics reminds me of the guy sitting at the end of a bar discussing heart surgery: "heart's on the left, scalpel opens the chest and the rest is simple, right?"
The depth of Donnies ignorance when placed against Xi's life-long preparation for the job he currently holds is staggering.
A measured, reasoned response to the current crisis seems beyond the capabilities of anyone Don the Con allows to have a say in the matter.
4
Just a little while ago you said Trump is the human wrecking ball China deserves . Which is it ?
2
Thank you Tom...are you sure you don’t want to run for President?
2
Two individuals can never be a problem.
The wrong principles are the source of troubles.
How could the free trade make us wealthier?
The trade is just an exchange of the goods, thus zero-sum game, identical to the gambling.
The total amount of the dollars brought to the casino table is equal to the amount of the cash at the end of gambling night.
The loss stems from the colossal waste of time and personal energy.
If we believe that’s easier to make a toy in Beijing, transport it across the world and sell in Chicago instead of making those right here, then something is wrong with our basic education.
Of course, any financial benefit stemming from discrepancy between the Chinese and American wages is short-lived and will be lost after several decades.
What to do then?
Bring all those factories from China back to America to be more environmentally friendly and preserve the energy wasted on transport of the goods across the globe?
Was the free trade system developed by Trump or just exploited by him to become wealthier?
13
@Kenan Porobic
How do you expect to get recommendations if you keep straying off-topic (Trump) and discuss the greater subject? You got mine.
1
@Kenan Porobic
Trade is not zero sum. It creates wealth because it lets people specialize in what they’re best at. That’s why most people don’t produce everything they consume, but instead have some kind of job where they make one thing and then trade for the other stuff they need. It’s the same for companies and countries. Countries that trade more are richer and better places to live. According to the most recent World Bank data, the four countries with the highest trade relative to GDP are Luxembourg, Hong Kong, Singapore, and Malta. The four countries with the least trade are Sudan, Burundi, Cuba, and Nigeria. Pretty clear which set is doing better.
The US also has much higher per-capita emissions than China so it’s not clear that moving more production to the US would reduce emissions. Shipping is a minuscule percentage of total global emissions.
8
@Kenan Porobic
I disagree with your description of trade as a zero-sum game, identical to gambling.
If this were true, we should all be a nation of subsistence farmers.
Your assertion that "If we believe that’s easier to make a toy in Beijing, transport it across the world and sell in Chicago instead of making those right here, then something is wrong with our basic education"
is discussed (and rebutted) in many Economics textbooks.
I recommend Paul Samuleson's "Economics," or, for more depth, John Maynard Keynes' "General theory of Employment, Interest and Money."
7
Trump did not sign the TPP for the wrong reasons. Most Democrats in Congress opposed the TPP.. The TPP like NAFTA is seriously flawed because it gives foreign investors the power to override environmental regulations in any participating country by going to court. These trade agreements need to be written so countries can protect the environment and not allow foreign investors to pollute for profits. It should be kept in mind that present economic activity is unsustainable. The atmosphere is being filled with greenhouse gases and the oceans are being filled with carbonic acid and plastics and agricultural runoff. Economic activity can continue on this path for a few more decades at the most. It cannot continue like this into the next century. Something fundamental has to change.
7
@Bob
ThAt pits economic policy squarely out of phase with environmental protection.
That’s a shame. Whichever countries sandbagged better language should be publicly exposed and castigated. If I had to guess, it was probably us.
Bully for Putin. His plan to bury us proceeds apace. The asset in the White House is overachieving— for Russia.
5
Much to think about, much omitted.
2 things TF omitted about China.
1) China has always been known as "The Middle Kingdom", but that's more properly thought of as "The Kingdom in the Center of the World". This goes back millennia and is a key to understanding that nation's motivations, just like paranoia is the key to understanding Russia going back to Muscovy.
2) China ALWAYS takes the long view. That also comes from being the oldest continual civilization on the planet. What we think of as China was old when Rome was founded. And that long, long view is to re-establish China as 1) again.
About Trump? He's the proverbial bull in a china shop (no pun intended). Rick Wilson put it :Everything Trump Touches Dies. IOW, he breaks and destroys everything, just as he's breaking our Constitutional Democratic Republic right now, instigating horrible violence and even possibly a civil war. Frank Bruni wrote that he'd be willing to burn the nation down to ashes as long as HE remains king of those ashes, a la Milton's Satan.
So even when he recognizes the right problem, it's for the wrong reasons and he takes the worst and most destructive path every time.
No wonder Putin loves him! Trump is doing more to weaken the USA at home and in the international community than Putin could ever DREAM of! He's shattering Atlantic and Pacific alliances both of which Putin detests. He's weakening both the American geist of freedom and thoughtful government, as well as the US economy.
3
All Trump has to do to make America poor again is lose to a Democrat.
They will be sure to strap middle class America with enough taxes to once again crush the economy with their ridiculous giveaways.
2
Trump started this insane trade war not Xi.
Don't try to blame it on him.
Instead of of a carefully targeted tariff program against the worst of slave labor countries like Vietnam, India, the incompetent ego maniac demagogue moron Trump starts a massive trade war against the whole world friend and foe alike.
4
Someone who throws temper tantrums is unfit to negotiate! Also as someone who flips and flops from one minute to the next is not trustworthy.
We need different leadership.
#VoteHimOut
3
I’ve written before that we had our way in the last half of the 20th century but will share the 21st with China and then India. China lifted its population largely out of poverty. Good for them - that’s exactly what they should have done. And good for us, if we can figure out how to live in a world where China, with four times our population, is a dominant player in both economic and military terms. To counter their excesses, we need allies. We had those aligned in the TPP, but Trump was too stupid and too arrogant to accept the need for allies. He thought it better to break all the alliances so he could extort our friends and trading partners one by one, we the big powerful country and them not. Guess what: China is, as quoted in the article, too big to be bullied.
The populist attack on the TPP, which ultimately also ensnared Hillary, was driven by ignorance. The victims of our decline from undisputed international dominance, the Americans whose jobs were replaced by automation, by robotics and by outsourcing engineered by American corporations, those victims thought it was brown or yellow-skinned people that did them in. No, it was us, our companies, dedicated to efficiency and profit and loyal to no one but their shareholders, and only partly loyal even to them. So as their labor unions were gutted - by us - and their share of our national prosperity declined, they decided to MAGA.
We aren’t going back to 1950 or 1970. China sure as hell isn’t going back to poverty.
4
Only fools would waste time to do deals with Donald Trump. The Chinese are no fools.
Through a deliberate year long negotiation they tricked the US team to show its hand on the table and determined that no amount of concessions can satisfy the China hawks headed by a third rate economist Peter Navarro at the White House. You give him an inch, he wants a yard.
Unlike Canada, Mexico, South Korea, China cannot be bullied into submission.
Now, it boils down to who blinks first. This is so stupid and unnecessary.
3
From your pen to Trumps' aids sharpie. Let's hope he sees it.
Interesting negotiation strategy. If Trump started to read your article, which I doubt, you lost him at the word globalization in the second paragraph. He couldn't spell it so why bother reading it. Kudlow and Navarro are too much of a narcissistic sycophant to bother also.
1
Disagree. China is unfair and corrupt to its core. They will suck the blood out of us as the previous idiotic and cowardly administrations have allowed. They want to dominate the world. We are better off with two separate systems. Xi lies with every facial expression. They also want to gang up on us as all good thugs do with Russia and North Korea and Iran. They need to be set back a good hundred years, whatever the cost.
4
I am an American expat living in China. I can tell you one important difference between China and the US. China has 5 and 10 year national economic plans. President Xi meets with his deputies who are informed by industry leaders, PhD economists, PhD scientists, etc. and they sit down and create thousand page documents outlining every step that China will take in the future to succeed.
The US has a reality TV star sitting at the helm who doesn't believe in "experts" but believes in his "gut". He is making random, sometimes incoherent, decisions that seem to vary week to week. China will win this trade war for the simple reason that they made a long term plan and will stick to it, come hell, high water, or Trump.
356
@John MoranIt is indeed one of the biggest flaws of so called free market economies that they are a plan-less and just focused on short term profit. Add to that the neoliberal illusion that markets will make the right decisions by themselves and you end up with a messy situation, where the essential public infrastructures, that are the precondition for economic development, are falling apart.
26
@John Moran
Correct.
The mindset in China's leadership is that a year, even ten is just a matter of time.
In America, waiting for table service or just about any other need is that waiting a matter of moments is too long.
We fought in Vietnam expecting a quick victory. The Vietnamese fought the Chinese for 2,000 years over their borders and fought America and France for just about twenty.
Americans will weaken. The Chinese will not.
The difference is as with Vietnam, American tactics are on the wrong side.
The present president has managed to destroy America's alliances world wide and made it easy for North Korea, China and Russia to make amends.
In any war, the odds are America will lose just as America's farmers and others are doing as our false reasons that we are always in the right collapses for the world to see.
26
@John Moran And as you point out, they prize their educated experts and listen to them instead of eliminating their jobs and installing their in-laws.
36
Mr. Friedman, the whole aim of the GOP and Trump is to make as many people as poor as possible so that a few extremely wealthy individuals can literally control everything. The GOP has been laying the groundwork for years to create enough hatred and division in this nation so that when things get really bad, Americans will turn their wrath - and their guns - on their friends and neighbors instead of on the politicians who sold them out. Tale as old as time. China's record on economic opportunity and individual freedoms is just as dismal as America's, moreso actually.
What evidence is there to suggest that either of these leaders care at all about regular people, especially regular people who are poor?
4
All China has to do is - Call in USA's debt.
1
On the terrible day of Trump's election, I said to family and friends that "he was going to bankrupt this country just like he did his businesses over and over again" -- I would have been so happy to be proven wrong and am devastated to watch this come to pass. Trump is not well and he's not competent -- he needs to go -- the problem is Mitch McConnell sees his legacy in one "ugly" dimension -- changing the courts and bringing them back to the 50's, where the minority can and will be protected. These two old white men are a perfect match -- blinded and driven by hate of everyone. There is a sickness in our society and out of that sickness these two "nothings" have gained incredible power, but hasn't that always been the case throughout history -- the "nothings" turn out to be the most hateful and the most dangerous.
7
Games theory shows the way out. "Whatever you do, I do." it has been proven to work time and time again.
@kenjf01
Tit for tat leads to a stasis if neither party has a dominant strategy. But Trump believes he is in a dominant position so he is likely to escalate causing more damage before his weakness becomes apparent to him.
3
Good summary of the situation with China. Especially now that Xi is proclaiming himself emperor for life and he has led the government to be very repressive and paranoid, the game changes.
It is difficult to buy technology from a trading partner you don't trust.
1
I have a better idea. Impeach Trump and vote every Republican out of office who has supported him. Until then America is at the mercy of an incompetent president and a Republican party that puts its party's interests over those of the country. Does Friedman realize the absurdity of giving advice to the Trump administration?
1
Trump is not a humble man. A strong country can afford to accept equality with another country as it knows its strength. But Trump and xi can not work as partners mostly because of arrogance and self righteousness. Talking with others requires a give and take and dictating your position doe not allow communications to occur at all.
We can not afford to sit back in our nationalistic pride. And when both China and the US do so it is inevitable that you have two armed camps facing off. No country can afford to cut off its self off from the rest of the world and expect to maintain its strength.
Poor Again? All of those Americans who lost their jobs to Chinese factories have been poor for years.
Those who write opinion pieces for the Times, don't seem to understand that the industry they work in, is not the industry that most Americans worked in.
There are only a handful of media outlets big enough to pay people to write opinion pieces, but there are tens of thousands of empty factories across America.
5
But wait... I thought trade wars were EASY to win!
Having spent the last 20 years going to and from China - Hong Kong, Shanghai, Beijing - I think I got some insight insight on how normal folks live. I presume their leader has little appreciation for how their lives are much like Trump hasn’t a clue here.
Living in their bubbles distorts their understanding, whether as a dictator-for-life or wannabe dictator-for-life. Neither are comfortable with the word “No”.
The pronunciation of the Chinese leader’s name must subtlety irritate Trump when he hears, “She wants this or she wants that.” He hasn’t figured it out yet.
It seems the Trumps throw around the word “Love” far to carelessly whether in marriage vows, receiving illegal foreign campaign assistance, or in describing relations with foreign leaders. I just love it.
With two fearful megalomaniacs in a tug-of-war over world dominance, what could go wrong?
1
And what, oh what will Trump do if Xi sends in the troops to put down the unrest in Hong Kong?
Asking Xi to sit down and talk with Trump is asking Xi to reason with a second rate quisling representing a few baleful billionaires. These wealthies have only the agenda of creating chaos in the USA that can provide openings to consolidate their power. A favorable outcome with China is, for them, further destruction of democracy in the USA by sowing catastrophe.
3
Selling all my stocks now. Thanks Trump. The crash is coming soon.
3
If this continues, the Republican will impeach Trump.
Getting interesting....
Sounds like the globalist is sad that the gig of globalization may be up.
Please explain how welfare payments (subsidies) to farmers or the Fed lowering interest rates during a bull market are any different than what the other dictator does in China. This is the man that wanted American auto manufacturers to go bankrupt in 2009, and uaw members support him politically?
we elect an ignorant, narrow minded, know
noting about other countries and expect
miraculous solutions. Unfortunately, he is
also surrounded by ignorant, sycophantic
advisors. The results will be bad. The only
lesson we can learn is to use "thinking"rather
than emotions to vote for the right candidate.
Te problems won't be solved till there is a
change in 2020.
Trump’s business history is our future. Trump Steaks, Trump University, Trump casinos....
Impeach Trump.Impeach Trump. Impeach Trump. Get rid of the novice diplomats, weak fringe economic theorists, and people with 19th century thinking such as Bolton, Pompeo, Miller and Mulvaney. Get rid of the republican controlled senate that is making policy that only protects the very wealthy, ignores science and is obstructionist in nature. We have an administration that is so inept and wrong minded that situations such as China will only get worse under their control. Everyone saw that Trump was inept and leaving us isolated. we will be left bankrupt just like his companies.
China hates Trump.
Silicon Valley hates Trump.
It is entirely conceivable that China, not Russia, will interfere with our next election, to the detriment of Trump, and that social media companies will be happy to look the other way, while goosing their quarterly earnings per share.
I can think of no more damning indictment of Friedman's worldview of the glorification of both globalization and technological "disruption" over the past several decades.
2
Writers need to stop engaging in wishful thinking. Projecting normalcy on Donald Trump is a waste of our dwindling amount of precious time.
3
I am sure the stable genius will accomplish the same winning as he did with North Korea, Iran, Syria, Turkey and Vladmir Putin. Amazing how much winning there is under Trump! GOP has truly selected the most qualified nominee for President and combined with leadership of Mitch McConnell they are accomplishing great things. US security has never looked better. Chinese must trembling in fear of our fearless leader.
Really? The US was "POOR" is 2000? The only people who will be poorer are those plutocrats whose interests Friedman advocates.
"Free trade" - BTW, there is no such thing, as costs are realized by the losers, works to the advantage of certain well-placed individuals and the concerns they own and manage, tell the unemployed and displaced workers in the US about how "WE" will be poorer.
Trump has his reasons for pushing back on China, and they probably are geopolitical, not economic, although he doesn't realize it. China has won politically and militarily thanks to the globalization epidemic. If Friedman and his ilk ignore the fact that China has used trade to increase its economic power, which is the basis for its increased political power, a disservice has been done to the American people - and to the free world.
Don't believe me; ask the people of Hong Kong.
2
It's too late for the writer's idea of reciprocity. That is what Trump has tried and China won't go along. They won't buy from us, other than some agricultural products and tech they cant produce. We are headed for a further trade war due to China's intransigence. As for our economic allies: they have been taking advantage of the U.S. for years too: selling to us but not buying equal amounts (same as China). They cant help.
2
I have just visited Shanghai. All over town were hundreds of McDonalds, Kentucky Fried Chicken, Starbucks, etc. GM sells more cars in China than in the US. Huawei is not a danger to US safety, but is a competitor to American companies. People from all over the world come to the US with their technological new ideas and the US thus has an advantage over all other countries. What has happened is that the US has gained a lot buy buying cheap goods from China. Here is the mathematics: America buys a shirt from China for 1 dollar and then sells it in their shops for 30 dollar, thus 29 dollars of the "shirt-economy" takes place in America. Sorry, you buy cheap and then you accuse your seller for having low prices. Pathetic.
2
Finally! It is about time someone brought up the TPP again. Tearing that up was one of Trump's biggest mistakes in a long list of missteps predicated on Trump's ignorance and arrogance. You beat the schoolyard bully by gathering the other kids with you and confronting strength with strength. Trump, who on his own is merely another bully, went it alone and has met his match in Xi. Xi merely needs to wait him out. The Chinese think further down the road than we do. 2020 can't some soon enough.
173
@TW
Same for tearing up the Iran Nuclear Deal. Trump is just hellbent to undo everything Barack Obama did with classic Donald Trump vindictiveness.
16
@TW
There was no voting constituency in America for more trade deals with Pacific Rim countries. There still isn't.
2
@TW Maybe China will vote for Democrats this time as they hack our insecure elections.
2
Our only hope is to elect a Democratic president who will select advisers with expertise and sense.
2
I like the idea that we and the Chinese are equals in economic power. Moreover, Chinese (not talking about party regulars) hope to mimic our culture and life style in so many ways. So I suggest the relationship should go one step further, ie. we become business partners in world development, we work together to build the economies in central and south America, across the horn of Africa and other countries where folks are starving and wanting to migrate to Europe and the US. This kind of growth would fuel the economies of both our countries. We managed this with Japan with incredible success and we could do this with China, if we look at them as potential business partners, rather than an enemy wanting to take over the world.
Trump & Xi are engaged in an economic war of attrition. Xi knows full well China has been cheating since it began developing its export manufacturing base. Trump knows nothing, he's a fool, however, his negotiators know full well that the economic 'injury' from China was / is the result of greedy USA corporations who refused to allow previous administrations to push China back under WTO rules.
All wars of attrition end with a Pyrrhic Victory. Bravo to these two arrogant leaders for placing selfish egotism far ahead of their responsibility to their people and the stability of the world.
46
He writes “What China allows us, we should allow China. And what China doesn’t allow us, we should not allow China. And all deviations from that standard can be negotiated.”
Shouldn’t it also be “What America allows us, we should allow America”?
‘...If you were Trump’, columnists would have nothing to write about. Trump’s problem is that he is Trump. He can’t back down, he can only double down. He can’t take advice since he is the smartest, most non-racist person in the world. Trump has one way of reacting to anything he encounters; attack, insult, attack again, unless that person is an autocrat who compliments you.
1
This is the real danger of DJT. Yeah, his racist rhetoric doesn’t help, but if he doesn’t get the problem with China fixed the US will see it’s demise in the global market. We no longer have friends in Europe and Latin America. It will not take much for the Chinese to nudge other countries their way through access to their expanding demand and markets.
82
@Josue Azul
I can't help but think we'll start to see far more positive news on China closer to the next election.
Love the pic. Taken candidly and out of context but still, Trump does look the part doesn't he? Having a hard time with those jacket buttons, huh? God, what a joke.
1
Let's admit that trade is more valuable for China, because Xi needs economic growth to maintain the stability of his corrupt and authoritarian political system: "Our Politics, Your Economy." So, instead of propping up the Reds (about whom Thomas Friedman has previously fawned), perhaps we expose them to the reality of a free market not driven by subsidies from America?
2
Another foolish and miseducated article from the NY Times on China and US relations. Seems clear that the US is losing its footing as the global hegemon (save militarily and militaristically) and as a result is crying foul when another country (China in this case) relies upon practices that the US has long employed themselves. Friedman claims that Xi and Trump should solve this together...that's laughable. From the Chinese perspective, the US is protectionist, undermining free trade, and consistently meddling in the business of other country's domestic policies in the name of "democracy" and "freedom". The latter terms of freedom and democracy are the most laughable of all in the American context. The city on the hill is burning.
The guy was right, America is to late and China is to big and then there’s Russia, and no one has a hand on the rudder.
1
Tom,
You think Trump can sit down with anyone and resolve a complex set of issues in a mutually beneficial way?
4
Friedman insists upon viewing Trump as somehow motivated to solve some problem and somehow able to carry on an actual negotiation. Where is the evidence for this supposed capacity??
Trump is a mindless Quisling of his baleful billionaire backers. A mouthpiece and at best a bumbler.
2
So Mr. Friedman are you and Mr. McGregor suggesting we share the podium with someone else? Doesn’t that conflict with our belief that we are the most exceptional, capable and deserving? Perhaps the water isn’t as fine in Lake Wobegon as we were led to believe after the end of the Cold War.
1
My take is that Trump has reflexively sought profit from his hodgepodge of buildings and businesses by straightforward brinkmanship - with the legal system in the form of bankruptcies and reorganizations and law suits to bail him out of failures. Xi understands that he is dealing with a rouge, intellectually unsophisticated character with a one track mindset and is preparing to wait him out while inflicting maximum damage on our economy. Who knows how badly this ends for both nations. But if someone backs off, my money is on the one with the self-described “big brain”.
1
Mr Friedman is a man of peace, looking for a sensible,reciprocal resolution to the escalating trade war between the two dominant forces on earth. Unfortunately I suspect the current trade blows are tantamount to the first taunting shouts levelled at each other by the two powers, readying themselves for an actual exchange of real blows. US weapons are being sold to Taiwan, China cannot tolerate this blatant challenge to its sovereignty; Chinese battle ships are being built at an accelerated pace as was reported a while ago by Reuters, Hong Kong is being destabilized possibly with US involvement...The list of signs is getting longer and points to the possibility of a military showdown down the line.
It is not long ago that mr Xi was a red carpet guest at Mar a Lago,and when the Chinese president won an extended term ,president Trump said: “He’s now president for life, president for life. And he’s great”.
In international affairs, History shows that the actors seem unable to counter the "zeitgeist", the spirit of the era,which runs its course in a powerful ,unstoppable manner. We may be entering an era of less trust, less cooperative spirit as exemplified by MAGA in the US, Brexit in the UK, and the list goes on.As mr Friedman writes ,we are busy destroying the 70 year foundation which has given the world an era of unparalleled peace.
And our stewards to steer a safer course are president Trump, Boris Johnson, V Putin and Xi Jinping.....
121
@Marcelo Brito
No! Stewards are us.
"Trump has banned Huawei"-- nope. Trump is using that as a bargaining chip. He has confirmed this . Also, the US can sanction countries where the US wsants " regime change". How come its ok for the US to pursue our objectives and others are not allowed?
1
Though the problem is identified correctly - prescription of solution is naive. China is a lawless country hidden behind the charade of glittering infrastructure. My friend told me the Chinese way of doing business. A Chinese American business man make his electronic gadgets from China and sales globally. When he was asked how he prevents theft of his intellectual property. He said, it is not through. Court, is through violent gangs that keeps threat to the family members of the employee. I am sure Apple and other multinational companies are also using the same tricks, except when the state itself is the party. All bates are off and giants like Howaiee comes out. Legal environment of China and free world are different - only way to solve this problem is to untangle China from free world till such time, China adopts the norms of free world.
1
In a global economy when the two biggest go to war what happens to the countries on the sidelines? I'm most interested (and suspicious) of how this impacts the Russians. Could all this be to Putin's benefit in the short and long term? If you know, please leave the answer in a reply.
1
Again and again, we still believe we are unique, the envy of the world. We lecture others about democracy when we tolerate the irresponsible Soviet Mitch representing 1% of the population. China is much much smarter than us...While.we waste trillions in defense, they build financial alliances in Africa, South America, Asia and Europe. Already, Europe is working on their own defense protection. Eventually, no foreigners will buy American products because of an inferior quality combined with their own trade arrangements. For people abroad, Trump is the new America, because we keep him there. From their view, he is us. The American dream...for whom? In 20 years, our children will probably be looking to emigrate.....to a better quality of life.
2
Freedman approaches this subject, as he so often does, like a schoolteacher encountering a fight between classmates. His immediate reaction: they are both wrong; they must both get detention, and must both write essays on the evils of fighting. Teachers do this because it is easiest, they are overworked and because it doesn’t matter.
Freedman offers no other discernment: no historical context, no asking why; just the Western conviction that conflict comes because of bad people and two bad people in conflict is easier to write about than one.
So, Xi is also to blame? Why? Because they have frightened him. They have frightened him “by seizing islands in the South China Sea.” They did no such thing. “Seized” suggests a military takeover. China has “seized” no islands. They have built islands. The US has seized islands in the Philippians, the Marshall Islands and Guam. There we have built vast offensive capabilities mostly directed at China.
How else has China frightened Freedman? By developing its own technology. It scares Freedman to imagine a world not dependent on the US for its basic material needs. I’m putting him in detention, alone, for this poor, unresearched paper.
1
If I remember correctly, Bernie was very big on pulling out of the TPP, which Obama had negotiated.
Then Hillary followed Bernie’s lead.
Can anyone explain why?
And has Bernie changed his mind?
Maybe some of your readers (or Mr. Friedman himself) can enlighten us.
1
Call me cynical, but I expect Trump sees more upside politically in having this linger until well into 2020. Resolving this now likely won't give him an election boost. Doing it summer 2020 would.
All both sides have to do is pretend that they reached some deal, like that new NAFTA deal. Anyone even remotely on the fence about Trump will likely take a claim of a great, fantastic deal that fixes the problems of the last 80 years at face value.
66
@Atruth . Yes, I agree a calculated risk that Trump is taking to get a trade deal with China right before the 2020 elections. This means
a trade deal favorable for China and Trump claiming victory. How is this good for the US?
13
@GolferBob
"This means a trade deal favorable for China and Trump claiming victory. How is this good for the US?"
It's not. But whether or not something is good for the US is not important to Trump.
13
@Atruth As in: there is nothing like an external enemy or maybe even a war to rally the support of citizens and the electorate. Ohhh- isn't that encouraging?
1
So I pretty much agree on your premise and Mr McGregor analysis. Except for one paragraph. No the American companies did not have a gun to their heads and make them give away secrets, the American companies did it for the MONEY! and now American companies want" we the people" to bail them out and war with China on their behalf. These are the same companies that sold the middle class down the road for 3% profit. These are the same companies that destroyed the unions that paid a living wage. These are the same companies that pass out paper work to their employs that shows them how to get government assistance because they do not pay a living wage. These are the same companies that basically pay a pittance in taxes as we protect there ships with our Navy. I say let them fight their own battles, after all they built their companies "all by them selves".
287
It's not your Navy, it's the Corporate Navy.
2
@oscar jr I agree completely with your sentiment concerning the "bad" behavior of US companies,both at home and abroad.I have a very close relative who worked for a large corp. and was stationed in China.She told me that they knew China was stealing their tech. "secrets" except they were not so secret anymore.China was getting yesterdays technology.They went along with this because they hoped and still do hope to get access to China's huge ,emerging consumer market .That market is estimated to be 400 million..more than the entire population of the US.The total emerging Asian market is estimated to be over 1 billion consumers.We are not the only or the biggest player in that market.The TPP would have put the brakes on this...for awhile.Time to negotiate a new relationship....with real negotiators.Trump's supporters believe that is was the US government that decided to move to China.As you point out,it was the CEO's that decided to make the move and lobby for more autonomy.But..I don't think they(the corps.) have the ability to go it alone.They have a hard time doing anything without the comfort of having a monopolistic stranglehold on any market they want to operate in.Just as they do in this country.
11
@oscar jr Plus we've seen this movie before. In the 70s, Japan sold us t-shirts and toys while quietly innovating their way into the auto industry with smaller, fuel-efficient cars that people wanted to buy. Here, instead of innovating, investing in R&D, creating jobs, and generally doing all those wonderful things the GOP tells us corporations do with profit, US automakers stuffed the money in their pockets, and then howled for government help when they couldn't compete against Toyota and claimed it was all labor's fault. Short-term gain trumps long-term survival in corporate America. China has already out-innovated us in renewable energy technology, which is probably why the first tariff Trump slapped together was on solar panels. Meanwhile, installing those panels, a job that can't be outsourced to China for short-term gain, employs multitudes more people than coal mining.
12
America is an unreliable trade partner with a churlish President who imposes tariffs and sanctions by decree, without the consent of Congress or the advice of economists and leaders in American commerce and agriculture.
Over the next 5 years, China's Belt and Road project will open trade routes and develop foreign infrastructure that will serve China's market through the end of the 21st Century. China will end its dependence on US agricultural products by expanding agricultural development in western Brazil and Paraguay. China will override its dependence on patented US technology by disregarding the onerous patent rights that burden US enterprises. China will bankrupt Boeing, the largest US manufacturer, by cancelling orders for Boeing aircraft worth billions of dollars. The treacherous Boeing737max will be replaced by variants of the Airbus 321neo, a superior aircraft that is assembled in China.
Trump's America has no plan to secure its markets and expand trade routes. Instead, Trump is whimsically erecting trade barriers on the Atlantic and Pacific, and to the north and south.
China has mature economic management, a responsive economy, an unintrusive foreign policy, and an uncanny ability to build rather than destroy.
China will win Trump’s willy-nilly trade war!
1
@AynRant:
Gotta love that moniker.
I wish I had thought of it.
1
Friedman the dinosaur still talking about yesterday's politics. Wokeness, Tom, creates its own oxygen--i.e. see debates. We have other things to worry about. The world has moved on from wars, the clash of colonial egos, the patriarchal swagger of male hierarchies. The good intentions of a woke President would retire these relics to the dustbin of history--again, see debates. A woke President would shame China to forsake its global ambition. "The big view" (wars, trade, security) is what keeps oppressive structures in place. Apply the Giuliani method to world problems. Attack graffiti (homelessness, inequality, environment, health) and wars and trade will become redundant. Agains see debates. Wokeness is as wokeness does. That will be all.
Thank you for the "deep" analysis about how we got here but, with this shallow President, I can tell you who stands to come out ahead. China has four times the people (customers) that we have, They hold about 5% of our debt, they have better access to the emerging markets and their government, their people and their companies think long term (road building in Africa). We, on the other hand, have a divided electorate, no more allies, a capitalist agenda which can't even see the profit motive in infrastructure investment or sharing those profits. Lastly, and maybe most important, Xi will listen to his advisers, his business executives, his economists and his diplomats in order to maximize leverage, while Trump only listens to FOX news, political and economic hacks and feels he only needs to cater to the hatred and fear of his base. Under the circumstances, I see China winning the trade war, while Trump just claims to.
753
@Rick Gage
What’s good for the goose is good for the gander, normally. In this case , our goose is cooked.
7
@Rick Gage While what you say is true, what Friedman didn't talk about at all is the growing debt crisis in China and the shadow banking going on there to try and keep afloat many smaller and mid-sized companies. NYT published a good article on that, including the disturbing fact that many companies in China are paying each other with I.O.U.'s and not cash. China needs the U.S. market and Xi knows that. But I do think he is willing to take perhaps too great a risk with the world's economies to bring Trump down to size. I say impeach Donald Trump – he is a threat to the entire world.
9
What we are witnessing between China and America is an economic proxy war between crony Capitalism and emergent authoritative Capitalism. US Capitalists began it with its successful war on US Trade Unions and the working middle class that Unions help to create.
Yes, T-shirts, tennis shoes and toys were the low hanging fruit for China manufacture. However, they were picked by iconic US companies CEOs to disassemble production here and off-shore the factories that made Lauren, Sperry, Marx, inter alia, brands. Those technology transfers were easy, albeit, costly to labor.
The Chinese student soon became more adept than his US master and there followed the more sophisticated products like electronics, machine tools, autos and drugs.
All these disembowelments of US industry have driven down wages, living standards as they have left behind too many Americans. Possibly a reason for so much anger by the nationalist Trump's base.
As long as the supply chain shareholder from China to Canada to America is making profits, the spiral race to the bottom will continue, income inequality will worsen and China's Authoritative Capitalism will cause our ossified Crony Capitalism to wither.
4
Back in the 90's when China's corporate tax rate was in the single digits while the US's was 35% and imports from China were virtually duty-free, US multinationals were incentivized to move its manufacturing to China(labor costs, laxer EPA, rules, etc were also influencers but the tax differential overwhelmingly drove the analysis). The US government allowed this in hopes for the opening of the China consumer market for US goods and services.
So, what happened on the way to that place? The Chinese consumer market was never opened while the Chinese harvested IP from the US multinational manufacturing base. Meanwhile, the US manufacturing base was hollowed out resulting in the dislocation of millions of workers; they never did fully transition to those new hi-tech jobs in accordance with the globalization doctrine.
Finally, the US under Pres. Trump enacts a Tax act that drops the corporate tax rate to 21%( vs. China's current rate of 25%) along with other carrots and sticks( including the tariffs) which incentivize US multinationals to move manufacturing back home. It will take time for companies to retool their manufacturing sourcing plans but if they are properly serving their shareholders, the regrowth of the US manufacturing base will continue; this is the secret sauce that will keep the unemployment rate low even if the tariffs stay in place. Meanwhile, China leadership will be contemplating slower economic growth along with the attendant knock-on effects...
2
...While this current administration's reasoning on a host of issues is murky at best, it routinely leaves trails of its overarching mindset. Nationalistic fervor on both sides has got a chokehold on both leaders, and since the duo are allergic to being seen as weak, respite seems afar off.
China has never encountered a tactical American leadership in decades, and this current one caught them by surprise. Most American presidents are strategic in their approach with China, and the Chinese have gamed out that approach and explored its weakness. Unfortunately for China, this president reasons in short term and tactical way a major reason it's causing China a headache figuring their way of the current mess.
Undoubtedly, no one wins a trade war but one party will suffer more damage and in this particular case it appears it could be China. As we speak, China has over 300m people in the middle class, the size of the US population. If the trade war isn't resolved in good time, that income group will sharply decrease and that will distort local economy posing a credible threat to the communist government.
The downside for this president is that 2020 is fast approaching and he's running out of time to salvage a face saving deal before the damage to the economy becomes irreversible. But knowing this president for his unpredictability, one wouldn't be surprised if he signs off on any deal and then market it as the best deal ever to bolster the stock market his success barometer.
3
trump only cares about looking like a winner. He creates crisis after crisis and then pretends he is solving them. He started this trade war to make himself look strong. He will strike some type of weak deal before the election and claim it to be the greatest deal ever made.
Friedman seems to believe trump actually wants to make things better. He doesn't.
1
Excellent column! Wholeheartedly agree that both leaders need to talk equal to equal and that we need to treat China as a developed economy.
The only caveat I see is that the "shared values" aspect that was rightly raised in the article gets lost in the rest. Indeed, there is much in the realm of values that is very different between the West and China and this cannot help but affect how the trade negotiation are lead. I do not trust the Chinese government and by extension I do not trust Huawei. This has nothing to do with technology or trade or economics but everything to do with politics. In that particular sense, Chinese are right that we are politicizing the trade dispute... because we have no choice.
Excellent article that only reinforces how desperately important it is that Donald Trump not be President of the United States in 2021. Sadly, as the Democrats try to out-left each other, critical macro issues like this receive no mention. Do we need to make health care more accessible and affordable? Of course we do. Is is imperative that we get Manhattan Project level pro-active in addressing climate change? Absolutely. Are inequality issues and immigration reform in need of our attention? They certainly are. There is no shortage of important issues that deserve our best efforts, but defeating Donald Trump has to come first. The fate of this country as we know it hangs in the balance. To do that, someone in the Democratic primary needs to set aside the partisan bullet points and start speaking the language of a big thinker who can convey points just like Friedman makes in this article. Our future depends on it.
3
"But going forward, as much as possible, the goal should be equal access... "
I agree about the equal part, but I believe we should add that we insist on results as well as conditions. By that I mean that the trade deficit must be reduced until it is near trivial, and do so according to an agreed upon schedule. Otherwise we end up playing whack-a-mole as they work around whatever rules we agreed to.
I agree completely with the author that this had to be confronted, but Trump was badly mistaken when he decided to go after all our allies before starting a fight with our biggest competitor. That might be the blunder of the century.
2
Just one correct to an otherwise good article. The United States is no longer a democracy and China is no longer communist (with a small c).
4
"But he did it in an incredibly foolish way!"
He did it the Trump way like everything else and in the process has made blunders that those of us with no expertise on the topic can see are doomed.
4
Perhaps an even more ominous aide to the trade dispute is that both sides believe they can wait out the other before the 2020 elections.
Trump believes that China will cave by at least May of next year just as the election is in full cycle, earning him points with voters for being tough on China as markets recover on what he will call “ a more level trading field.”
Xi believes that he can wait until November 2020 and in the interim hope that a more reality-based Democrat will be elected with the promise to restore the international trading system.
In the meantime, both countries suffer.
2
Xi is the quintessential immovable object, elected for life, born of a culture with the long-suffering patience of Job.
Trump is emotionally compelled to project himself as the irresistible force, an image he appears constitutionally unable to back away from.
The silver lining to this dark cloud is that our president’s apparently deep-seated need to project unwavering personal strength may actually be the undoing of his “I alone can fix it” presidency. All Trump brings to the table in 2020 is his bigotry and, if he doesn’t flush it down his gold-plated toilet, a strong economy. Granted, a significant proportion of his base will support him virtually regardless so long as he continues to support white nationalism and defend their white privilege. But few others will be willing to stomach significantly higher prices for consumer goods or the hits they will take to their 401Ks and/or net worth from prolonged stock market declines. And only the hardest of hardline bigots will be willing to stand in soup lines for him.
If Trump and Xi do tank the global economy as Friedman predicts, it will be a long, hard row back to American strength and prosperity, but at least our president is not elected for life and we have a chance to do something about it.
1
Deals begin usually with at least a modicum of trust.
Trump has shown that trusting him is not possible because his past history of stiffing contractors who have done work for him but not been paid or offered only change on the dollar is public knowledge. The Chinese have a trust problem also, and America is reasonable in being wary of what they promise also.
When Trump trusts his own judgement above that of others more skilled and knowledgeable about economics, the country is going to suffer and soybeans will rot in their hoppers.
1
“Oh, East is East, and West is West, and never the twain shall meet.......”.
The poem by Kipling suggests that, in the end, two strong men from different cultures can bind together if mutual respect exists between them. Xi has been given lifetime executive powers, Trump, not so much. China has risen from a long era of Western domination. It remains to be seen how this plays out over the coming decades. Climate Change, Automation, and Artificial Intelligence will be prime factors in the determination of winners and losers. The struggle for domination will continue as the mode of civilization. I fear for my Grandchildren.
1
The most important point here is that China is now a huge sophisticated and diverse economy. It makes the UK or France or Germany look tiny. It should be treated as such. It can certainly produce world class scientists—just look at how many silicon valley geniuses were born in China.
Sales to the US are less than 5% of China’s gdp, and China’s future lies in growing consumption at home and on the Afro-Eurasian land mass where 90% of all consumers will exist in the future. The US will mean less and less.
And Trump has provided shade for the inevitable slowdown in China’s growth which economists gave predicted for a decade. It is now Trump’s fault, America’s fault. Not buying American soybeans is just the first step in rejecting American goods.
Brilliant negotiating!—Not.
3
Great column, Mr. Friedman. Trump wants to see himself as the great hero, but in his bottomless neediness, he ignores good advice and logical steps, opting instead for aggressive, uniformed policy that he thinks makes him look tough. Abandoning the Trans-Pacific Partnership was a really bad move, one that we will pay dearly for, for a long time. Trump really is not a true negotiator and strategist; he operates from the sledge-hammer school of action, of which we are now seeing the consequences.
4
Friedman is a smart guy, but man, can you still be this naive after three years of Trump? Not to make light of the serious geopolitical and economic issues involving China, but come on. No one could live through the past three years and think Donald Trump has some strategy or desire to benefit the United States.
It is crystal clear that his motivations are to enrich himself and his family, appeal to his voting base and undo anything Obama did, the end. He has no interest in any of this beyond his own 2020 electoral prospects nor any idea how to get us out of it in a positive manner.
Trump’s idea of negotiating is to bully a weaker partner, and then declare bankruptcy to weasel out of the debt if something goes wrong. That obviously isn’t going to work in this case, against an equally powerful and much more intellectually capable opponent. As with everything else involving our reality show President, he is causing deep damage to our country that won’t be easily undone.
8
@David
But since it has to be undone, um...any ideas?
Xi is no angel, and no dummy.
By this point he is probably counting not only on Trump's selfish actions, but upon your numbed reaction.
the best way to fix the trade problems trump created is to work hard to get out the vote in 2020 to elect a Dem president and get a Dem majority in the senate and house. both are acheivable and this is where everyonemust focuson now..
Excellent article, and so true. It all comes down to allowing the Chinese to save face in the negotiations. The current administration has not concept of this, as was seen by the tenor of negotiations with Canada and Mexico over past twelve months.
4
@RMH
Be careful. Every China Finger (China Hand Wannabe) brings up "saving face." There's even a movie by that name. An American movie.
Chinese negotiators today expect their American counterparts to expect them to save face. Doing what is NOT expected is a strategy they are bright enough to hide.
All humans want to save face more than lose face. But they want to win more than either.
1
I said when Trump was elected it will take a generation to undo his administration's mistakes. Now I am thinking "generations." Tom, let's be clear that is was not "both President Xi and President Trump overplayed their hands and freaked each other out." Trump's ignorant tariffs started this mess, because he has no clue how to negotiate other than to bully, and China is way to big to bully. This is squarely on the dotard's shoulders!
11
@Robert Antall
Trump is an equal-opportunity wrecker.
Some things about this house of cards needed to be knocked down and rebuilt.
"Trump and Xi should drop everything and sit down to resolve this crisis"? What can they possibly talk about? Golf and the Belt-Road Initiative?
1
@Observer
Two great games, when you think about it. Dui bu-dui?
outstanding article.
5
This is compelling, but way too sophisticated for Trump to grasp. Unless he’s willing to listen to people who know more than he does, which of course he’s not because it conflicts with his view that he knows more about everything than everyone, this will not end well. Yet another example of the price we’re paying for having an ignorant narcissist as president.
9
@Michael Rosenzweig
It is evidently equally daunting for readers, as Mr. Friedman has discussed two subjects and few comments have attempted to address one of them.
Why sign a deal when the next day additional tariffs are proposed. Look at NAFTA, after the USMCA was draft, Trump revoked and threatened Canada and Mexico with additional tariff. So what's the point of a negotiation. Basically for Trump is my way or the highway, no, no, no, my way all the way: NO GOODWIIL. BTW what's wrong with a vision in 2025? It's taught in all North American MBA programs: Vision, Mission, and Goals are part of good governance? isn't it de riugeur management playbook?
1
The Chinese have almost 20 billion in IOUs in their system. They are hurting from Trump's 'policies'.
Probably much much more than Americans ?!
"Someone had to call that game. And that was what Trump did, and he was right to do it. But .... in an incredibly foolish way!"
I am not so sure. His ways are brutish, but its probably not a very nice world out there.
1
Mr. Friedman, would YOU enter into an agreement with Donald Trump? Of course not. Then why would China, or any other country, enter into an agreement that Trump will rip apart in a moment of narcissistic pique?
4
@judgeroybean
Mr. Friedman takes the time to consider whether entering the initial agreement was judicious.
If Thomas Friedman is an expert, why did not not point out this "deep" issue before Trump, whom he alludes as a bull in a "China" shop, started taking matters into his own hands. The point is, all the American corporations are corrupt. They were perfectly OKAY if China spied on Americans so long as they made their money in China. And perhaps, Thomas Friedman is also okay with this arrangement so long as the stock market boomed and he made money.
2
Trumps shortcut of using past racist superiority and China's short cut of using executive party privilege, gives opportunity to those who are open to thinking out of the box. Two superpowers self destruct once more.
1
@S Ramanujam
Three points determine a plane, which one needs in order to figure out which way is up.
Thank you, India.
1
The correct approach to 'deep technologies' as defined by Friedman as tech which collect personal data is to create technology standards and laws to protect the use of those data. TRUST is for naifs because as he says, "everyone is collect data on everyone." I feel no better if Huawei doesn't get my data BUT 20 other companies and spy agencies do. Even when there is no evil intent, the existence of such data easily lead to abuses.
The GDPR is a start and IoT needs MUCH higher security and data collection standards. That is the fight we need to have instead of just allowing our data to be harvested.
1
T Bo,
I agree that we all need more privacy protection. Chinese citizens know this better than anyone, and they invent some brilliant work-arounds to protect themselves.
I've got nothing against Ren Zhengfei or Jack Ma. While I have no inside info, I have no reason to consider them less trustworthy than our tech tycoons.
However the worst thing that happens to Mark Zuckerberg is that he gets an ineffectual on-camera finger-wagging from a bunch of dopey hypocrites in Congress. Despite their great wealth and influence, even Ren or Ma could wind up in a padded hotel room, wishing the nation's TV viewers could see him and know his location. I can't really blame them for giving in to that kind of pressure. But I also can't Pooh-Pooh the added risk in dealing with their organizations. In my China Dream, the subtle but trenchant wisecracks of Chinese netizens are readable by all. Keep the faith.
1
Why do we permit one person to act as our emperor in making trade policy unilaterally? Where is the democracy in this tiresome approach, especially when we're all aware of the inherent danger posed by a mentally unstable dim bulb like 45? And where was the mention in this rather shallow analysis of how China has set up all its corporations to funnel a crucial percentage of their profits directly to the Red Army? We have more to worry about from an angry China than this piece supposes, a China that has the ability to attack us directly and use its puppet state North Korea.
4
@Tournachonadar
Yes there are problems in cozying up to tyrants, but our willingness to respond to the DPRK in the strongest way is, after all, a willingness to incinerate 25 million civilians. It is said (mere hearsay?) that the hereditary autocracy is or was fond of Mickey. If they prefer Donald to Winnie, we may yet turn that to mankind's advantage.
The next recession began yesterday, I hate for the Country to be in recession, however, if it helps to remove Tump, "Viva la Recession"!
8
@Bill
Investors certainly make creative use of recessions.
Small stockholders panic and sell. Large stockholders snap up the bargains.
Beyond shedding Trump, are there other uses for a well-managed recession. Is there some sort of a Carnot Cycle we can exploit here? When we go to sleep at night, is that a recession of sorts?
Krugman, are you working on this?
Should we solve this problem?
We created this problem sometime ago and now trying to solve it. For me, more important question is- should we at all try to solve this Chinese trade problem, when this new trade war can solve many other more structural problems that our country and the world is facing due to rise of autocratic and rich China that American and other western companies created to boost their own profit and not much for the benefit of working class people in these democratic countries.
Trump sees it as a trade dispute and want his personal win via tariff. Every geopolitical problem resembles money to businessmen like him. But his action here may bring some unintentional long term benefits- help us to discipline our own companies, make more effective safeguards for international trade agencies like WTO so that rogue countries like China and big companies were not allowed to misuse it besides strengthening democracies world over.
2
@bonku
Eleven out of ten readers are not here to discuss trade, but I see your point. The creativity and diligence of the Chinese people is a precious global resource, like drinking water. We want to drink it, not drown in it. There are Americans who are paid by the gallon to pour it down our throats with a funnel.
The schoolyard bully always get his comeuppance, as is occurring to Trump, and only when our, and his, corporate masters, rein him in, will we see China cooperating.
But, and this is the BIG problem, as is suggested as one reason for Chinese intransigence, stated by one of China's people -"You Americans are too late. We’re too big".
Which is what I believe, more so now given that Asia and Europe, and the Middle East, are so sick of our bullying, they are engaged with China in investigating going it alone, and abandoning our once valuable leadership role.
And that is due entirely to Trump and his Republican partners; even if we succeed in dumping Trump and installing Bernie Sanders or Elizabeth Warren, or both, in November 2020, the Chinese will have been awakened and emboldened, consequently holding hard and fast to their new-found negotiating power, given them by the Trump dummy, and his equally dumb Republican partners.
5
@Mel Farrell
It is the American people who gave China this power and gave you Trump and the Republicans. "Electoral College!" you will whine. The Electoral College may cede control to 45% of voters. It won't cede control to 25% of voters. If you claim your platform benefits 90% of voters but you can't get 75% to support it, you may have a tendency to blame others for problems of your own making.
The portion of Europe you consider "Europe" scoffs at us because its restive voters hover around 35%. Europe's prestigious luxury products are more difficult to out-source. At first. This is everybody's situation to resolve.
I agree that Trump has needlessly alienated his usual allies, including where I am from - Canada.
It is still so shocking to me that he could criticize our Prime Minister and call our steel exports a security threat, but cozy up to North Korea.
And European cars - many of which are mass in the US - are a security threat?
7
@Mitch
40 million people on 10 million square km can support themselves - in the global market - by selling natural resources to more crowded countries.
300 million people on 9 million square km need a different econo-mix.
Canada's service sector is larger than its resource sector, but the service is largely for domestic consumption. When it comes to trade, the modest difference between your situation and ours stands out in greater relief. The stress causes some Americans to react in unexpected ways. Picture a person, just laid off, lashing out at family and friends, ironically for fear not just of poverty, but of losing their respect.
"Leading the free world" is a privilege, but adds pressure. Leaders must do some things - or believe they must - that aren't pretty. The supposition that nobody covets Canada's juicy land mass (yes, the juice is often frozen :) or that Canada's military might keeps the rest of the world from acting on that envy, is perhaps a bit imaginative.
I've read a bit about Canadian dairy protectionism that you may not have seen, but I agree that Canada isn't scary. Who doesn't want to pinch Justin's cheeks?
China's glorious civilization, like ours, has a few bugs right now, and vigilance may benefit both East and West. If Canada takes over the US through trade, Justin will read Winnie the Pooh tales to us. China is a different story.
Dear Thomas L. Friedman,
Great article except for one glaring thing!
Why say that tRump was right on account he acted against CHINA? We ALL know and knew that CHINA was a problem so he is not the author of what was right and correct about our US problem with CHINA! This is upsetting because it empowers the tRump MAGA types to read that and it is all wrong. The TARIFF is what he authorized and nothing more and he is WRONG. What you wrote about HOW to solve the problem by signing unto the TTP and using leverage is what is right and good but had nothing to do with the POTUS.
1
No sane person of liberty and means conducts any business whatsoever with people of Donald Trump's character.
10
@Steve Bolger
Nor Clintons and Obamas...
Don't you remember who sold us out?
Too late
I am busy ducking and covering
Nukes are being built again
WW III is almost here
and I just watched PBS Woodstock while weeping
No I was not there but sure wish I had been
Age 68 I give up
Sorry grandkids
We failed
12
I suspect that our unfolding climate chaos will wipe these concerns away
3
Trump doesn't negotiate--he barks and blusters and lies. A spoiled brat who denies today what he said yesterday. He graduated from his mentor's, Roy Cohen, school with a degree bullying.
Xi is no bed of roses, but neither he nor anyone else will find common ground with this egocentric hunk of humanity.
6
XI wants Biden in 2020.
3
@P&L where is this nonsense coming from? it sounds like Fox News is trying to scare voters off of Biden. but it is such a foolish idea..... trump has once again created a problem that "only he can fix". if china is waiting for anything? they are waiting to see if we are crazy enough as a country to give this man another 4 years.
2
I agree 100% with the very important point Mr. Friedman makes on the strategy, or rather total lack of strategy, that trump employed in the trade drama.
What is the wisdom of discarding all of your allies and therefore your leverage before demanding a renegotiation?
TPP was that big lever to push China in the desired direction.
Gone.
Ditto our European agreements and allies.
Destroying everything in sight so it can be rebranded as a trump policy is more likely than ever going to result in the historically infamous "trump recession 2020".
3
It seems to be a mistake to allow China and other communist and autocratic regimes to join WTO and the mainstream of global trade. Trade war with China might, just might, put a brake on our senseless consumption and may not be that bad thing for our environment. Globalization was basically done to enable politically well-connected Western companies to exploit almost free labor (comparable to slavery), cheaper raw material, and no regard for any environment & other laws (human rights included) in those 3rd world countries. Done only to boost profit for the company, without much benefit to people. Our corporations & richest people got the same privileges of those old days of slavery and ways to do business in line of Carnegie & Rockefeller. As economic prosperity of western consumers deteriorated, we got more dependent on cheaper Chinese products, and also manpower from such countries to work here- again mainly to boost corporate profit (and not much for better talent.) Cheap products also affected environmental pollution- globally. Consumption of goods must be at a fair price for the producers- i.e. farmers, laborers, general employees etc. Globally, including in USA, income of those working class people are decreasing, in percentage terms. Farmers' suicide is routine in America, France, India & most other developed & developing countries are routine, as (consumers)/"market" refuse to pay the right price while middlemen & big businesses enjoy huge profit from it.
2
Trade negotiations should be lengthy and boring. And carried out by experts. We have succumbed to the idea that every-man is an expert and fully understands things with his general good, common sense. Yet quite factually, we don't.
The Iran deal required a long time, and had MANY people from the US State Department, and other county's foreign services all working hard. TPP was a far-ranging compromise worked out by experts in trade and foreign policy.
China won't compromise with Trump. It is better to try to hack the election and get rid of Trump.
4
Follow the money. The trade war is effective at moving money from the lower classes to the rich elites. Note for example that when drumpf gave money to struggling 'farmers' the vast bulk of the money (collected via tariffs from the trade war) when not to farmers but to big agribusiness. Wake up, America.
5
NPR was bashing Trump on this very subject yesterday. Their experts managed to put Trump in his place numerous times but never mentioned factory jobs and the workers that aren't working.
Progressive Democrats are for workers and unions they say.
1
Yes Thomas, the TPP was abandoned by Trump. Please remember that Bernie Sanders first denounced it and then Hilary Clinton as well. Chuck Schumer also does not support it. So, the better idea is to immediately join TPP and then engage with the EU. The original plan. This will never happen with Trump but it could happen with a New Democratic President. So this should be a key topic in future debates. Let us see what the candidates have to say. I doubt any will have the courage to defend a well thought out strategy from the Obama Asia pivot. I think we are all going to end up poorer.
7
@Daniel Salazar
The TPP seemed rushed, and public details were scant. Like vegetables, it was supposed to be good for us -- don't ask questions, just eat it.
While it may have helped contain China, it was also very friendly to corporations, and less friendly toward American workers. I really can't tell if TPP would be truly beneficial, so I agree with the politicians who won't support it.
But I do support multi-lateral pressure on China regarding IP theft. But as Friedman writes, Trump has alienated our allies and is going it alone.
2
@Mike Y.
Dear Mike Y. The TPP took years to develop and contained provisions to ensure labor standards, most importantly collective bargaining would be met by all participants. Much material was na is still available on-line. for example https://en.wikipedia.org/wiki/Trans-Pacific_Partnership#Labour_standards
Reagan's idea that the Chinese could be turned to democracy by becoming capitalist was wrong-headed to begin with. (Like Reagan actually understood what democracy is!) Instead, the party leaders gorged themselves on riches scrapped from the blood, sweat, and tears of the Chinese people. Meanwhile, American manufacturing expertise has been hollowed out by American oligarchs who are doing the same to Americans.
I think Trump's approach is ham-handed but at least he's trying. Now is the time to strike the Chinese People's party. In a year, the Chinese people will have enough. They live in fear of the riots of Hong Kong spreading.
1
@Rocketscientist: I largely agree, with one exception: While Xi likely does not relish the possibilities of the Hong Kong protests spreading throughout mainland China, I have zero doubt about what will happen if they do. Thousand upon thousand will die. Think "Tiananmen Square". So, I doubt he fears that very much.
@Jay Dunham,
We fought for our liberty. Let them fight for theirs.
"Trump should have signed the Trans-Pacific Partnership free trade agreement"
Absolutely correct. And Hillary should not have campaigned against it for her unprofitable calculation of political gain. The wiser Obama team, castigated by the Know Nothings, targeted the soft underbelly of the China megalith. Years of cooperation produced a comprehensive Trans Pacific agreement with tons of protections for ALL involved (along with a little sacrifice of sovereignty). Instead now we have soybean "diplomacy." Lose - lose situation with goal of making them lose more than we lose. A King of Queens slumlord philosophy.
9
I’m relieved that the author understands that we must disentangle from this brutal dictatorship. And I do hope we can bring in allies to join us from the rest of the world.
No one actually desires to be ruled by China.
1
Too many see this as a problem that started yesterday, or maybe as far back as China's economic reforms after Mao's death. But this is an issue, like reparations for slavery, that has long historical roots.
China was once the economic engine of much of the world. Then a perfect storm of internal decay, foreign intervention, and new industrial competition came together to make things rather bad, leading to the overthrow of China's imperial system, social revolution, and expulsion of most foreigners. China had been treated unfairly by foreigners, from being forced to allow opium imports, to having to tolerate foreign spheres of economic control and influence.
So how should China act now? Should they forget the past and start fresh as if none of the unfair and immoral things imposed on them did not happen? Should they cheat and scramble for any advantage to catch up?
No easy answer here, as in reparations for our slave past. To be sure, we all should play by fair rules, even Exxon, Volkswagon, Wells Fargo, Facebook, etc. Getting to that point will require subtle nuanced negotiations and carefully implemented change to them and to us.
If we make this into a moral drama and are honest, we will find a lot of blame to go around. Yet the past cannot we swept away in wishful thinking.
Trump and Xi are probably not the best to deal with this, and neither are Bolton et al. The world has to fess up to each countries share of the blame and work towards a better future for all.
4
Trump will not win this war with China because he has no plan at all how to tackle this and he does not know how to . He just felt China is taking advantage in the trade between them and thought that imposing tariff is the best way to bring China to its knees. He forgot that everything in the world cannot be won by inflicting financial pain alone. China has the capacity to absorb a lot of such pain inflicted as they are an authoritarian country. So it is a basically Xi who will decide how he will approach this trade war rather than a collective Chinese decision. And here we have Trump too who does not seek any advices from his own administration or industry greats or experienced bureaucrats. We are witnessing a personal fight between Trump and Xi . And between the two I get the feeling Xi will win as he is doing this with some definite design which we do not know now. Trump will react instinctively which will again go amiss.China is now a far greater power than a decade ago. A win for Xi will increase his stature at home and he will consolidate his power even more.
1
Instead if taxing imports by imposing tariffs, how about giving incentives like tax breaks for buying American. I'd buy American if it was available.
Try buying a USA-made cellphone.
Yeaterday I went into a major American appliance dealer for a window air conditioner. I saw major American brands, Frigidaire, Freidreich, but all of it was made in China. Trump, do something about that. Use all of that tariff money which you took from us and offer American manufacturers, who employ American workers, incentives to resume making stuff here.
3
Every time I buy a greeting card I look on the back to see where it was made. If it says China I put it back and find one made and designed in the USA. I do this because I want to keep my fellow Americans employed not because I hate China. Over the years I tried to buy goods made in the USA until it became nearly impossible. There is also the often the misleading label on goods say designed in the USA but made in another country. So for those of you who say it’s on the consumer, it’s not on me, it’s on management. Even over twenty years ago I returned a pair of sneakers I ordered from LLBean that were made in China (which was before nearly everything was made there) because I could not believe such an iconic Downeast American company’s would sell something I could buy at Target. But now, forget it. I’ve given up except for the greeting cards.
6
And yet unemployment is at all time lows. Meaning that the US has lost jobs (like making sneakers) to China and others, but gained in the form of new economy jobs. Which is a good thing.
2
The “new economy jobs” are low wage fast food and retail jobs.
2
I think there is this fantasy out there that the TPP would have solved everything and by trump pulling out we are now faced with this resulting problem. I know the anti-trumpers would love to think this is true and have been selling it to their clueless followers but this is wrong for several reasons. First every Democrat on the stage last week and Hillary in 2016 said they would pull out of the TPP so we would’ve been here anyway. Second the TPP would have been effective because it was being led by the United States, no one really cares what Vietnam Thailand and Cambodia think they were just going to follow the US. So again we would’ve been here anyway and the TPP was not going to take a hard line against China. This is a confrontation that needed to take place unfortunately Trump is the president that had to do it because he was willing to risk his popularity. I really do not understand the American people who are rooting against the US and tout so many other programs that have short term pain and long-term benefit but can’t seem to comprehend that this is one as well. Strikes me as disingenuous or hypocritical.
3
Can we all stop pretending that Trump has the intellectual capacity to strategize a posture towards trade on China? Trump is just slavish to the diagram of “America First” because it stirs the base— plain and simple. He’s not “right” about anything. Being “right” would require he is capable of making a reasoned argument.
6
Good thing USA Agra business recently got billions from the govt. for the trade war and can expect more. Gotta keep those votes.
4
Telling China that they are "our economic equal" is probably too hard a pill for Trump to swallow. He, and many of his followers, believe that America is king-of-the-hill in every way. It would be anathema to them to allow the idea (much less openly express it) that China might be equal in anything.
3
Go back to the nineteen eighties when Walmart go in bed with a young china and became china inc. Main Street was devastated and it never came back. Now we have Costco and most love it. In other words we all adapted to the new economic landscapes. We loved all those cheap cheap Chinese products that we normally could not afford because we no longer had a job guarantee and a pension anymore. The savings we got from buying from Walmart allowed us to buy health care because that was and still is skyrocketing. Trump is the epitome of the greedy American and Xi the greedy China inc. but the 800 lb elephant in the room is climate devastation. The world is on the verge of bankruptcy because it will be putting out fires in every corner soon. No one will be spared. The bubonic plague for Mother Earth. Soon china and America and Russia will have to start spending resources on a war that will be very hot indeed. So perhaps it’s time for a real leader to emerge. Who can sit at a round table and say enough with all this vanity and greed. If we don’t start working together now, cheap doodads from China won’t matter one bit. Nor will SS-9000 hypermissles from Russia. Our main streets are on fire.
2
Living in the DC area in a largely traditionally Republican/Gove connected community, there is a universal revulsion of Trump. Of "traditional" Republicans (not in office who are far more of a self-serving, cowardly group), my informal poll would say 8 or 9 out of 10 reject Trump. It is not that they favor the hard left. Several of the items which rankled them from the start was his rejection of TPP, embracing of Putin, and rejection of Europe/historic allies. TPP was an artful agreement that not only would have established regional trade agreements, increased our IP protections with China but reinforced the region against China stance. Instead, we have not only made NO progress against the Chinese but we have driven S Korea/Japan/regional players into their hands and away from the US. China has taken our opening and filled the void. Trump's go it alone China policy is a complete and utter disaster.
4
This column is too rich. Friedman spent the last 30 years propping up India and China at the expense of the US. Now when Trump actually did something about it (which all previous presidents failed to do), he thinks his ideas matter. He is part of the corporate deep state that got us in the mess in the first place. This is what happens when you don't put country first.
3
Good, thorough analysis. Sadly, junked you can get this on a number sticker, you’re not going to be able to change too many Trump voters’ minds.
To little to late the dogs of war are already starting to howl. I can't say were the ignition will be. Too many possibilities. But war I think is inevitable. I don't mean just a trade war I mean hot war.
Several loose notes:
1) TPP was dead irregardless of who won the election. Too many of the voters hated it with an awe inspiring if well earned hatred. Despite what the bubble people and winning corporations say. "Free trade" hasn't been a success for most of the voters. Neither party was supporting it and it was going nowhere.
2) China has a long history of making concessions and promises in theory. In practice the so called concessions are outhouse fodder. Circumvented in practice and action. So i wouldn't count concessions or the "Same rules of access"had meaning anything. We've heard it before and it was lie then it's likely going to be a lie now.
3) Lastly and it is actually incredibly significant to this conversation; Domestic Politics! For the proclamations author and so many others. Globalization has been so disastrous for so many working class voters that their response was Trump. And unless we move to face this disaster which neither party has or wants too. Trump and trade wars are merely harbingers of much much worse things to come. Tossing big chunks of of our own population in the garbage in the name of "Free Trade" & Globalization. as inspired them to rage & hate at globalization symbolized by... China. Their is no appetite for compromise among voters.
2
Trump's "core instinct"is just that, no intelligence, no thoughtfulness, just instinct--that is what made him such a successful Casino owner...So far we are only losing money with his core instinct, I worry when this instinct draws us into a war where American lives will be lost over one man's gut instinct.
1
Freedman’s ideas seem to me, to be applicable to the same “over playing” of hands by Democrats and Republicans, and other polarizing thoughts worldwide. We might all be safer towards the center. A shocking admission for some, myself included.
If the GOP believes in the free market, it should kill the tariffs. Make US companies compete. But, the GOP likes the money that US CEO's provide. US CEO's don't have money if they pay their workers more.
2
You hardly mention tariffs as a very bad negotiating tactic and Trump sees himself as Tariff Mn hitting many countries with them beyond China---Oh but wait no tariffs or Russia or Saudi Arabia not even sanctions that even Republicans want. Why? Because Trump is in business with and compromised by these countries and totally controlled by Putin. Russia is failed economic power but much more dangerous than China in disrupting democratic processes. Trump will probably take a step back soon as you suggest because by now through his tweets (and probably in secret as well) he tips off illegally others probably his own sons to short sell stock and then buy back in making big money. Am I paranoid? Trump is capable of this and getting away with it? He has been doing much like it in money laundering and other illegal banking activities for years which he will pay for when prosecuted whenever he is out of office. Mark my word. Yes China needs to be held in check but Trump has made things much worse and the real reason is the same for everything else he does and that is to profit financially by being President given he totally failed as a business tycoon.
2
American pundits are underestimating China's people's capacity to endure hardship. Xi is overestimating it.
When you live under a power-crazed, brutal dictatorship, you’re told what to think and how much to suffer.
Trump will quit this tariff game when he has bought all the land from the farmers he is bankrupting. When will his base wake up?
Unfortunately when your strategy is largely bluster and escalating threats your bluff is sometimes called. China knows it has time on its side as Trump doesn't want to go into the 2020 election without a deal. Trump will likely fold and proclaim its the greatest trade deal ever.
2
Too complicated and nuanced for trump, the failed NY bankruptcy king, to grasp. Plus TTP was Obama's. Trade war will deepen until trump is replaced.
2
Why does Friedman think trade with the near-slave labor countries is good for us? It isn't. It's terrible in fact.
If you go to a department store, or a big box store, and find anything made in USA, you are stunned. It's a miracle. Back in the seventies and eighties, and I'm old enough to remember, everything, except for a few things made in Japan or Hong Kong, was made in USA.
Clothing, appliances, TV's - you name it - used to be made in USA.
We don't want more trade with China. It's a lose-lose proposition. We lose jobs. We lose with GDP. What about expertise? Why should anyone in the U.S. become an engineer? Everything will be made in China. We'll be stuck with selling them soybeans!!! We're becoming a third world country for pete's sake. The only high value-added jobs left will be a relatively tiny tiny amount of folks - many of them on HB-1 visas - in Silicon Valley. China will have all our high value-added jobs.
I hope the turnaround comes soon - like farmers markets making a huge comeback after being gone since about 1930. But media people like Friedman have to stop this insane love of moving our industrial base to China.
Bring back our industry.
4
You give Trump far too much credit and much too little blame.k You are conferring your own beliefs about trade problems with China, that certainly do exist, onto Trump's motivations and tactics. Without being involved in Trump's trade "negotiations" with China, it is impossible to know whether he and his administration are being reasonable in their requests, or simply acting like bullys as Trump almost always does. Certainly Trump doesn't have the patience to work through a true complex negogtiation and he is always impetuous and demanding. Nor is he the least bit informed, and indeed has an ignorant understanding of trade (e.g. trade deficits have to be "won", China pays the tariffs, etc.). Do you really expect China to be able to "negotiate" with Trump in good faith? Maybe they are hoping to just hold out until the election for someone rational and reasonable to work with.
More American deflection.
The real issue is about which economic model will dominate the next 100 years, the fresh and resourceful Commie-Capitalism of China or the tired Capitalism of the US.
An example. If America wants to build a pipeline, they fight about it and debate it for 10 years, and maybe it will proceed. If China wants to build a pipeline, 100 excavators will show up at 0600.
You tell me who will win.....
3
Bad for the economy. But good for the climate, ironically. But it all proves we are in a death grip to the global stream of products and all the fossil fuels and natural resources it takes to support that. It's all so fragile when it gets thrown asunder. We still have the luxury of having a mad man start a tariff war to make him feel like a big boy. Soon climate change will have the upper hand. And when it starts telling us for reals the game is over we are all going to squawk bigly about it. 7,700,000,000 billion people require the global consumption game. More and more each year.
Trump is making the mistakes that the former Big Three Auto manufacturers made. Instead of realizing that consumers really wanted smaller more fuel efficient cars that would last they manufactured small cars that were expensive pieces of junk. And then they claimed that Japanese auto companies couldn't compete if they had to assemble the cars here because of the unions. They were completely wrong and they lost almost an entire generation of car owners. Even now with the SUVs GM, Ford, and Chrysler are not competitive or of better quality.
Trump is doing the same thing. The Big Three decided that they didn't need to learn anything from the upstart Japanese auto companies. Trump has decided that he is the expert on tariffs, how to pressure another government into bowing to his demands on behalf of industry, and that he will win. He and the GOP are wrong. Diplomacy can get us more than all the Twitter storms and belligerent speeches Trump makes. All this foolishness will do is hurt the very people he claims to care about.
Trump is not and was never the best person to elect in 2016. He did not win the popular vote. He is alienating our allies and making a fool of himself on the world stage. Does he think that his bluster and threats will change anything? Or is it the only way he knows to negotiate? If so, this reader can understand why he drove most of his businesses into bankruptcy: he is incapable of working and playing well with others.
8/6/2019 11:34pm
3
By mid-2017, the total amount of official debt owed by the federal, state and local governments was more than $19.4 trillion. That figure was $22 trillion, as of Feb. 17, 2019. Some experts add more than $120 trillion in unfunded future liabilities on the federal government balance sheet.Perhaps China will start calling in its IOU'S and markers. How would Donnie Boy feel then.Be careful what you wish for Humpty Trumpty it may come true. The debt we owe to China makes the trade wars and tariffs seem pale in comparison. He'a always talking about what other countries owe us. Well,put your $ where your mouth is Donnie Boy. Pay the bill.
1
Looks like we didn’t even have to buy The Art of the Deal to suffer through it.
2
This is the kind of mess you get into when corporations have too much power and are blinded by the fool's gold of 1 billion chinese customers. And this is a case where Trump appears to be correct, but since his first move was to dump the TPP, he can't even shoot straight when he acidentally aims at the right target. China is not only too big to bully, it's "Belt and Road" initiative has a created a vast network of countries in debt up to their eyeballs and dependent on China. The reason the USA has remained active and engaged in the world is that as soon as the adults take a vacation, the teenagers throw a party and some pretty bad dudes show up and trash the place...
1
I am not an economist by any means, but it seems so simple to understand the risk we take with Trump that I still can't believe anyone would support him. In terms of trade, there's a lot that Trump should have done...but he's an uninformed fool with a much-disputed business record who thinks his silly swagger will get him everywhere he needs to go. (remember "I don't read the briefings, I go with my gut"?). I am sure Xi (and let's add Putin) are having trouble even comprehending their good fortune. They will happily take advantage while the pickings are good...and I'd say they are excellent right now.
2
We have a "transparent, democratic society"...?? This statement ought to be placed on a 'more/less' continuum; as an absolute declaration, it is an overreach.
1
Trade wars are easy to win. The President says so. Don't worry so much.
1
It must be underscored that negotiating with an authoritarian state is tricky. Lack of transparency, shared values. Should be Glastnost 2.0. Trust BUT verify. We begin in a compromised position. Xi is prepared, measured, poker-faced. Trump is impetuous and exposes his hand via Twitter and tantrum. This won't be easy
2
Sir Thomas of the Friedman tribe's logic is correct (to me).
We can grouse and complain about intellectual theft and all the rest, none of it matters. It's water under the bridge and we must deal with the current reality.
China is too big to eviscerate economically as we did to the former Soviet Union. They are too powerful and proud to bend a knee just because we say so.
So we are left with but one viable option, one that doesn't involve coercion or a club. Working as equals.
I like Thomas Friedmans' simple "tit for tat" idea. You give me access; I give you access. Equal measure for equal measure. It's simple. In a world of complexity it would work.
The question is whether our leadership caste, on both sides, are too polarized to see the merits and so this epic train wreck continues apace; or if they are wise enough to chart a new path, one that is arm in arm, together.
Because neither side is going away; so there's really no other choice is there? The two Alpha monkey's must learn to live together within the context of the overall tribe (of humanity).
John~
American Net'Zen
2
Instead of handling the legitimate trade deficit issue in a strategic way this trade war by twitter may lead to cutting off your own nose to spite your face
The only people who are going to suffer if China expands it’s reach are the oligarchs who brought us this mess in the first place.
The rest of us will just continue on in our little struggles to survive.
"How Trump and Xi Can Make America and China Poor Again"
Mr Friedman would rather that China be rich and American extinct.
2
The collapse of the global economic order is not a by-product of this conflict, it is the intent. I am in no position to analyze the "Why?" of President Xi's actions.
President Trump's actions can be analyzed. The dots are there. Leadership dysfunction makes them easy to connect. The danger lurking, the darkness wafting about in the Oval Office, is the intent of this administration's strategy. A trade war, then a destabilization of the global economic order along with its collateral effects, is the goal.
It is not an unintended consequence brought by about inexperience, boyhood playground behavior, or even aging-related mental failings. It is the implementation of the writings and projected strategies of Julius Evola (the 20th Century Italian Fascist and astrologer). His writings serve as the mental architecture for early Trump adviser, Steve Bannon. Today, Bannon's late-night private phone calls further inoculate our president with theory and strategy of how to collapse the world order, then rescue us to then-to-be-welcomed USA Fascist state.
The Beast's purpose is global disarray and suffering, the presence in the Oval office of Evola and Bannon teaches us. Those conditions provide what Evola and Bannon project: the perfect staging ground their far greater USA, one without the "natural failings" of Western Liberalism.
In short: Trump, left alone to Bannon/Evola's purposes, ends the USA's " Grand Experiment."
2
With all due respect M. Friedman, I much prefer two internet than one controled by China. If we let China dominate our world look at Hong Kong and see what could happen to us. Is that a world you would like too live in ?
2
I feel for the poor farmers who voted for Trump and believed his words that " trade wars are good and easy to win."
Trump is fueled by narcissism, driven by arrogance and supported by ignorance.
For every day that he's in office, this country takes a step back in time and erases some of our legacies.
1
What's the deal with USA trying to create "wars" with everyone. Must be ingrained in their blood or something. A lot of these issues could be worked out if they sit together till a deal is finalized.
1
I feel sorry for anyone trying to negotiate with President Trump. His negotiating style is the same as it was when he did real estate deals - threaten, cheat, then disavow your committments. Deutche Bank learned the correct way to deal with Trump - after being robbed of a fortune bank robbers can only dream of: just walk away. No matter how much you think it hurts, just walk away. A deal with Trump will be infinitely worse. China is guilty of a lot, and they should have dealt with Obama, rather than thrill their masses by making him climb out of the cargo hatch. But now, China's only option is to walk away and endure the pain.
The trade war is heading in a dangerous direction for the whole world.
Whole ???
Wrong
Vietnam's economy grew 8% last year as supply chains shifted . The Vietnamese couldn't be more thrilled.
2
If anybody believes that Trump and his trade war is being done for American business and workers, “ I have a bridge in Brooklyn for sale”. Trump wants low interest rates, by “Fed or by crook”. It looks to me that fed rates at one percent or even zero, help people with “bigly” interest rates like real estate moguls Jared Kushner on his “white elephant”, 666 in NY City. They can refinance and buy more. Low rates also help home buyers and refi customers. I have to confess, all my retirement contributions went to government bonds this year. I did it because I felt an unstable president required stable investment. Watching the interest rate decline, I know that Trump is unstable “like a fox”.
Why would the world's smartest person ever - I mean really... in all history - why would that person not go it alone?
This is so naive.
Trump is right in (only) that the US was asleep when it handed one sided "free" trade advantages to China.
Now that is OK sort of economically. All ships rise on the tide, however their ship rose about 10 times the rate of ours, that barely rose at all.
But what was NOT OK, and still is not, that was in doing so we handed China military supremacy. They have that already, and their Economy is now larger than ours.
And they are a horrendous totalitarian state .
So stop talking in simplistic terms about economics and tariffs. This is about geopolitical supremacy. And China is winning - and I dont like that.
1
The most notable thing about this otherwise excellent column is what it does not discuss.
On one hand, President Trump does not actually have policies nor does he have the judgement to choose good advisors and listen to what they are saying. As well, he has no clue as to the necessity of non-political and reliable intelligence organizations. (One might say that instead of policies he has randomly firing synapses, instead of knowledgeable advisers he has members of the Toady-Of-The-Month Club, and instead of sourced intelligence he has "alternative facts.")
Meanwhile, the 847 Democrats running, jogging, walking, or preening for President have nothing to say about foreign policy, and the "debates" (their version of The Apprentice, with the twitterti and punditocracy getting to say "You're fired!" and "You're hired!") contentedly proffering no real questions about foreign policy and international trade.
One bone to pick with Friedman: China is more a Leninist country, not the communist country he claims. Essentially it is an oligarchy-sanctioned dictatorship, whose economy is a combination of politically purposed state enterprises and hyper-capitalism, the only restraint on the latter being that it must conform to the dictates from Beijing.
62
@Steve Fankuchen
On one hand, haven't exactly the policies developed by "those good advisors" over the last quarter of century put us into such a dire position?
3
@Steve Fankuchen
Both your criticism of Trump and your actual comment are well-put.
The former analyzes the inadequacy of the Trump Method to the problem at hand, and does so cool-headedly, rather than itself replicating the Trump Method.
The latter recognizes that the absence of Trump will not spell the absence of the problem, and accurately surveys the preparedness of any successor to address it.
1
@Steve Fankuchen I agree with your first point, China's political system is based on Lenin's concept of government. But political concepts in China aren't a religion, as they are here, so I wouldn't use you term "Leninist."
So then, you conclude, China is "an oligarchy-sanctioned dictatorship, whose economy is a combination of politically purposed state enterprises and hyper-capitalism..." and so on.
Oh my! Categorization is not understanding!
Soooo won’t we still need tee shirts toys and tennis shoes? Won’t they still need soy beans and jets? Won’t the greedy CEOs simply shift to the next cheapest? Maybe made in USA will make a come back. Maybe Americans will stop squeezing that nickel and buy USA union made quality. Maybe just maybe Trumps got it right. We have been cheated so long by our elected representatives that Americans don’t remember when made in China or Japan meant junk. I support Trump on this. Take it to the limit and then bring it back home!
19
@J Clark What, Made-In-USA textiles, shoes and toys? Where are you going to find Americans clamoring to spend 12 hour days hunched over a sewing machine or filing the rough edges off injection-molded plastics? Those industries would have to be completely rebuilt, just to produce low-cost consumer goods, which no company is going to do, even if they could find the labor.
42
@J Clark
Perhaps, after a long painful recession.
People don't buy goods in an economic downturn, and thus the vicious cycle that more thoughtful leaders strive to avoid.
Maintaining prosperity is done through expertise, strategy and cooperation, concepts that are alien to trump.
23
@J Clark,
There is no reason for Americans to assume higher prices are mandatory. Chinese factories are already moving production to Vietnam, Indonesia, the Philippines, and other countries with lower wage rates than China while retaining the middle class supervisory and management functions in China, copying exactly the pathway of the USA in the early 20th century.
Clothing factories first moved to Mexico. Shoe production first moved to Spain. Each successive generation has taken advantage of lower wage rates in precisely the capitalist mode now being employed by China. Yes, it is state-orchestrated, but it does not change the fact that a world built on capitalism is not going to bring low wage jobs back to a high wage environment. That is absolutely non-competitive and means isolation and failure for the nation that tries it.
18
Let's see, Trump has already been through six bankruptcies. Will the U.S. be his seventh?
8
No doubt, there are a ton of problems with the way the Chinese government is operating, but Trump has only made moves to push back potential allies. Meanwhile, Xi can just wait out Trump's presidency and come to a deal with another President in another term...The only thing that will happen for sure in the meanwhile, is that the consumers and citizens of the two countries, and maybe even globally, will suffer.
1
I have known for a good while that the mainland China has always been an oligarchy. It has been rather surprising to learn in recent years that this also applies to the United States of America.
We are partially responsible for rise of China. Be it greed of our Industries, who, when China offered very lucrative deals were willing to dump American workers to move to China or our Government that conveniently turned a blind eye when news started filtering back to US that China was either stealing our technology or coercing our companies to part with it. At the same time China has been heavily investing in their armed forces and started have expansionist views. Some one was sleeping at the wheel in US government.
I feel the only option we have now is to encourage our industries to exit out of China and then follow the plan as laid out by Thomas Friedman.
3
There is animal inside man. It tries to come out every now and then. That was the reason our ancestors fought two world war.
We are now paving the way for third one.
2
“Animals” don’t fight wars. That is distinctly
Human.
1
Good incisive piece. Most Americans fail to grasp the major differences between oriental and western cultures. We ignore the lessons of war on their side of the Pacific. The concept of choosing death over a loss of face seems dumb to Americans. We’re also the relatively new kids on the block. China in particular has been a major world power in the past, currently has the world’s largest population and is clearly on track to replace the USA as the paramount world power when America finally explodes or implodes due to our unconstrained self interest.
2
The ultimate question is "Who can wait this out?". If the Chinese economy goes south, what will happen to Xi? Um, nothing. He is what Trump wants to be....President for life. And will the Chinese people amass in the streets and protest? If you want an answer to that, just sit back and watch what China does to stop the protests in Hong Kong. And how about Trump? If the U.S economy suffers, the voters will blame him and he will become a has been. And maybe the Chinese will do as the Russians did and help the voters decide. They are probably far better at it than the Russians are. For centuries really, America thought we could get away with anything and we would always come out on top. Making it look like you are not what you appear to be is an American trademark. Perhaps the Chinese are stealing that too. Not fun to have to look in the mirror and have to deal with the distasteful reflection that sits there in front of you.
As I read this complicated article I find myself wondering if Xi will simply tread water with the hope the clock will run out on Trump and he will be gone after the 2020 election. Trump and his big fat gut, over inflated ego and America first stance may have been right about China, but it will take a new American president with a fresh approach who can hopefully solve this mess with his brain, a cool mind and an even temperament. Donald Trump is great a breaking stuff but he sure isn’t very good at putting Humpty Dumpty back together again.
1
“China is a nontransparent communist society, and ours is a transparent democratic society.” Not quite. I live in North Carolina. It is a non transparent oligarchic capitalist society. No democracy down here!
3
You can’t go back. Trump tore up deals and arrangements that were years in the making and that ultimately depended upon mutual trust not so much between the US and China as between all the European and South Asian nations. Can it all be reestablished? Food for your next installment.
2
Note the careless comparison in this column that "China is a nontransparent communist society, and ours is a transparent democratic society". Ours is capitalistic. Both claim to be democracies.
1
Tom Friedman is so nice it feels odd to call him “Mr. Friedman.” But privately (and affectionately) I think of him at times as “Polyanna.” Mr. Friedman has largely resisted Donald Trump’s effect as the opium of the elite, but I’m not sure he has accurately assessed the trans-Pacific challenge.
The “Polyanna” in me had high hopes for the TPP. Its full text should have been blazoned proudly on stone tablets. The energy with which that was resisted, and skeptics demeaned and marginalized, spoke volumes. The TPP was doomed by idiocy, and by vigilance. China has thoughtfully given us every reason to try again. In February 2021 idiocy will no longer be an excuse. Keep that vigilance handy.
1
« Trust and share values, that is why Trump has blocked Huawei ». Please we are not so naive. It is true that the US should have built an international coalition to negotiate.
1
The two leaders Xi and Trump are similar in exhibiting a lack of regard for the welfare of their country's (or any other's) people.
Where they differ - significantly - are the consequences regarding the strength of their economies. For Xi it means little
as long as his cronies are happy. Not so for Trump for whom it could mean a dramatic difference in residence. The likely possibilities being the White House or a jail cell.
in a perfect world Mr. Frideman's observations would have merit; however reality has demonstrated China's practice of stealing technology, pirating R&D, forced business "partnerships", and using tariffs to obstruct sales of imports. China has boldly manipulated their market to a position of overwhelming strength that gives China an unequaled strength in trade.
1
Isn't the core issue that the US now has an economic and marketplace rival that poses a serious challenge to US hegemony? The rest of world has had to integrate with a lot of 'deep' US technology for decades and yet now that the tables are potentially turned, there are suddenly issues. The post WWII US dominance that we've enjoyed for the last 74 years is over. We'd better learn how to live more harmoniously with other countries in this nuclear age. Part of this might mean that Wall Street and US corporations be content with less than complete domination of the Chinese market.
2
This unfortunate situation is centered around the greed of U.S. policy ambitions 30 years ago to sell China our aging manufacturing base and morph into a world service based economy. With a "kick-the-can-down-the-road" mentality the U.S. did not address the issues of copyright infringement with China because there is nothing to discuss because they do not accept our values on this ownership issue. So, we moved forward and sold our equipment while leaving the next administration holding the bag...end of story. We had TPP which allowed a unified alliance to address the issue but this administration dumped it because Peter Navarro thought it would be easier to go it alone than to fight as a consortium of aligned interests. Time will tell.
“Then Trump should have lined up all the European Union countries, which have the same trade problems with China as we do, on our side.”
Good idea in theory but have you noticed that the EU countries can’t even align amongst themselves? In fact, they are having the Brexit crisis right now involving intra-EU trade disputes.
If we were to wait for the EU to align with us, we’d waiting forever.
2
You're not wrong about what should be issues in trade talks between China and the US, but you completely miss the reality of what is going on.
You're overthinking it. Trump is not capable of creating a policy and he hasn't now. Gong back to the sanctions on ZTE, Trump withdrew them after getting a large bribe in the form of a Chinese loan to a real estate investment of his. Everything after that is just a shakedown in hope of getting of more bribes. Xi is angry that Trump won't stay bought and is digging in.
To form a strategy in this trade dispute with China, one has to understand China or Chinese Government first. What does it want? It wants to maintain its control and power, and to support this, it needs stability, to support its stability, it needs to feed its population, and to feed its large population, it wants resources. So its ultimate motive is resource, and natural resource that is in limited supply, and the technology that can produce more economic goods with less resource. OK, now let’s see the other side of the dispute. What does US want? US also wants stability and wants to maintain its democracy. It also needs resource, although maybe in less urgency given it has less population and more resource in disposal. So ultimately, this trade dispute is about resource and especially resource that is in limited supply. China likes to think the time is on their side because of its control over its people but no, time is on the US side. Without trade and expansion, US can support itself longer than China can. So the ultimate winner in the prolonged trade war is going to be US. But we need to be clever. We need to have the rest of the world as allies in this dispute. Make it clear that the larger share China gets from the world’s resource supply, the less the rest of the world gets. It is a zero-sum game. No matter how you trade, the limited natural resource supply will not grow. So we need to contain China and its ever-growing appetite.
2
Very interesting article.
China, however, is still not in the league of America or other OECD countries in terms of personal income and wealth.
Innovation and technology are in fact the better way to economic development, not just for China, but Saudi Arabia and most other countries.
The US trade negotiation strategy gives one the stronger impression that they simply don't want China to further develop and get ahead, like what they did to Japan under Reagan.
Yet multilateralism should be a better path for the world.
2
Part of the problem here is that Donald Trump failed to deliver on his promise to make America great again by failing to bring more manufacturing jobs back home.
And the fact that China basically makes most of our products, or the parts for most of our products at a cheaper rate is what drove U.S. industries to take their business there in the first place.
No doubt this trade conflict is going to hurt the American consumer the most, as they will end up paying far more for products as the costs will be passed on to them.
For Trump, who's too busy tweeting and running around stirring up problems, this couldn't have come at a more decisive time.
After all, the elections are not too far away.
And at this rate things look to get a lot worse before the get better.
If it does at all.
1
Talks do lead to solutions and we need to have a reboot with China. Here are a few suggestions:
1) China should seriously consider joining the first world and realize they can’t have it both ways with their unfair trade, economic and human rights policies.
2) trump is incapable of resolving this dispute because he only knows how to play the zero sum real estate developer game. Over promise, coerce, bend sensible rules, blame, etc., to get his project approved and built...and then refuse to pay his contractors! So China should hold their noses and just ignore trump for the time being. (Probably a good thing for most Americans to consider, too if that could be possible.)
3) A New Democratic presidential administration is coming in 2020. It will prove to be much more able to work with China and other Pacific Rim countries to come up with a more fair and reasonable trade program that will intelligently address most of the current sticking points over time.
Like with the impeachment issue the cleanest way to go is to prepare for the new president in 2020. The FED will keep the situation with China from getting worse. trump doesn’t want the stock market to crater so he will do what he always does: back off after jaw boning.
To show the US is sincere about fair trade, would Trump open up the American beef and sugar industries, to foreign competition?
2
Donald could benefit from some economic advisors- that is true. However spreading gloom and doom of worldly proportions denies some very basic truths:
1. all economic experts agree that China needs to be addressed, but tariffs are not the only and best method.
2. The tariffs can be lifted rapidly and the market surges
1
The Anthropocene can now be divided into two distinct eras:
BT (Before Trump) and AT(After Trump) or sometimes, ATC (After The Calamity).
1
There are two main points in this article
First: Mr Friedman, and the so called West, would be fine as long the previous trade structure remains, that is, toys for planes
Second: The so called west is benign and China is malevolent in their use of technology.
The first situation was bound to end sooner or later due to its obvious unfairness to the chinese people's, and all the worlds peoples, aspirations for a better life.
The second situation remains to be proven in my opinion. I have not seen anything that makes me think that China aspires to the kind of world domination the US now enjoys and is trying by all means to hold on to
4
Absent from this discussion is the role of the American consumer. They were and are not forced to buy products from China or any other country.
1
But there is a difference. China makes long-term investments in their markets all over the world. For example, when they develop soybean farms in Brazil, Russia or Eastern Europe, they won't be coming back to the U.S. You can say the same for their high-tech and consumer suppliers and markets.
By freeing China to lower their exchange rates, Donald has encouraged them to expand exports to other countries, so they will be less dependent on the U.S. I am sure that on their long-range radar is becoming the world's reserve currency.
They have more room to go up, while we have more room to go down. Donald will Make China Great Again.
8
Well trump voters? How y'all doing?
Walmart is in the process of changing their slogan
"save money, live better."
I'm surprised trump hasn't told you that the pain in your wallet is better for you in the long run.
Please own this. Democrats aren't on watch. We are passengers right now.
Cue Titanic Iceberg scene.
5
I said regarding TPP that we could stand with Barack Obama or we could kneel before Xi Jinping. The Democratic Party did not support TPP, another case of the perfect being the enemy of the good. Even Hillary Clinton turned tail and ran from it.
Now we have an unreliable negotiator who has cost us all the support that we needed to get something done. I don’t see a good end to this, for the U.S. or China.
6
One data point is sufficient to untangle this dilemma. China has 1.3b people and we have 320m people. Remember that in Chinese culture, the government "tells" everyone what to think and what to do. Thankfully, in America we all have the freedom to voice our opinions and act freely.
Should we expect to bend that many people, in an authoritarian culture to our will? How? With a carrot or a stick? Both?
We will soon find out. As Mr Friedman says we may not like the result.
3
How many Chinese do you know? Believe me they are not robots to their government. A great many are well educated. They know the history of China’s relationship with the west had not always been positive & while they admire us in many ways, they do not trust us unilaterally.
4
@Mary Sampson
Ms Sampson, thank you for your response. My comment was meant to indicate that the citizens of China have to "live with" a regime that does not allow them full freedoms. It was not meant to offer an opinion about any individual Chinese citizen or their capacity to lead meaningful and rewarding lives.
It is interesting to speculate who among the Democratic potential candidates Tom Friedman would favor to get us out of this mess.
What is happening on trade and internationally in general will be hugely important to the welfare of the US. Yet it is an indictment of our system that the nominating processes leaves this dimension of the President's job untouched.
The press has a role to play in helping reveal the qualification of Presidential candidates in all vital aspects of the job. So whether or not it instinctively occurs to the public, the press should probe for us why, say, Kirsten Gillibrand, Kamala Harris, Cory Booker, Bernie Sanders, and the rest feel they would be best to deal with the likes of Xi Jinping, Kim Jong un and Vladimir Putin on our behalf.
3
There are two concerns that I have with this analysis of China vs USA trade. One is a grave omission. China has control of rare earth minerals that are used in most if not all of the USA technological and military hardware. That is their ABOMB in trade negotiations. Regardless of TPP or EU partners this will be a sword of Damocles over our heads.
Secondly to assume that mutual respect and dignity will work requires that both sides have a culture that shares fair play as a norm of behavior. Unfortunately the concept of fair play is not inherent in the Chinese or other autocratic political systems
1
The US has plenty of rare earth materials and they’re sitting in dumps as old computer parts because nobody is willing to spend the money to recycle the electronics that contain them. There’s a gold mine there, too. The recycling process has a problem - it’s bad for the environment given what else is released. That’s what makes it expensive. If research could figure out a good way to do it, there would be no shortage of rare ear5 materials here.
4
The Chinese do not see the west as a ‘fair play’ culture. History did not start in 1969 when Nixon went to Beijing. The west took great advantage of the Chinese in the 19th & early 20th century & all the Chinese know this history.
3
Let’s not forget Obama called them out, but he was playing chess not dodge ball. Remember the TPP? That was the US China strategy, collective economic force to stop their unfettered practices.
Bombast and twitter rants about China were to benefit the Trump brand with his base, never about a strategic well thought out position for the US. SAD!
15
Right now a trade war between USA and China could be the only thing that can make sure Trump is voted out of office in the 2020 Presidential election, because US voters usually vote for the sitting President of the USA if the economy is good, but vote him(/her) out of office if the economy is bad, after/during a trade war!
The Chinese dictators can afford to wait, but the President of the USA and his Republicans can not afford an ongoing trade war during the 2020 election!
3
Trump is an unreliable negotiation partner. He's apt to self-contradictory reversals and impulsive actions . Since the Chinese are aware of this, and are traditionally patient, they will wait out this Presidency until they find a new partner. It's that simple. In between now and the end of Trump's Presidency (1 year or 5), there will be battles but no decisive victory or stabilization of relations.
China will continue to quietly consolidate its control over their population, rebuild its infrastructure and continue its hi-tech research. Our own workers will continue to fail and blame immigrants for it. They and Trump will go to their graves believing that they won.
12
It might help to understand that America should not be trumped by our president, the leader of a young nation, poking China in the nose. and getting pounced on in return.
It is too late to teach him 'how to think', and he would have to learn the meaning and measure of diplomacy. Biden was able to establish an understanding with China, without announcing the benefits of cordial relations, and our European allies have been cast asunder.
The two Superpowers now in confrontation, as we slide into Isolationism; law and disorder rule supreme in our democracy, and our country is becoming a police state.
Where is our G.O.P. in these times of uncertainty? The Supreme Court remains silent because its role is rigid, and nobody appears to care about the Transpacific-Partnership Alliance.
Our Global Financial Markets are struggling; Atlas is not shrugging. Implement an international economic forum and restart negotiations, unless we have a preference for sitting loudly on our thumbs and grousing.
3
Even before the Trump leveling of the trade floor ... it was obvious to anyone with any common sense that China would
eventually implode. The path to that end has been spark nudged by the Presidents actions against China and others as well who have pin-cushioned the US economically for decades.. It took years of bad Government policy & sell out greed by US corporations to get US where are. It will take some time for the situation to winnow out... Globalism has we can again more clearly see -- has its complications.
China will not implode. It’s more likely that the US will. China is working hard to build a population well educated & ready for the 21st century while we are waiting for low information factory & coal jobs to come back.
1
Keep in mind, the jobs largely aren't coming back to the states from all this. Manufacturers who don't want to wait this out are simply relocating or investing their supply chains to the next bidders: Vietnam, Bangladesh, Indonesia, Mexico, etc. Meanwhile, China on the other hand is practically halting major imports from the US, especially agricultural products.
The net result? Prices for the American consumer nudge higher, profits are slightly lower for US businesses, US farmers have fewer customers, lower sales, more bankruptcies, and the trade deficit remains unchanged. You've essentially shot yourself in the foot.
9
Someone always makes money or benefits from conflicts and violent and nonviolent wars. Trump and Xi are just diverting their respective economies inwards. Both the USA and China have poverty due to inequality distribution of wealth. Though the richest people in the world are in the USA and in China, I doubt whether any of them are going to be poor. Don't worry Thomas they are not going to be poor. In this trade war, the only people who will be affected will be the consumers. I am not too sympathetic to the well to do consumers who make up possibly 80% of the consumers. By well to do I mean those who buy consumables that they do not absolutely need.
Consumer confidence is at an all time high. Stock market is at an all time high although up and down but essentially higher in the past 2 years than any time in previous history. More Americans of all races, genders and national origins have jobs driving big fat cars, SUVs, trucks burning more fossil fuel than ever before. The trade war heading to a disaster is just fear mongering and seems like chicken little and the sky is falling. If anything the Trade war started by Trump admin. seems to have been the only way all the past talk of the past US presidents of China's unfair trading practices is getting addressed with action.
I am not an economist nor a politician, I am just an independent observer. In my humble opinion, the world will be a better place when all is said and done An era of fair and free trade will be ushered.
4
Trump's penchant for undermining any of Obama; achievements and his constant need for conflict impacts on his judgements. The tpp was an effective multi lateral agreement that prohibited China from expanding it's markets without the negative impact on American enterprises that results from Trump's feeble attempt at unilateral agreements. The no drama Obama approach was Trump's ongoing need for self aggrandizement.
3
After all his trips to China and columns about China, Friedman has so completely missed the boat it’s embarrassing.
A trade war with China is not the end of the world order of 30-50 years. First, China became what it has become starting well after it joined the WTO in 2001. Second, there is already a world of “two-internets” because of China’s (and others’) Great Firewall. Third, the pro-business and pro-China view of “don’t rock the boat” over many years was espoused by Friedman! That viewpoint is partly what is making our challenge to China so much more difficult. “You are too late; China is too big now” was a very good point.
When Friedman says the Huawei fight is “complicated”, he laments his own inability to understand why we don’t like Huawei. Deep down he believes this is purely an economic fight, when it will always be about values.
The trade war, in essence, is an attempt to roll back the greed that blinded us for the past 15 years or so. We will pay a price now, but China must be stopped, and economic threats are much stronger in China than diplomacy.
2
Sorry but you missed the biggest point that Friedman points out and that is undeniable- Trump came in and completely undid any possibility of setting America up soundly by working WITh are allies who are no more our allies.....in today’s world the only way forward is together....America will loss alone!!!
what is surprising to me is that DJ Trump continues to surprise people... he is just rehashing the ways and means he applied to doing business, now as USA President.
It doesn't take much effort to know what Trump did to businesses he ran... therein lies USA's future. What can USA do while Trump is US President? well US voters and US Senators and Congressmen that is in your hands to act on now and in coming elections.
The battle between the ageing Eagle and Red Dragon means the rest of the world must unbuckle itself from past dependencies and assumptions. The opportunity? rise the new alliance.
3
Trump’s approach lacks ignorance and context of the worldwide supply chain that American corporations rely upon to produce products, whether manufactured in China or elsewhere. Any analyst will tell you that today’s “transaction” is not a one on one affair. It is a series of interconnected and complicated transactions among suppliers and producers working to create the hum of a world economy.
This conceptual framework is not new, it goes all the way back to “Just-in-time manufacturing” that allowed Japanese car manufacturers to compete so effectively in the early 70’s.
Trump and his advisors are decades out of touch.
3
Who is Friedman trying to kid here? We have had a 'digital Berlin Wall and a two-internet, two-technology world' with China for a while now. Also, Trump isn't wildly applying tariffs to other low cost producers. What he is doing to accelerating the inevitable movement of high labor production out of China on our time scale and not theirs so that we can leverage that in trade negotiations.
4
Why was China given most favored status when they refused to expand democracy and banned political parties and labor movements? Was it greed? My personal feelings are the United States should ban all future immigration and put a 20 percent tariff on all imported goods. We should seek a balance in trade. Equal value of imports and exports. I'm sure people will howl that we will become much poorer. I suspect that might depend what we value. I don't need anyone to clean my toilet, I can do it. I can pick up my own takeout, I don't need delivery. I'm willing to pay more for food and clothing. I'm willing to pay to have my I Phone assembled in the USA. Much of the work can be automated. I don't want to control the economies of foreign populations. Today the United States is attacking Iran, North Korea and Venezuela by cutting them off from the world banking systems. We are using our power to threaten all of Europe, Russia, and now China. What right do we have to tell others how to live?
3
Poor? We would be bankrupt! You obviously do not understand the supply chain or the international financial system.
"the globalization system that has brought the world more peace and prosperity over the last 70 years than at any other time in history."
It has also led to the situation where there are enormous differences in wealth between the rich and the poor.
It has also led to a situation that China is now rich enough to threaten its neighbors like Vietnam and Taiwan.
The current system does need reform.
4
Trump thought Xi would blink and of course Xi will not blink. Trump somehow thinks all this diplomacy and political "stuff" is the same as his real estate transactions.
The more time that passes illustrates that Trump is uniquely indisposed to the job of POTUS. Running a country on "gut feelings" is dangerous and anathema to the complex position Trump holds.
15
Superb Op Ed analysis!
However, I think in the end China and the US will go their separate ways. One of Trump's legacy disasters will be jettisoning of the TPP.
As Thomas Friedman points out, that was really the only way of effectively containing China going forward.
The more I read about China, the more I'm convinced that its end game is to totally dominate the world.
Their hegemony will be totally unlike American hegemony in which the rest of the world wanted to emulate America through its values and consumption of all things American.
Chinese Hegemony will be quite different and modeled after its own Authoritarian system. With widespread use of AI and social credit scores to monitor and track and manage its list of "enemies".
If you want to know what that will be like, just read George Orwell and the many other dystopian novels that have been written in subsequent years.
I fear, however, its probably too late. When Trump jettisoned TPP and adopted "America First" he set the world on a course of "Me First". It will take a remarkable leader to bring the world back into America's sphere of influence.
Unfortunately, with the exception of perhaps Michelle and Barrack Obama who fired up the World's imagination of what the world could achieve together, I don't see any obvious candidates on the horizon.
14
This is the most clear head analysis of America-Chinese economic crisis. I am afraid that an economic "cold" war with china may not stay economic and may not necessarily stay "cold." American diplomacy in the past 70 years has teed up a play where America could negotiate with China in strength with TPP, trans-Atlantic, and trans-American partnerships firmly on our side. In two years, Mr. Trump squandered it all....truly "sad". What is broken cannot quickly mend and so we must move forward. This article also offers the only solution forward with China as equals.
9
".... fracturing the globalization system that has brought the world more peace and prosperity over the last 70 years than at any other time in history."
Are we sure that the economic globalization started in 1949 when the NATO was born and the Cold War divided Europe?
Furthermore, should such a punctual piece not provide at least some reasons of the blind American strategy to promote the China development?
How did it happen that the American superior capitalistic and democratic civilization has never thought about the inner Chinese qualities to work hard and successfully build up their own tech economy?
Business is business and the latter world always sticks to the short term huge profits, leaving to the political institutions the task to imagine the long term future.
But is any American government, in particular the current one, able to devise a balanced strategy to keep the globalization alive and China under control?
5
China cannot afford this trade war. Already, manufacturers are pulling out--and more will be right behind them. Soon, it will turn into a torrent. This is turning out to be not only an economic disaster for China, but a political and social one as well. When added to this, the unrest in Hong Kong--it only gets worse for Xi.
China will make a deal. At some point, it will be necessary. That's what Trump meant when he said "Trade wars are easy to win". But for now, it's a waiting game--made more difficult by disloyal comments uttered by the Democrat party, and their lackeys in the liberal media.
7
If only the American people would agree with whatever their Dear Leader says and does, all would be fine.
The communist Chinese government focused their efforts in enhancing their national technological know-how from forced sharing of technologies, made their value chain world class by training their workforce and constantly improved their industrial eco-system. Their technology infrastructure was supported by making their underlying supply chain truly global in scope and scale. Over the past 4 decades, they invested in R&D on a massive scale, stole technologies where the gaps were large (eg. 5th generation fighter planes), and built a behemoth advantage in their maturity of technological capabilities.
In short, the state supported, centrally planned economic system gained tremendous competitiveness over the short term focused profit driven US capitalist system.
US is no longer competitive vis-a-vis China in producing consumer goods. China does not have to play by the US rules. TPP or not, China has gained tremendous advantage in becoming the factory of the world. It can beat the west in 'deep' technologies.
What has US got to offer? Not the commercial planes that China has already developed making indigenously, or the US soybean that can be sourced from Brazil and elsewhere.
Globalization is not the answer. It has hollowed our capabilities and displaced millions of productive US workers into poverty.
7
It only hollowed out our capabilities because we did not invest in our people the way China has. China does not want these low-information jobs. They are preparing their people for the 21st century. I was in Beijing last year. Our hotel had a Saturday math contest for 4th graders. What are our 4th graders doing?
@Mary Sampson: Very true.
Reciprocity won't work very well unless you are willing to cut loose all the US corporations that have invested in China and the products they send back to American consumers. I haven't noticed that our capitalist country is willing to treat corporations that way.
5
Trump’s problem is that he doesn’t have the patience and acumen to untie a Gordian knot. He cuts it.
His idea of a “perfect deal” is to have every issue lumped together in an agreement. He seeks to do it with Iran and with China.
In diplomacy it’s not about WHAT to do that matters, but HOW. Trump doesn’t have the right people to negotiate. Besides he wants to dismantle Obama's legacy.
Unlike Trump, Xi Jinping is here to stay. China’s economy is at a crossroads, with party control going in one direction and the market in the other. The question is how he will handle the trade war.
Perhaps a bilateral trade deal both sides could live with might be struck before the US elections, because Trump and Xi need stability at home.
Being the world’s second largest economy, China deserves to be treated with dignity and be on a par with the US. But given the authoritarian nature of its leadership, its expansionist ambition, its assertive/aggressive stance in foreign policy doesn’t go down well with the international community.
Even if the trade dispute is resolved, the technology war will carry on. This could lead to a wider decoupling of the US and Chinese economies, dealing a blow to China, due to its deep integration into the global supply chains, technology and finance etc.
Xi shouldn’t rule out a cut-off from the OECD world if decoupling becomes reality. The best face-saving strategy would be for him to step down and let a successor correct the mistakes he has made.
3
I wouldn't look for a resolution to this problem to even begin before Trump leaves office. Trump has used the same heavy handed negotiation tactics everywhere, so he hasn't made any friends to stand by us against China. Also, he has demonstrated with Mexico that he will go back on a deal in order to score short term political points at home. From the point of view of China and our other trading partners he can't be trusted.
5
American companies operate on a timeline that is months long. Quarterly reports are what determines a CEO's success or failure. A few bad quarters and s/he's out of there.
The Chinese operate on a timeline that is decades long.
Fortunately, President Trump has called the Chinese game what it is, seeking the demise of America as the world's preeminent power. Mr Friedman and others on the Left seem to hate Mr Trump more than they fear China. IMHO, Mr Friedman and the others on the Left would be the first to go if the Chinese accomplish their goal.
3
Many here blame US corporations and management for the loss of US jobs and IP to China. What is forgotten is that individual US companies on their own cannot fight the Chinese government any more than each person commenting here can individually fight the Chinese government. Huawei cannot fight the US government, how can Amazaon or Google fight the Chinese government? The only way to fight the Chinese government is with the US government - and that is what Bush and Clinton tried to do. Let’s give our companies and US citizens a chance by letting Trump try something different than Bush, Clinton and Obama tried.
4
Here's a basic question: why should the average American care about US companies having access to China. If you don't own any shares in the company, what good does it do you? Why is it of any benefit to the ordinary American that GM sells more cars in China than America? Seriously - not a rhetorical question.
8
It could be because companies selling more products to China can hire more people, spend more on R&D and pay more taxes. Selling less of anything leads to layoffs, downsizing and eventual closure.
3
Mr. Freidman is correct in that Xi is no angel. But the Chinese play long ball and think in terms of 100 year plans. Trump is thinking about 2020, nothing more. "Trade wars are easy to win!" I don't think so. He is not dealing with some small heating and plumbing contractor he can muscle. When Chinese citizens are asked to tighten their belts, their only question is how many notches.
19
As a counterpoint to Mr Friedman’s final point - Shaun Rein has pointed out in his book The War for China’s Wallet that the homogeneity of China’s consumer base and the control of viewpoints by the state media means even with equal access for US companies, the Chinese can use nationalism and a coordinated media campaign to bias its citizens from buying certain foreign brands, even though the same is rarely seen here - except when the very busy GOP congress voted to rename French Fries to “Freedom Fries” because France rightfully thought their campaign to invade Iraq did not warrant their support
3
@Dutch
China has more leverage in this area because Chinese people buy way more from American brands than vice versa. How many Chinese brands could most Americans even name? But American brands from Starbucks to Buicks are huge sellers in China. These products may be made in China, but the profits are still going to the US corporations that own the brands. If the sale of US-brand products in China were included in the trade deficit, that deficit would practically disappear.
Travelling from Beijing to Xian in a superfast train last month, travelling at 305 km/hour, I was thinking about our own railway system where the speed barely averages 80 km/hour, and private freight trains have priority over Amtrak that transports humans.
Using trains as a metaphor, we don't have a trade deficit problem with China; we have a train deficit problem with China.
9
They do have the advantage of being able to confiscate land wherever they need for their rail projects. They also have person telling them to get it done and the rest of the world is paying for it for them.
2
I totally agree that tearing up the TPP was incredibly short sighted by Trump. Trump started disarming before the trade war with China.
With regard to the EU. Friedman writes, "Then Trump should have lined up all the European Union countries, which have the same trade problems with China as we do, on our side."
I don't believe that one. The EU is all about taking advantage of every situation to increase its own trade. During these negotiations the EU is increasing its access to China. They figure the longer it goes on, the more they will gain. If there is a settlement, the EU will demand the same trade gains at no costs to the EU. Just like with NATO, the EU NATO members expect the US to do all the heavy lifting and European countries are able to minimize military spending The EU is the most ruthless trading organization in the world and it sees the US as its chief competitor.
8
The primary reason for Trump tearing up the TPP was because Obama created it - I doubt Trump even knew what it was
Friedman's approach of staying in TPP and aligning EU with the US would have been the correct approach, but it is too late for that now.
Xi will not be able to accept the trade reciprocity Friedman suggests; it would prevent China from achieving the 2025 goals Xi has wed himself to politically.
And Trump will not accept Friedman's reciprocity approach; he believes now that China has more to lose than the US, and wants to see Xi buckle so he can achieve a "great deal" on which to stump in 2020.
The politics of the two leaders have thus doomed the trade negotiation. Trump can only hope that the economic downturn underway in China will lead to political instability there. He no doubt dreams of a sudden dramatic collapse of the PRC similar to the USSR.
I don't believe that collapse will come any time soon, and the world economy will suffer as a result.
2
The instinct to implement protectionist economics policies that nonetheless try to impose what are essentially terms that replicate that of a conqueror country upon the conquered is false pride at best and personal vanity at worst. Perhaps Americans don't remember, but the Chinese, especially those who deal with economic policies, certainly do about US-European invasion of China and the subsequent humiliations. There's no "rightness" about the trade terms or the spirit in which they were offered.
And now, both nations and the world will suffer as collateral damage of an economic and cultural conflict. All the players are in a competition about setting standards for technology and trade but everyone is cheating. Worse still, the conflict and the cheating will only escalate as communication channels fail despite the internet, despite 2-5G, despite education. Nothing would be able to pierce through what is essentially a haze of distrust and suspicion. Thus, instead of civilization moving forward as a whole, we will again sink into a quagmire of hegemonic conflict.
The proper and right instincts (and I daresay, actual thinking) that had made US into a country that aspires to be governed by transparent democratic ideals will become further conflated and obscured with the opaqueness of the worst instincts of men.
4
Your approach for a reciprocal deal does not address the underlying issue of trust. This is, as you write based on the different systems. Therefore this way might superficially heal the current issues but not solve the root cause. Unless China changes their system we need to evaluate our trust level towards them before making strategic decisions e.g. on 5G technology.
3
Mahatma Gandhi spun his own thread as a symbolic resistance to British colonialism. That colonialism was based on sending raw cotton to England and selling finished cloth back to India. Even in the American colonies, Samuel Slater of Pawtucket, R.I. reputedly had to memorize the plans for his textile equipment because it was illegal to remove physical plans from England.
In our era, we send soybeans to China and buy back cell phones. Which country is being colonized?
5
Right on the money.
Furthermore, the U.S. will never be able to poduce anything cheaper than Chinese. And with China‘s high technology capacity, not even their labor cheap neighbors would be able to compete.
So you have it. Once Trump and trumpism is gone, China will never again have to negotiate question of ‘stealing‘ various technologies. For them, the case would be closed.
2
The commercial behaviour of the Chinese might be irritating to the developed economies, it is certainly not unique and most successful economies traveled over the same path. The Americans appropriated textile technologies from the British in the 19th Century, and the British also accused the US of protectionist trade practices. The British themselves monopolised trade with China during the 18th and 19th Century, and after the Opium War, even collected tariffs on all goods that were imported into China. The US, in turn, launched the same accusations at the Japanese during the 1970s and 80s.
All governments put the welfare of their own citizens above all else, or so they should, "America First" notwithstanding. As Trump has shown, countries do what they can get away with, not what is "moral", hence the US has refused to sign international treaties that they deemed detrimental to their own interests. There is nothing noble about free trade, but simply a way to balance the interests of all parties concerned. For a developed economy such as the US, it is not afraid of competition, which in fact makes its own industry more innovative. The US too provides state assistance, such as farm subsidies and the subsidies to the solar panel industry. The reason given is usually non-commercial, such as "national security". Arguably, China has reached a stage that they actually do want to introduce more competition, but on their own terms and not trump's.
1
China is responsible for creating trade and IP theft issues, not the US or Trump. If TPP was so good, why is it that of the ten leading Democratic Presidential candidates, only John Delaney supports joining it? If polite negotiations are the way to deal with China, well that didn't work with Bush, Clinton, or Obama -- the problem only got worse during their administrations. It's easy to blame Trump's rough methods, but nothing else will work with China. China will not give in with just talk.
We have little to lose in this trade war, as we export very little to China. Leaving the tariffs in place for a long time will not hurt US, and supply lines will adjust and go to other countries in a couple of years. Also, not mentioned in this article or most others is that China's unfair trade practices have enabled it to beef up its military and bully neighbors, so there is a real indirect cost to US and its partners like South Korea and Japan as they spend more on defense to combat China. I would much rather see us import from countries that are democratic and US allied, and tariffs will push investments into those countries.
8
If ever, there were two people who had the most power in the world, as China has the most manufacturing output, the largest population, and both have the largest militaries, yet, who are clueless about honesty, decency, and wanting what would be not only good for their people, and the common good of humanity, these two aren't going to lead both countries or the world anywhere but downwards, and towards a possible dangerous situation, because of the fact, that each of them wants to be the top dog of the world, in both technology, and military strength.
1
The US and Europe are not exactly "selling smartphones, artificial intelligence systems, 5G infrastructure, electric cars and robot" as described. The world is changing fast and we all have to keep abreast of the fast-moving technology change before our eyes.
Smartphones- Apple is only the 3rd largest vendor, Huwai and Samsung have 60% of the market share.
AI - US and China are almost equal.
5G - Huwai is 2 years ahead of Ericsson( there is no US vendor) and owns most patents which are why the US is trying to blacklist the company.
Electric cars - both China and US about equal.
Robot - the US only have one major vendor Teradyne, Japan, South Korea, and China made 80% of industrial robots.
4
Americans, again, have to pay the consequences of their reckless gamble on a known con man who knows nothing about the America he has occupied for 70 years, and who, further knows nothing about history. Especially the history involving trade wars. He probably would be very surprised to learn that tariffs either produced and certainly worsened the Great Depression of the 1930s, nor does he know the deadly role that blood and soil nationalism played in the most deadly conflict, WWII, of the 20th century. He, and now we, have another failure on our hands. He will likely stiff us as he has in so many bankruptcies and will go scot free. We will not.
9
I loathe Trump, but when asked at parties if there is absolutely ANYTHING that I find positive in his administration, I reluctantly talk about his willingness to 'take on China'. While he gets lower, than low marks across the board, his steadfast pronouncement of China as an enemy, economic engine is right on the money. Thankfully, it is not longer just about making money, it is about privacy, intellectual property, and basic human rights. Indeed, it seems that so far he has been fighting a losing battle with all of the wrong tactics and weapons, but I for one give him credit for going to war with a subversive foreign power in the first place.
8
Mr. Friedman. You, rightly point out, we are not dealing with a former USSR. China is different. We have underestimated China.
To see where China is today, we allowed that to happen.
China is not a competitor, nor a partner. We just do not know what their motive is.
It may not be too late to revive the TPP. It is not late to involve our traditional allies, in having to deal with China.
To quote your heading here "How Trump and Xi can Make America and China Poor Again". You are saying the trade war is heading in a dangerous direction for the whole world.
On a mere layman's thinking, what happens if the US were to pull out all plants and businesses in China, and stop all exports to China, and imports from China? Could this happen?
3
The US and Chinese economies are interdependent.
1
It seems that everyone has a short memory and have forgotten that the original Congressional legislation that financially subsidized American manufacturing to move offshore to China was Republican legislation designed to help raise the profits of big business.
At the time President Clinton signed off on this corporate giveaway thereby destroying the domestic labor market as he navigated his impeachment saga.
9
""Give them that dignity'" is an odd sentiment to see in reference to anything Trump related.
Plans, sequenced action, reasoned consideration, are not part of Trump's playbook (unless it's regarding marketing himself or his "ideas").
Bullies keep bullying till someone bullies back. Welcome to the real world of real countries and real leaders, Don. It's no longer small contractors who don't have the resources to fight every insult, broken contract, racist treatment, reneging on a deal after services have been delivered, and so on. You probably never really wanted the big leagues, Don (hence the 10 hours of stone faced silence when you realized you'd actually won the presidency). But that's where you are big guy. Brushback pitches. Deliberate intimidation, responding to threats with hard hitting action, are all treats to look forward to. China's been around a while. Good game player!
5
“We should say to the Chinese: ‘You now are our economic equal.’ Give them that dignity.
McGregor has really nailed it.
The Chinese people don't like to lose face or be insulted. How do you expect to negotiate while insulting the other country.
Besides, the Chinese hold 1.1 trillion of the US debt.
The Chinese are on their way to becoming the number one economy in the world.
While the Chinese parents are sending their kids to MIT, Caltech and Ivy league schools, the Americans are mired in a dysfunctional government, out of control mass shootings, opioid addiction and an aging population. If Donald Trump wants to make America great again, he needs to address many of his domestic problems first, but Trump needs to throw meat to his base so that he can be reelected. That's why w have this crazy trade war that does nobody any good.
9
@LaoTse Some how Chinese come up with moral superiority. They threaten with holding American debt, think their kids are smarter and we are dysfunctional.
They hold the debt because they themselves don’t believe in their currency. If they want to unload it some one else will buy it. Number of educated people in China is puny compared to the total population. In the mean time they steal from other countries, bully industries to part with their patents and terrorize neighbors.
They have to come to the ground level if they want to succeed in this multilateral complex world.
2
"How Trump and Xi Can Make America and China Poor Again" If it makes trump richer, what does he care?
Wasn't the whole point of increased trade between countries meant to make it impossible to go to war because the economic costs would be so great? Now we have two macho men pounding their chests claiming to be more macho than the other both willing to destroy the world to get their way. What would their mother's say?! This won't remain an economic or a digital fight for long. These two characters have shown a violent side when they insist, ... demand to get their way.
America's corporate titans and geniuses thought it was a good idea to get rich off throwing millions of Americans out of work and hire cheap Chinese labor instead. Think of all the income taxes those unemployed American workers would no longer have to pay! While the wealthy capitalists sold us out, taught the Chinese how to fish and giving them our fishing rods too. Now we can't even feed ourselves. But the rich are even richer as a result.
America's corporate geniuses aren't investing in R&D as much as they are interested in wasteful Mergers & Acquisitions that only enrich the people at the top while throwing hard working tax payers out on the street without healthcare or a means of survival. Indeed, these capitalist geniuses hate competition. That's why they buy out or kill small upstarts - hence the M&A and noncompetitive practices and lobbying - and now fear the Chinese they sold out to many years ago.
8
Gee, if only Trump would read Friedman!
What probably irks Trump even more than Thomas Friedman being right is that Obama was right - we needed TPP!
We needed leverage!
What a deal.
4
I'll leave dumping on Trump to mass of commenters, because that is what they do best. He spotted the main foreign policy issue of our time, which sure isn't Putin's Russia or Brexit. And surprise, surprise, he hasn't got a clue how to get the Chinese to change their ways. Do the Democrats? I doubt it--not one of their debaters said anything cogent about world affairs, it's just not on their current agenda.
Friedman says the US should have entered into free trade agreements with Europe and Asia (ex China). I agree. But is this on offer with the Democrats? Hardly.
So perhaps we are are headed for a two internet, two tech world. If we are, I'd bet the Europeans and many Asian nations opt for the American system, because they know that the US is an open, democratic society, however poorly it is being served by its politicians at the moment. And here's where I part ways with Friedman. For him, any slowdown in innovation is bad, because technological advancement is the fount of all good. In my book, a slowdown in technology may provide humanity with an unexpected reprieve from driving with the accelerator stuck to the floor and the brakes out of commission.
4
Yes, Trump took on China and did it badly. But was it his idea? I doubt it. The man can’t think that deeply. He was told what to do and convinced that it was good for the Republican Party, would get him donors, etc.
Trump gets programmed and reprogrammed again and again by those around him. Who fed Trump the idea of a trade war? Who in the White House is supporting this? That’s what I want to know. Trump is just a wind-up toy in this matter.
3
@DG
The answer to your query is Peter Navarro (Trump’s so-called economic advisor on trade). He also authored an alarmist screed/book titled Death by China.
2
Both of these men are clearly not ready for prime time and have shown themselves to be lightweights in the political arena.
2
This is not a "trade dispute" that needs to be "defused." That is a smoke screen for what is really happening.
There are many in the US government, Bolton prominent among them, who seek to "decouple" the US and Chinese economies. Their *goal* is to fracture the globalization linking us.
Why? Because we can't have a new cold war, much less any serious hot flashes, if we are so tightly linked economically.
China makes key parts of our precision guided weapons. China makes key parts of our aircraft. That is just a sample of how utterly impossible it is to fight with China and at the same time be linked economically as we have come to be.
The point of the American moves is not to make a trade deal. It is to end much of the trade. It is to have instead near war, with occasional open war.
Our leadership would say we must do this, because China is salami slicing our position.
Of course China looks out and sees the US Navy cruising its shoreline, and aircraft overflying its coastal shipping, and feels insecure. It is insecure, and the US leaders mean to keep it that way.
The globalization of the last 70 years found its brick wall. It cannot go on, unless this wall is taken down. It isn't a wall of trade terms. It is a wall of military confrontation.
5
@Mark Thomason
It worries me to see Bolton and other national security staff at the table at these trade negotiations. They really shouldn’t be there. What would we think if China sent a general to negotiate the trade deal? It certainly lends credence to your idea that our government is trying to start a war, not get a better trade deal. And it probably explains why we don’t have a deal yet. If it was just about fair trade, there should have been plenty of room for a win-win deal where China opens up more to foreign investment and tightens its IP protections (which would benefit China, and which China is already doing) in exchange for us dropping tariffs and investment restrictions on Chinese companies. The lack of deal is likely due to the fact that military rather than commercial interests are driving the agenda in our government.
2
I don't think there will be any significant resolution of the trade issues until after the 2020 election. China is hoping that their stoppage of U.S. farm imports will result in Midwesterners/farmers voting out Trump. If the current market turmoil continues, it won't just be the farmers voting him out. In the meantime, we all suffer, including retirees, pension funds. And if the financial and technological decoupling continues, consciously or unconsciously, the world will be cleaved in two, and we'll be living out an economic version of the cold war. And in this new world, Thomas Friedman is prescient in that we will all be much poorer. Some analysts are saying we should consider moving from bonds to stocks, as stocks have a higher dividend yield now and more so after the anticipated rate lowering again in September. Scary and strange days we are living in.
5
There will be no "settlement" unless it can be couched in terms such that Individual-1 feels that he "wins" and that Xi "loses". Any thing else will not not go forward.
1
To make matters even worse, we have a President who thinks he has a monopoly on all the best ideas and surrounds himself with people more than happy to tell him he does!
7
An absolutely first rate analysis. The most lucid explanation that I have seen.
But when it comes to the solution, it falters big time. I like McGregor's idea. It is the proper framework for an ultimate solution. But if Trump backs off now, China will interpret it as a failure of nerve, and McGregor's proposal will never get a fighting chance.
You ask why China precipitated the current crisis in May by pulling all of its concessions off the table. Well, one reason was that commentators like Paul Krugman were saying that Trump was a softie and pushover and would cave in to China in return for an empty deal that he could trumpet to the world as a victory.
Things may get worse -- much worse -- before they get better. Like in any war, in a trade war there are casualties on both sides. But that is no excuse for weak knees and a weak stomach. For China's sake, as well as the world's, this is no time for appeasement. The issue is can a democracy negotiate on equal terms with an authoritarian state?
4
Oh please..we’ve done plenty of deals and business with authoritarian governments all the around. This has nothing to do with political status but race/cultural root.
2
Clinton was also against the Trans-Pacific Partnership, though that kind of opposition is more typical of Democrats. It would have been interesting to see if she shifted on that as a way to apply much more leverage to China, focused on cleaning up their business practice of "give us your secrets".
But she's not in, so maybe the incumbent (or the replacement) will present your idea. I can absolutely see Trump telling Xi "all of your companies that want to sell in the US must have a US partner and share your processes and patents with them".
I'd prefer seeing someone who might approach the negotiation with a large array of other international players on our side. Hoping we can re-establish trust with our allies after the election.
1
"... sell to the world the same high-tech tools that America and Europe sell...". Nice one to tag along Europe, which is inferior to China when it comes to modern technology.
These two sad sacks are made for each other — if they both lived in the 1900's. I'm shocked we're not back on the gold standard yet.
2
We should have never left the gold standard.
With equal access, equal trade, i.e. an overall trade balance that stays within 10% year in and year out. Long overdue, and both countries would still prosper. What is not mentioned here: China supports the Nukes in N. Korea. We should not be paying for this or giving them a free pass to continue their support.
2
Trade is a bit more complicated than that. Take an iPhone made in China. How much does it contribute to a trade deficit?
Yet much of the expensive bits of the phone are made by Japanese and Korean companies. The Chinese run a deficit with these high technology nations to be able to assemble a phone with low paid labour and low priced generic parts. That is what being an assembly economy means, importing the components, gaining very little benefit, and taking the heat for a deficit caused by imported parts.
Calculating trade deficits is not easy. It has to take both the supply chain and services into consideration.
5
@herne How much of the trade deficit can be attributed to assembling parts from outside China? An estimate, then subtract that from the overall deficit, and what is the trade deficit you have left? How much of that would disappear if China did not restrict the importing of American products or allow free flow of funds by Chinese citizens to the U.S.?
Russia 2020: Go Trump. China 2020: Anyone but Trump?
Fascinating that as we go Into 2020, we have been talking about only Russia interfering in our elections - and presumably helping Trump win another four years.
Maybe we need to start talking about what appears to be China’s strategy - anyone but Trump! By waiting out the election, targeting the pocketbooks of his Midwest supporters in the farming communities, they have nothing to lose and potentially everything to gain with a Democratic president who will be more flexible.
Wonder how Iran, North Korea and everyone else will line up? Yes, Mr. Friedman, it is now China who aspires to the Lexus, while the “Trump” party tries to cling to its olive tree.
2
Both countries will suffer, but only one has a national election in 2020.
China has every motivation to undermine Trump and historically has the patience to play the long game. The Chinese government allowing its people to suffer is standard operating procedure. Americans won't stand for it.
11
If the objectives of the current US trade policy are unlikely to be achieved, there should be an increased effort to improve the WTO, before the Appellate Body no longer has a quorum, so that international trade disputes can be resolved in the most practical way.
2
Thanks for the perspective provided by this op-ed. This reader has the feeling that in this tariff war there will be only losers, unfortunately, regardless of what Trump said about such wars being easy to win.
7
Two problems. First, when Nixon opened relations with China, other than a hedge against the USSR, he and successors had no vision or strategy of what that would mean, both to the US as well as the rest of the world, i.e. taking the easy way out. Second, instead of a strategic approach to China, which would require deft moves as well as goals, expectations and desirable outcomes for the US, trump gets into a playground dust kicking contest, again taking the easy way out by doing cartoonish stunts for his base.
And furthermore, Friedman hasn’t made a correct call in memory, so I wouldn’t bother taking him seriously. MBS, anyone?
3
The 'artist of the Deal' seems not to have learned the very first lesson of deal-making: never humiliate those with whom you're negotiating. Some things in life are more important than money - not that the Grasper-in-Chief understands that - like one's dignity and self-respect. Not everyone will make a deal with someone who makes them grovel, regardless of the financial benefit. Trump has a lot to learn - yet he is unwilling and incapable - yet sadly, it is the world that is being forced to learn this bitter lesson.
9
Trump is a fascist who wants to run America like Putin does Russia. He tore up TPP, broke with our allies and tried to blow up NATO for this very reason. He also withdrew all national security funds that would allow the FBI to follow through with domestic terrorist threats. The Trump campaign just took out 2000 Facebook ads spouting racist hate on the internet!
He does not have the intelligence, skill or desire to pull off anything that you have suggested he do; and neither does Mnuchin and the rest of his corrupt cadres.
I have the utmost respect for you, but this article has been written in some LaLa Land Princetonian bubble. We have to fight to get McConnell and Trump out, period.
Reason left our leaders long ago and utter greed and hate has taken root. China has read Trump for what he is. WE are the ones who are “the blind leading the blind.”
11
Trump has not set out a rationale for what he’s doing or laid out his end game. It is not bringing jobs back to the US because that is not going to happen.
2
This is an excellent summary of many aspects of what has brought "China" and "the U.S." to blows. And, despite the fact that I'm represented by an incompetent, reckless, and unethical fool, I should be taking the side of "the U.S.," shouldn't I?
Well, maybe....but those quotes reflect my sinking feeling that this whole rhubarb is a new kind of martial art being practised NOT in the old "sovereign state" fashion, but between Capitalists. These Capitalists are multinational, and harbor state loyalties only to the extent that a nation's strategic plans and tactical moves coincide with their own. And in the murky regions of global finance and trade, there is no full disclosure, no FOIA process, and precious little to reveal whose strategy, and whose tactics, are brought into play, for what reason.
Yes, China may for the moment be a bit more "unified" and agile with respect to its ability to assess and quickly implement plans--and the "U.S." does have the remarkable handicap of a loon at the helm, ready-fire-aiming his way through each day in the office. But Big Money has already infiltrated the American political system so thoroughly that it cannot be long before its own flexibility is fully asserted.
We may dust off our Thucydides and do a small bit of search-and-replace editing--such that the prophesy will, yes, be, for inevitable violent conflict between two driven parties. But are these now corporate entities, not sovereign states in the old Westphalian mode?
1
Destroy the world? I never expected any less from Trump.
7
Friedman is proposing an approach that would require multiple intelligences, emotional maturity, core honesty, ability to listen to advice and acknowledge mistakes, self-reflection, not to mention historical and economical knowledge.
Trump was elected specifically for his lack of brains by people who are threatened by people with brains. He can no more grow a brain than you or I could grow antlers. Homo, yes. Sapiens, definitely not.
20
Why is anyone paying any heed to Friedman.
Despite his many awards for what must now be considered simply creative writing, someone name me one idea he has offered that has been accepted by any party, person or government as a solution to any issue or problem.
Wait! Wait! He was an early free trade globalist! Well, that doctrine has led us to the resurgence of a viral populism that has brought us Trump.
Thank you Mr. Friedman.
5
Who is guiding Trump through this process? If it is Wilbur Ross, a man who supposedly Trump no longer has faith in, then this tit-for-tat is bound to fail. Trump will assume that, as an extremely stable genius, he knows better than anyone else and his method of negotiating is basically "I win, you lose," then everyone is going to lose.
Soybean farmers should plan for a different crop next year.
1
Guiding? This is nothing but impulsive.
The simple fact is that China has a more effective government and a more cohesive society than we do. If we must suddenly compete with China, not on a military but on a trade and economic playing field, we are seriously outclassed. The Republicans have hollowed out our infrastructure and manufacturing and lowered our educational standards. Our capitalist system is incapable of investing inside America if there are other countries where they can make a bigger profit. One of those countries will be China. If our own capitalist system turns on us in a geopolitical way by chasing foreign profits over national security there is nothing that our government or our working class can do about it. And once the economic balance shifts towards China so will the military since any type of non nuclear war depends foremost on the health and stability of a society.
China does not yet realize that we are a paper tiger and is not yet planning what to do with its new hegemony. But Trump has set in motion a disaster that will soon be visible to China and the rest of the world. Just as the Soviet Union fell so will the post war American Empire fall and we will need all the friends we can get. But until the Trump family is out of politics we will never again have friends in this world. So this is more than an economic question, the task is rebuilding the American dream in a time of diminished expectations. Billionaires, can you spare a dime?
11
The threat of China, including its cheating on WTO rules and taking advantage of its status as a “developing nation” under these rules, is perhaps the only thing on which I agree with Trump. But he applies the same negotiating style that led him to failed businesses, bankruptcies and thousands of lawsuits as a businessman. He is a one-trick pony, who negotiates political disputes the same way he negotiated his way out of a failed real estate project or a bankrupt casino deal.
Unfortunately, his daddy Fred, the U.S. bankruptcy system and the American taxpayer can’t bail him out of a mistake here like they did with some of his business deals. While Xi’s intransigence and thirst for power plays a big part in this crisis, hundreds of millions of Americans and billions of Chinese and others around the world are already paying dearly for the arrogance, political naïveté and tactical mistakes of Trump.
4
You may not that in the WTO, there has been way more litigations against the US than those that are against China.
1
Mr Friedman is apparently a comedian, talking about what policies Trump and Xi should follow, as if Trump didn't have the knowledge, patience and wisdom of a kindergartener on a blend of sugar and speed, with a small dose of LSD mixed in.
Trump is picking a fight because he thinks it makes him look tough. There's no strategy, no understanding of the importance of economic links with China, Europe or anyone else, no understanding of the results of his policies, and no understanding of what responses he might expect from his new enemies. A Ouijji board would make more coherent decisions.
8
What do they care? They'll still be rich no matter what happens to the rest of us.
3
The concept of two equal powers is a little strange when you consider that China owns more than 4.5% of our growing national debt. I know the theory is that they would lose significantly if they called in that loan, but so would everyone that owns US debt, including Americans. Got to think this is what they call leverage; we have picked a fight from a position of weakness. Perhaps we seek to use our opponents strength against him, or perhaps we are just foolish?
2
Those of us on wall street knew 25 years ago that Trump was a snake oil salesman with the heads I win tails you lose mentality. Unfortunately, this doesn't work as well when it is the US citizens that are on the hook.
8
We had a chance to deal with China when the fateful decision to admit it to the World Trade Organization was made. We took a pass. We need as some have said fair trade, but not free trade. Neither China not the U.S. has yet to adhere to that simple principle. As much as China's trade policy is controlled by and for its state own companies, U.S. trade have made by ad for corporations. There has been n consideration of workers or the environment. Sadly, Donald Trump only knows how to bully as the proverbial "bull in the China shop," and not how to lead. He is not a "deep" thinker who realizes "America First" is a losing hand that cannot work in today's global economy. He needed to rally the European Union as a partner in advocating a fair trade policy to pressure China. Instead, he supports Brexit and has attacked the E.U. with tariffs. We have major economic trade war underway that seems to portend severe damage to both China's economy and ours.
1
I'm still waiting for an explanation of the emergency under which the so-called president has the authority to unilaterally impose tariffs.
5
Thanks for pointing out that Xi is also the problem. It's frustrating to see Trump getting support for taking on the Chinese. If a Democratic president tried to, the screaming from just the farm interests would cause him or her to back right off. Yet, here we are.
I don't like trade war tactics but I don't think TPP would have been a panacea, either. As you point out, look at China's aggressive military moves in the South China Sea. If anything, using TPP as a framework for pressuring China might have made the world a much more dangerous place.
Trump is not just taking on China but globalization. He wants US to get off the globalization train quickly as it can
1
"I welcome China as a competitor in these areas. It will speed up innovation and drive down prices."
Speed up innovation? Only if China can learn to innovate rather than steal all of their IP, and I'm not optimistic. It's not about the good people of China, it's Chinese culture and all the damage done by Marxism and brutal dictatorship.
5
The current crisis between United States and China is very dangerous and it can be the start of a military war.
2
Wonderful photo— Trump obviously befuddled over trying to button his jacket while Xi smiles at the world bemusedly. Perfect for the history books to be written.
6
We got here because America is a country in deep decline and China is rising to fill the void.
5
Sorry Thomas 45 is arrogant and arrogance often breeds stupidity and stupidity is where we are now
Hard to extricate our country from dumb . Only if we vote him out
5
Your analysis is too simplistic. The real culprit is globalization; with open borders for people just a subset of that agenda. After NAFTA, and particularly once China became part of the WTO, there was a global surplus of labor. This resulted in lower wages for American workers, particularly the unskilled and semi-skilled, and much higher returns for capital. If the country was willing to pay the price (higher prices for imports and the loss of some export markets), we could turn back the clock by imposing high tariffs on goods manufactured in countries that don't have adequate protections for workers and the environment. Unfortunately, the rentier class has captured both major political parties. Capitalists love the status quo since they have reaped the lion's share of the gains from globalization, so you can expect them to skewer any candidate (Republican or Democrat) who strays from the religion of free trade.
4
Capitalism has been the word bantered about China’s economy – their all Capitalist now – completely missing the content of Socialist Market Economy with Chinese characteristics.
From 2001 and entry into the W.T.O. that was structured by primarily American input China has of necessity been in violation of WTO rules.
Enterprises are beholden to state owned banks ad decisions of output and price are state (CCP) made, private firms also under state bank assistance with Party Secretaries on their board of directors.
Trump’s trade policy recommendations are an ideological attack and have no chance of resolution. It’s that tried old Cold War again, get used to it.
China has been taking advantage of the free world by means of cheap labor, no environmental regulation, stolen technology and restricted markets. Trump is a novice statesman. Our state governors need to step up negotiations with our allies and reunite to a stronger negotiating position with China.
The Chinese are with us to oust Trump. We need to somehow take advantage of that. Come on Democrat's think out of the box and get it together with our allies, Mexico and Canada and move us forward. Pelosi, Omar are you listening???
China has been taking advantage of the free world by means of cheap labor, no environmental regulation, stolen technology and restricted markets. Trump is a novice statesman. Our state governors need to step up negotiations with our allies and reunite to a stronger negotiating position with China.
The Chinese are with us to oust Trump. We need to somehow take advantage of that. Come on Democrat's think out of the box and get it together with our allies, Mexico and Canada and move us forward. Pelosi, Omar are you listening???
@Kristen
Sorry, as a Democrat I am 100% against colluding with foreign governments to meddle in US elections. That is the Republican's vile game.
5
America should have created a freedom tax and levy it on the imports from countries based on the level of freedom they grant to their people. China enjoy certain degree of advantage because they do not have to worry about human right. Quest for freedom is universal and global trade should reflect our desire to help our fellow humans to gain the freedom they are deprived of.
Freedom tax applicable universally will level the playing field.
2
Donald Trump is incapable, not unwilling, but incapable of working with anyone. He mistreats, demeans and cheats those who try. He will not work successfully, as adults consider success, with any world leader. He will "win" with the exceptional one who cowardly gives in to him. Working with others is an ability children learn usually by age 5 or 6. He never learned or is biologically incapable of doing so. His deficit is so inconceivable, given his wealth and his constant boasting that the existence of that deficit is not taken into account. It's there. He's always had it. That bodes poorly for accomplishments for America with other nations. Xi is no angel. He also won't be bested by Trump. A truce, maybe, if we're lucky enough to avoid more spiral downward. But to "win," Trump must be on top and Xi, humiliated. It's the only winning he knows. And, that's not going to happen.
989
@blgreenie:
Agreed but, who says Trump has wealth? He inherited ~ $400,000,000 and managed six bankruptcies; he's on track to be responsible for hundreds-of-thousands more re the households he supposedly represents, not to mention the degradation of the US economy in general.
We shouldn't be speaking/writing of "us vs. them" policy, as Trump promotes. International trade is complex, has been developed over time, and was relatively balanced prior to Trump throwing a wrench into the cogs.
Let's see those tax returns.
99
@blgreenie the argument here is also for removing Trump from office--long overdue.
48
@JC Bet Trump caves to China. This is all too late. China is too strong and we are too dependent to have great leverage. And most importantly China will not stop stealing our intellectual property.
10
It all started with the nonsense that 'trade wars are easy to win.'
If they are easy to win for one side, they must be just as easy to win for the other side to win.
The biggest problem for us is that our 'master negotiator' threw away every advantage we had when he tried to go it alone. The stupidity of that cannot be overstated. Stupidity, that is, if you assume (against the evidence) that his goal was to advance US interests rather than his own.
As anyone who's ever done a deal understands, deals are made when both parties (or all parties) benefit. Everyone must be better off with the deal than without it. Because Trump has painted himself into a corner where he cannot compromise, he will never make a deal with China.
515
@Justin
The problem with China is that they were given the best possible deal early on where they could steal foreign technology, limit foreign access to their market but still have access to international markets. No matter who negotiates with Xi, they will be looking to take something away from him. The TPP would have been helpful but it's existence would not have changed the eventual showdown between the US and China. The naive view that the EU would back us up under a Democrat is also wishful thinking. The EU are masters at letting the US do the fighting and following up to secure the same prize.
10
@Pat,
Please reread the section about information transfer. American companies entered into contracts they marginally did not like because they could make big profits operating in and selling to China. They made each decision freely; neither this nation nor China forced anyone to sign those contracts. It is not stealing when the parties agree. In this case, the parties were willing to give up technology in exchange for profits. That does not make China the bad actor; it makes US company executives greedy.
16
@Justin
Good analysis.
The bigger picture is that the Republican Party has spent a century demanding OPEN BORDERS for the RICH, their money, their machinery, their factories, their patents, and our military, so they can get richer.
Meanwhile human freedom is strictly regulated behind borders. That is a gigantic favor to the owners of capital by government. That system gives the owners of capital a huge advantage against those they employ in every negotiation.
That is what the Right demands. But Trump blames Democrats because the Right takes no responsibility for any of their failures. Bush who?
Most of it is NOT really "theirs". The wealth is built by those that do the work: We the People. The jobs are created by the consumers: We the People.
"They didn't build that." We the People built that, and they have shipped it to low wage countries.
Financiers happen to work where money changes hands, so they spend their time trying to get more and more of the money, each time it goes by. (I don't blame them. I would want some of the money as it goes by too, and I don't know how far temptation would take me.)
However, what do the rest of us do, when the financiers now take a piece of us fifty times a day?
Why did We let let a tiny fraction of us EXPORT the productive capital and the patents that We built with hard work?
Did We the People vote to let the already rich manipulate our markets and our governments, for their gain? Oh yeah, Trump!
YOU CANT WIN A RACE TO THE BOTTOM
8
Yeah, but it will get Trump re-elected again.
What else matters in this country today?
Republicans are united in everything Trump represents and does; they have found their messiah.
Democrats are powerless, talking dangerous nonsense about free-everything, open borders, and free college and healthcare on arrival for everyone illegally crossing the border.
Being tough on China (such as what Trump can claim) - makes him about as popular among Republicans as do his calls for for shooting Hispanics, and repatriating all non-whites from whence we came.
Wry commentary is fine, but we do deserve the government we have now got, and we democrats definitely deserve Trump. I hope this is a lesson for us. Maybe we have learned (something I doubt very much), that not coming out to vote for Hillary, or voting for a third party candidate over some ridiculous tantrum we collectively threw - has dear consequences.
If this brings about civic engagement in the center and left, in the same way Trump has engaged Fox, religious right, lunatic fringe on the right - then it might be worth it. It will take time, but with a sufficient backlash, we could reverse everything Trump is doing.
2
Very good article but the writer forgot to mention that China has not dumped just T - shirts and toys but all sorts of goods in America left, right and centre, of course purchased by the importers at ridiculous cheaper rates. As such all of the stuff is available to the middle class within their reach.
Trump has taken it a bit easy and perhaps he might have thought that Chinese President is an easy meat but he has proved to be a tough nut to crack. Ultimately American consumer is suffering since there is no other alternative.
I don’t think the trade war is affecting China badly, instead America needs to sort out its issues in a better way.
1
I've been dreading a deep, worldwide slump-depression ever since Trump took office. He's a high roller, a gambler at heart because he always finds a way to stick the tab to his creditors, customers, and now the American people.
He's surrounded himself with yes men or totally unaware men like Larry Kudlow who claims China is as healthy as a horse. He tells his base he's the world's best negotiator--when he's one of the worst.
And unlike the Chinese, he lets emotion and impulsivity rule him. Thus, his abandonment of TPP was stupid as Friedman says, because it destroyed whatever leverage he once had.
It would be nice if the president had the wisdom to follow Tom Friedman's advice, but I'm pessimistic.
Because when has Trump ever showed wisdom? I know people can change, but without any evidence to date, I have to go with my gut and say he won't.
6
If somebody is not paying attention it's Tom F.
All his hypotheticals about relationship with China will surely fail, because the only thing China does is- cheat, cheat, cheat - to achieve advantage. They are not kind of people with whom any agreement will hold.
And all Tom's hope that TPP countries and Europeans will be on our side are foolish as well- China will buy them out one by one, because their businessmen are unprincipled opportunists and share no values with us.
Yes, Trump China policy looks ugly- but that's because this is the only way how anyone can deal with them.
Another way, it's like Obama- doing nothing, just sitting out his/hers term quietly. Hillary will be much the same, therefor she lost to Trump, despite all his coarseness and ugliness.
Where Tom is right, is that we will see large scale ugly developments: like two internets, two world-wide trade systems, iron curtain between them, etc.
But there is no other way, unfortunately.
3
I agree it’s time to find a more constructive approach with China on trade. In particular by working with like minded partners in Asia and Europe. China is too big for the US to deal alone. But how would the solution of “You-give-me-that-I-give-you-that” work with WTO and the most-favoured-nation clause? Maybe the West should start creating its new trading system and keep China out.
1
I suppose the President now will count it as a win if he is able to hold China back more than China is able to hold the U.S. back. And if that is not possible, he can claim it as a win if he holds them back at all, no matter what the price.
Yeah, let's hope Nick Mulvaney chief of staff reads you.
He sounds to me as smart & practical a la the Sunday seminars on commercial television.
I listen to the political shows via cspan, even when walking
Wheaton Terrier, but when he sees a cat or squirrel, I have to hold and
concentration diminishes much.
We are already misusing millions or is it billions of dollars, paying farmers not to complain because, thanks to Trump, the Chinese are no longer buying agricultural products from us. What is coming next? Who else will we have to pay not to complain? Trump will bankrupt us, just like he bankrupted those casinos!
9
“On some great and glorious day the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron.”
— H. L. Mencken
Low soybean prices and now China has cut off purchases indefinitely. Roger Johnson, president of the National Farmers Union, the nation's second-largest general farm group, said Trump's "strategy of constant escalation and antagonism" has "just made things worse." America's family farmers and ranchers "can't withstand this kind of pressure much longer." So Trump promises to shovel billions of taxpayer dollars to prop up farmers....because they’re his political base. Everything Trump does is a power/financial gain calculation....period.
"...People are dispensable and disposable in Trump’s world.” If Trump is elected President, he warned, “the millions of people who voted for him and believe that he represents their interests will learn what anyone who deals closely with him already knows...that he couldn’t care less about them.”
— Tony Schwartz, who penned "The Art of the Deal" for Trump
11
Putin, Trumps patron ( and puppeteer ?) , is grinning. Or, Donnie, release your tax returns and prove you're not totally bought by the Russians.
2
Mr. Market has finally spoken:
A person who has put multiple companies into bankruptcy, increased our national debt at a higher rate than any other President, doesn’t understand what is own cabinet can and cannot do, works from instinct rather than data / facts, dictates domestic and foreign policy via twitter, and hasn’t the first understanding of the economy and global trade, is, with metaphysical certainty, an imbecile
6
Trump knows bleep about anything rational, sensible, thoughtful, and you know what? even so, he may very well get enough votes to serve for three more years...
Unless you speak up, America.
Are you going to sit on your thumbs again and let an egomaniac become our President again?
Do your job, America. Study the history of this man. Is he the guy you'd want "teaching your children well? Dating your daughter?, telling you how best to manage your family so that you would be proud of them?
Or is it something else that's important to you...like being able to slaughter a few dozen birds rather than spend time with your daughters? Your wife? Your aging mother? your dying best friend? or teaching your son what it means to be honest, hard working, so that years later he will find himself telling his own grandchildren how wonderful you were as a dad, and how he taught you what honesty truly was, memories which will bring him tears as he realizes how much he misses you.
Spend time with those who love you and admire you, give them reason to remember you five, ten, say, 15, even 50 years from now as a good dad who demanded excellence from everyone, even the President of These once United States, and most of all of you...
1
I have heard several people who once only voted Democratic statethat “ Trump has been good for my stock portfolio.”
I cringe at the nativity that doesn’t recognize the long term danger of his trade wars, and his failure to address healthcare and social security costs, infrastructure costs we will eventually not be able to ignore, etc.
4
These portfolio voters are in for a rude awakening
By the time they figure it out they’ll be a lot poorer A whole LOT
Serves them right
3
@Jean
I would tell these people to check their portfolios. Trump had a good first year for stocks, and that created this media narrative that Trump has been good for stocks, but his record since the trade stuff started in 2018 has not been good. Overall, S&P 500 is only up about 30% since Trump’s election, and almost all that gain occurred in 2017, compared to an almost 50% gain during the same time period of Obama’s second term.
1
"I welcome China as a competitor in these areas. (technology) " Do you? Why? How can that possibly be good for USA ? Especially since a lot of that astonishing improvement in China came from the USA, and not legally, which probably even on the China-loving pages of NYT is not disputed.
This does not have to be a trade war. We merely seek to rearrange our trade with China. Why would that be a trade-war, as if our trade with China can only be what it is now, them earning hundreds of billions of $ from us?
And what exactly could a US president do to change this trade issue? Engage in a "constructive discussion" with Chinese counterparts who can't care less for such things? How can an adult believe that talking only, without some sort of a more serious clash, will fix this matter? Tariffs are a completely normal choice to stop being milked by China. Painful for both sides though, but far more for them. Not that you ever hear of any pain in China ... no freedom there if you recall ...
2
Please ... understand pain in one culture is not pain in another
Keep thinking only America matters and your children and grandchildren will be struggling to rent a double wide sooner than you think
1
The Chinese will wait for the circus in the US to pack up and leave. The next election is not that far off and if the Chinese wanted to, they could ratchet up the rhetoric much along the lines of Russians meddling with 2016 elections and help someone better suited to their needs. Trump is a bully and I'm sure the Chinese know how to deal with his likes better than most. Perhaps they dangle a Trump Tower deal in China? Or maybe they offer to promote Ivanka's clothing line to their public?
Given the situation nothing would surprise me at this point.
4
Trump is a liar and not to be trusted. So the Chinese know that too. Then he demeans his adversaries so that they cannot do a deal because they need their citizen support. Historians go on and on about ‘face’ in Chinese and Asian negotiations and Trump stomps that into the ground right away because he is weak and does not know any other way to do a deal. To date he has built zero and spreads chaos everywhere he turns his attention.
5
The photo says it all. Our president was thinking about when his next cheeseburger was coming. He’s never looked more out of place on the world stage.
4
The only thing that matters to Trump is how any issue affects how he looks to his base which is a problem as his base wants to see him as the huge bully of the world crushing non whites so they feel better about being underemployed and uneducated.
4
And for what?
This whole relationship with China thing is coming uncomfortably close to showing that intelligent authoritarianism beats free market greed. Who knew? All those companies slobbering over getting access to China? No problem until it's a problem. Huawei might well be a large and real threat to this country, but how many US businesses are begging to be allowed to do business with it? Lots.
7
@chairmanj
Of course intelligent authoritarianism beats free market greed.
Any political system that make long term goals and plans and brings them to fruition will do much better than one that's based on looking good for the next election.
The same holds true for capitalist companies, their desire for short term gain versus long term viability results in decisions that serve the shareholders on a short term basis.
Against TPP, China tried to assemble its own trading group. If the US maintained TPP, it would be almost impossible to tackle Chinese unique problems directly. Negotiation among multiple parties becomes exponentially difficult as number of parties grows as you might guess why.
Making China deal as a one-one-on negotiation is actually a brilliant tactic.
3
Your bona fides in trade are?
1
I believe it was Lenin that stated "The Capitalists will provide us with the rope with which we will hang them".
It seems to me that this is exactly the strategy that the CCP have laid out for U.S. - China relations.
The U.S. balance of trade deficit with China has been used by China to become a major military power which aims to bully its neighbors and control/own the South China Sea and Airspace as well as attain dominance in the Pacific including threatening U.S. allies such as Australia.
The price of entry to the China market for foreign owned companies is to cede IP rights and trade secrets. And, unfortunately, the greed and short term thinking by the managements of these companies have only assisted China in executing their strategy.
China, much like Israel, feels a divine right to justify its territorial conquests.
Quite frankly, I believe that it would be in the best interests of free democratic nations around the world if the Western Democracies would cease trade with China and, instead, rebalance this trade with Vietnam, Korea, India, and nations of Central and South America.
There may be some short term pain to pay for the long term gain, but that would be a price that must be paid.
1
@LaVelle Messiah
Dear ``Messiah'' in Santa Barbara,
Your ipost above reminds me a bit of the scene in ``The Third Man'' in which the drunken hero/dolt began mouthing off against a British officer and the officer's Sergeant stated matter of factly: ``sounds anti-British sir!'' In your case, syour post sounds anti-Chinese, and, as a bonus, anti-Israel as well! Well done!
You seem alarmed by the ``rise'' of China's military. May I remind you that the annual US defense budget is three times that of China. Also, US naval and aerial patrols regularly approach within a hundred miles of the Chinese coast; I don't know about Santa Barbara, but here in LA I've not seen or heard of any Chinese patrols.
Certainly the Chinese claims in the South China Sea is troubling, but that is a rather thorny issue as almost all countries (including Taiwan) bordering that region claim all or parts of it. But I think it's really a bit alarmist to say China is threatening Australia when US and allies regularly conduct FON cruises through the South China Sea and the Taiwan Strait.
Your call to isolate China is interesting considering it was the various Western powers in the 19th century that militarily forced China to submit to ``free-trade'' (not to mention stealing trade secrets to enable the creation of new Western industries, e.g. Tea production.)
Finally, your use of the ``CCP'' as a bogeyman seems strained since you seem quite content to trade with the Vietnamese CP.
2
Interesting 'horsetrading' (give and take) by attacking each other...instead of trying to sit at the table of negotiations, and come up with mutually satisfying solutions. The U.S. needs China as it's partner (just ask farmers here), and viceversa. Trump seems too obtuse, if not arrogant, to allow reason to triumph. This, to everybody's loss.
2
As the Chinese currency devalues, Chinese investors will look for safer investments to place their money..... Stocks? Too volatile. Hmmmmm...how about real estate? That doesn't help my portfolio. Know anybody it does help?
1
Trump is not smart enough to realize that Xi doesn't need to worry about running for re-election. Trump is already skating on thin ice and an economic slowdown, or full-blown recession, would kill his reelection. This doesn't give him any leverage in trade negotiations since Xi can (and likely will) just wait until a new president is elected...
1
I am afraid once more Mr. Friedman is mixing up his own perceptions with reality. The reality is Mr. Trump has heard from someone that China will overtake the US economically in the next 5-10 years. And his nationalistic impulse has been to stop China's economic growth at any cost; forcing it to become less of a threat to the US global superiority.
His rhetoric indicates that he wants "stopping China" to be his primary legacy. That means fair trade with China is not the goal here; but crashing China economically is.
Mr. Trump never says to Chinese: "You are now our economic equal"or gives them any dignity. A narcissistic bully never regards anyone with whom he has picked a fight to be his equal. This is not in his nature. If in doubt, please look up what the Iranian foreign minister asked Mr. Trump to do in exchange for starting negotiations on a new nuclear agreement. He only asked Mr. Trump to show respect and not hurl insults. But Mr. Trump never responded to that request, because that is not how a bully operates.
China has suffered more than 100 years of indignity at the hands of Western powers. It has patiently built itself from a poor country into a global power. It has been always aware that Western countries, once they realize China is catching up with them, will try to undermine it in every way possible. But, looking at Western countries leadership, China may have decided that having this inevitable fight now is better than having it any other time.
6
Trump's weakness in stopping violent gun attacks is all the evidence that Xi needs of Trump's nature. Aside from structural differences in government, and philosophical choices honored in America, it would be very hard for a Chinese leader to imagine such an inability to control the events in his own country.
2
China are well aware of the US electoral cycle. Might Xi spring an October surprise next year to help his 'friend' out of the White House ?
2
Yes, the Chinese are a wonderful people. Let’s just do nothing about them, just like we have done nothing the last few decades. It is the formula for making American great again.
1
Well, Tom, China now joins Iran and North Korea as nations that Trump thinks can be brought to heel under his pressure. How is this working so far?
Trump can't even force out Maduro from a decrepit state like Venezuela.
It is not our adversaries that worry me as much as our lack of allies. From Canada to Germany Trump is spurned. Germany and France turned away efforts to join escort of shipping in Gulf.
Russia, Iran, North Korea are evading Trump sponsored sanctions to varying degrees often in collusion with China.
One of Trump's remaining friends, the UAE has retreated from Yemen leaving the Saudi's and their "brilliant" military tactician and Trump bestie MBS in dire straits. 200 Billion $ in state of the art weaponry and the Saudi's are losing to the Houthi's. Pitiful.
Just this week in Trump foreign policy orbit:
India-Pakistan on the brink.
Japan-South Korea possible trade war.
North Korea continues unabated to fire short range missiles
Turkey keeps Russia S-400 defense and is set to move in Syria.
A little "outdoor festival" in Hong Kong to go with a trade war.
Who is winning? PUTIN.
Brexit and Boris Johnson in GB.
EU fracturing.
New cold war in trade with US and China
Possible future NATO fracture
Turkey cleaving from US on Putin's flank
And most important, racial turmoil in the USA with a growing white nationalist movement ready to launch attacks and incredibly, a President not welcome by many in the city that was attacked by domestic terrorism.
3
Tm Friedman takes the high road in pretending that this is a clash of rational national interests but in reality U.S. policy is being steered by a demented narcissist with the intellect of a 3 year old and a racist streak that continually resurfaces, while China is represented by a successful but defensive 21st century totalitarian who nonetheless has to cope with a restless party behind him and popular expectations that he can't meet. Its a prescription for lunacy rather than rational policy.
2
Trump University, Trump Airline, Trump Casinos, need i go on, failures all, this is the guy whose going to make America great again. Good luck.
2
The world will be plunged into economic distress for one reason: Trump has hated the Chinese ever since Chinese investors bought the Plaza Hotel in NYC after he went bankrupt. He really is that petty.
2
When a president elected has no basic knowledge in economics, or specifics about trade , currency, diplomacy, cultural respect , things change fast. Arrogance will bring America down,and we can not blame China. We created our problems . When we invaded nations for greed , everything else became failure. The Hypocrisy is clear with this unhinged president. In my opinion, he is the worse leader ever. We have absolutely nothing nice about him. He is a very destructive individual and because of his sociopathic behavior we cannot succeed . The trade war has no winners, actually the consumers are the biggest losers. Big corporations can still make some deals to lower the prices , but farmers, small businesses will be hurt badly. This president needs to be impeached. I hope the nightmare ends before 2020. Chinese citizens work ten times harder than Americans. They have a very smart , young population, very energetic,and they want success.They will not stop. We’re not in the same pace! We wasted trillion of dollars on greed wars, instead of making investments in infrastructure, environment, health or give chance to educated our young generation for a better future . We left than behind without hope . We decided to help the 2% of citizens , and obviously they succeeded , but now we have a big inequality in our society. How can we blame China ? They did not send one soldier the last wars. The next administration has to work very hard.
5
Silver lining: Maybe we'll get a big fat Republican-caused recession just in time for the 2020 election.
1
Too late Tom.
America is engaged in a creeping civil war at home, thanks to Russia, not China. People are massacred at every turn, spreading fear and hatred like a virus. I've seen no evidence that China is playing that game. China does, however, see Russian activities against the US as in their interest.
China did not "steal" know-how, they demanded it as a payment for access to their markets. Corporations willingly agreed because of the immense profits they saw. That is the result of corporate greed, and the rich are solely to blame.
The solution you propose is a good one. It won't happen. Trump Is too stupid. Republicans, ALL Republicans, are too cowardly to act in the best interests of the United States for fear of offending fuhrer Donald.
I fear the nation will not make it to the November 2020 elections. War clearly possible and an outbreak will likely cement Trump's reelection.
4
The first and last business decision that Donald Trump made was his choice of a New York City real estate baron daddy to inherit 295 streams of income from that spared him from suffering the consequences of being the single worst individual losing businessman in America over a ten year period.
The second business decision that Donald Trump made was running for President of the United States and refusing to declare, disclose and divest his personal assets into a blind trust.
Thus we can't tell where Trump Mar-a-Lago ends and Trump White House begins because Trump is hiding the nature and state of his Trump Organization business profitable advantage operations arisng from his White House occupation from the American people in his personal income tax returns and business accounting financial records.
Xi Jinping inherited Deng Xiaoping socialism with Chinese characteristics aka capitalism that has propelled 300 million Chinese into the middle class. Along with ending the deadly cycles of famine and flood.
Americans love their cheap Chinese labor goods. Americans love the idea of selling American goods to China. China the # 1 foreign holder of US Treasury Bond debt.
Xi is a lot smarter, tougher, wiser. experienced, knowledgeable and temperate and secure than Trump will ever be.
7
@Blackmamba
Agreed, Xi also has a coherent, detailed long term plan for the economy, industry and society of China, that will be realized.
America has a president that's focused on when the hamberder shop opens.
1
"Under Xi’s “Made in China 2025” plan, the government would provide enormous subsidies, loans and investment funds so that Chinese companies could overtake their foreign rivals."
issue one is as above: Two clashing econmic ideologies; State capitalism versus Democratic capitalism. In the end, state capitalism is not an efficient solution, but we are not near that end. So there is a threat to our national interests.
Issue two: Resistance, as expected, to China's desire for world hegemony.
In the end, we, the USA do "win" and China "loses" but some real pain to get there. And the Eu and Japan are along for a terrible ride..in an economic backseat.
The reality is...we already have won. China will no longer be viewed as the only global supplier as that duty has been quickly spread around ( China has now fallen to our third largest trading partner behind Canada and Mexicio)
My solution: remove tariffs on all countries except China. But leave a level cooling off period with no more changes. The Chinese tariff passthrough to the individual US consumer is completely negligible despite what Wall Street would lead us to believe.
2
China has the largest consumer market in the world. In terms of Purchasing Power Parity their GDP is significantly larger than the US. They have learned how to plan and manage their economic growth to achieve rapid sustained economic growth which includes widespread reliable wage increases year after year spread throughout their economy. Since Chinese entrepreneurs can count on an ever expanding robust consumer market they have the confidence necessary to innovate expand and engage in vigorous job creation. Furthermore they have a successful Targeted Poverty Reduction program focused on lifting millions out of abject poverty into the comfortable consuming class. The Chinese are experts and deadly serious about continuing their economic success. Their Belt and Road Initiate is bringing necessary development infrastructure and hope throughout the world. The US under Trump has no coherent plan and is frightening people throughout the world. Racism, bigotry , division and hatred at home are leaving the rest of the world wondering if we have lost our way.
6
Mr. Friedman, “Made in China 2025”, as your previous article discusses, is just simple modernization of manufacturing processes. it’s also going on across America’s manufacturing sector. Nither are disputes in trade agreements. Lawyers will readily mention that trade disputes are a mainstay. Nowhere, is there a mention of violating any of the World Trade Organization's rules and procedures. Theft of trade secrets or intellectual property has a basis, although it’s difficult to assess, maybe no more than $30 billion over the years. On China using electronic techniques to spy on the US, no one beats the US on either its spying and military budget or technological prowess and success. There are not issues to throw America into a trade war as they are, in total, a blip in the economic successes America has with China. These reasons or complaints are inserted, in an afternote, into a reason Trump’s advisors have given to retrospectively announce some logic into the deranged thinking in the Oval Office.
Trump has insulted, with tariffs and rhetoric, just about every nation America trades with, including, Canada, Mexico, Central, and South America, Asia, Africa, and Europe. Outstandingly, In America, Trump’s racism highlights his domestic policies. Please consider that Trump’s trade war with China falls into the racist category, a straight-out, insensitive aversion to another dominant group or nation. Trump has clearly played his hand and we all know what it is, intolerance.
2
lie after lie...trump stopped some phone company as a security
measure? China spies on US and not the other way round?
please, Mr. Friedman, free yourself and us from you constant lying!
3
Nothing is going to happen until there is a total collapse. Xi has to win so he keeps breathing. Trump has to win so he has a chance at the 2020 elections & stay out of jail.
“If you don’t like the weather, wait a minute!”
November 2020
Peace and prosperity? Seriously?
Vietnam, Iraq, Afghanistan, Syria - peace?
Africa - prosperity?
Spoken like a true American.
M
5
There is a fundamental misconception on part of Trump administration of how Chinese handle confrontation. And this misconception runs truly at the level of cultural differences between two people.
When the trade war first started, it was obvious that China was willing to make concessions. And it was obvious that Chinese believed that some deal could always be made no matter how hard it was to swallow.
But then at some point along the process, it became apparent that the fissure was not as simple as some Boeing jetliners or some millions of tons of soybeans. Still China was not willing to ruin the prospect of a deal by clearly rejecting what has been advanced upon China but was clear to those who understand China better as impossible for China to accept. These demands are naturally seen as taboos for modern communist China and it is flat foolish to even make such demands let alone to set them as a serious goal without a plan for serious military conflicts.
Even at that point, Chinese negotiators still took back the demands, saying nothing, but apparently did some soul-searching in attempts to find ways to resolve the tensions.
What Trump and American trade negotiators don’t understand is that to Chinese, silence doesn’t mean they don’t have problems with these demands. Rather, for issue so serious, silence signals turbulent torrents gathering under the surface.
To me, this is what happened during those silent moths that ultimately led to the talks breakdown in May.
6
This rancor at Chinese production ignores the incredible achievements of Chinese workers.
Chinese workers are magnificent at hands-on manufacturing, just as they were magnificent at their world-famous ceramics, wood furniture with joinery & design unequalled, & many other trades.
Chinese workers exceed US workers at this point. Americans are forever finding ways to avoid the tedium of making things, the Chinese ethic is to get busy & make.
But Chinese workers are working extremely hard at highly focused trades, uncomplainingly, and for absolutely dirt wages in tough conditions in order to produce for Americans who generally refuse to ever work so hard or meticulously, even for good wages & conditions.
Instead of all this tough guy rhetoric & tariffs from a bull-in-China-shop president who clearly despises the Chinese nearly as much as he hates Mexicans, the focus of reform should have been on Fair Trade:
The trade treaties should have required that exporters pay their workers a living wage using verifiably environmentally & ecologically sustainable methods & materials.
The vast under-pricing of product would have evened up, the immense pollution from Chinese production would've been controlled, the theft & rape of Burma's pristine forests for cheap teak patio furniture would've been curtailed, & we could all fairly benefit from the awesome skill & diligence of the unmatched Chinese work-ethic.
Punish China instead for the trade in poached Pangolins, Elephants & Tigers.
8
Trump flails around slobbering threats, my guess is that Xi' s people have profiled trump and recognize his diminishing cognitive ability and are willing to wait until he's gone, hopefully soon.
4
This is why EVERY effort to remove and expose this rogue president—
Must be made NOW. That includes impeachment inquiry and hearings. [As well as preparing for November 2020.]
It's the economy, stupid. In fact it is the economy and much more.
4
"all of Googles security features..." LOL
1
As good as Mr. Friedman's article is, he misses a major point which has been clear since China entered the WTO, their currency is not fully convertible, which means the market has no vote on China's economic policy. If it did, China's economy would look very different. With billions in loans that will never be repaid for cities that will never be lived in, China has more debt than they can service under normal capital markets, and their accounting is not transparent to say the least. If Trump could get China just to make the currency convertible, that would be a start. China should agree to this as they are no longering claiming to be a fledgling economy, but a more equal one. The Communist party there would find it difficult to agree to this, but it would beat losing their role in the global supply chain. Although China can now make better goods, but like their asbestos ridden sheet rock, and tainted milk, they don't know how to create a world wide brand which can guarantee quality. Without that they will never be global economic equals. The Chinese are a great people and should be treated with respect, but they should also meet the world with honesty and integrity, and stop demanding transfer of, or stealing technology. The TPP was a missed opportunity for both parties to resolve their differences a the bargaining table, not via tweet. The US and China have had a great integral economic relationship which, with cooler heads, should continue to new heights.
5
Tom,
This very important column covers a lot of ground and reveals the logical and potentially tragic outcome if we continue on with the unilateral course set by the Trump Administration. This course will certainly cause these two powerful ships of state to unnecessarily collide and no one will like the outcome.
I agree with your description of the most likely collision,
"we’ll be birthing in its place is a digital Berlin Wall and a two-internet, two-technology world: one dominated by China and the other by the United States."
I don't like the end and it should be avoided because there are huge challenges ahead that could be addressed if we can stay a crash until we can install new U.S. leadership for our own multi-cultural, multi-racial, democratic experiment to set an example for international humanity. What we are doing now is NOT a good example.
Now, to the greatest challenge in the history of humankind where the cooperation of China, Russia, U.K., India, France, and the other advanced economies must join together to solve: reinvesting our fortunes and future in the successful transition from oil, coal, & natural gas to new non-fossil energy sources and creating a new global utilities to generate cheap electricity and to scrub the atmosphere of its excessive amount of built-up greenhouse gasses.
It won't be easy but it will be impossible if the various cultures and nations of the World don't join this effort. This is an intelligent, investment approach.
2
@james jordan
This is an intelligent SHARED investment approach.
agree. the trade war is dangerous and disturbing.
Yet, something had to be done due to China's continual stealing of IP, forcing technology transfer to do business in China, and barriers to our goods there.
The easiest way to make America poor though, is to follow Bernie and Hugo Chavez socialist policies. History shows is it a quick road to ruin.
3
@Yes To Progress
Funny, all those European "socialist" countries have a far better society than the US. Safer, better standard of living, better healthcare, better education, better vacation and retirement benefits, longer lifespan, and happier to boot.
Under Xi, China has a long term, detailed plan to improve the economy, industry, innovation and research as well as the standard of living of Chinese citizens while constantly increasing green energy production and reducing pollution.
Meanwhile back at the ranch, the US has a president whose main focus is on when his favourite hamberder shop opens.
Guess which country does best in the twenty-first century.
There appears to be one short term winner in this trade war: Russia's growing alliance with China. Hey, isn't Trump a big fan of Putin? Is this trade war Trump's idea or Putin's?
1
If we could only get Russia involved in sabotaging their economy as well. It would mean the three largest bullies on the planet would be kneecapping themselves. It would certainly cheer people around the world.
An economic downturn would certainly slow the rate of world destruction from our filthy fossil energy economies. That would be a good thing.
5
uh oh!
Trump bad again. Let China do whatever they want..thank you Friedman learned got it.
2
Trump thinks that he can always have his way by just being a belligerent, obnoxious bully.
It has worked quite well for him for all of his life, but his luck may be running out.
It would help if there was any thought behind his actions, but they are only to puff his ego.
10
China is authoritarian, not communist. Sheesh.
3
What so many seem to miss is that the trade war is a great way to move wealth from the lowers classes to the oligarchs. Which I submit was the fundamental reason for trump's trade war in the first place. From the oligarchic perspective it's just picking the low-hanging fruit. While no one notices.
6
The TPP was a largely an IP protection law and was rightly rejected. Tariffs are already low. The focus of international talks should be on enforceable labor and environmental standards.
Globalization as currently practiced creates too much inequality. It needs restraint.
3
@Bill Dan
The US is opposed to enforceable labour and environmental standards.
Just think of the clamoring if the US had to bring their standards up to EU norms.
Imagine, 5 weeks vacation and healthcare for all, along with sound environmental laws, much less pollution and a green energy focus along with higher minimum wages.
Wouldn't that be awful?
1
“ours is a transparent democratic society”
Sorry Mr. Friedman, we’re not even in the top ten. For the second year in a row, the US ranks 19th on the USNews survey of the Most Transparent Countries in 2019. Defined as, “The most transparent countries, those with open business and government practices, well-distributed political power, high levels of trustworthiness and low levels of perceived corruption, tend to be among the world's strongest democracies and affluent nations.” These are the top 6:
Norway
Switzerland
Finland
Sweden
Canada
Denmark
https://www.usnews.com/news/best-countries/best-transparency?onepage
70
@DJ But we’re still on the list, is his point, I think.
1
@DJ
48th in Press Freedom between Romania and Senegal
https://rsf.org/en/ranking
10
@DJ
All those (gasp!) SOCIALIST countries!!
The horror, the horror.
6
Thomas, I hate to doubt you, but you and all your global economists buddies were simply wrong about admitting (Communist) China to the WTO. That move and NAFTA destroyed our middle class, manufacturing base. Why should we listen to you now?
9
Proven autocrat Xi JinPing and the aspiring autocrat Trump are stroking their ugly egos at the expense of world peace and prosperity.
Friedman is prescient in his comments at what happens when two unbridled, selfish, leaders of two great countries can" set the world on fire".
Has happened before, 1939-1945, with 80 disastrous results, the world had never seen before...
6
China is now the global hegemon.
Mr Trump is all bluff and no substance.
9
What a delicious quandary the GOP now finds itself in. It's bankrolled by plutocrats who've hired it for decades to promote policies that enrich them and them alone, while the party is now dependent on a small core of obtuse, low income white voters, who have enthralled themselves to Trump. Keep Trump in office as his base demands, and the markets will roil from day to day; denounce Trump and forfeit your voter base. What's a spineless weasel to do?
63
"If you think that the United States-China trade dispute is going to be easily resolved,..."
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... you’ve been reading the mainstream media.
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There, fixed that for you.
.
It has been clear from the 1990s that Beijing would never stop their IP theft, much of which orchestrated in those early days by the PLA. They were running the dozens of factories that were churning out pirated software, movies, music, etc by the millions and sending them all over Asia. The Times reported widely on this and the Bush I and Clinton "agreements" in 1992 and 1995, under which Beijing promised to stop the theft. They never did.
.
Nevertheless, then Clinton's startling work and wild claims to Americans and Congress that China would embrace democracy if we traded with them. He pushed through Permanent Normal Trade Relations in 1999/2000, which led to China's accession to the WTO in 2001. Republicans voted with Clinton - Dems knew it would devastate our economy.
.
Bush II and Obama did nothing.
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It took massively flawed Trump to fight back against Beijing's economic war, perhaps the only thing he's moving in the right direction on.
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Yet the media and all his enemies do nothing but criticize him for it.
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"Making America poor again" is clickbait. Trump is fighting the war of our time, against the enemy of our time, whose dictators beguiled us into thinking we're partners.
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We're not going to be poor, we're going to adjust and move on. The good people of China will fix their own mess.
8
Trump has absolutely no understanding of economics, history, or even basic civics. He is a nincompoop whose default setting is bullying. His actions aren't about some kind of good instinct, they are about settling old grievances with those he blames for his history of endless failures. He blames everyone from immigrants and minorities who get benefits they don't deserve to China for those failures. Now, he has all the power to get even. (See, Jeff Bezos) His sense of grievance is amplified by his bigotry toward those he considers less than equal to white Americans. His belief that the Chinese aren't equals, and that he can simply bully them into doing what he wants, much as he bullied drywall vendors in NYC, is naive and dangerous. He will never ever accept the possibility that he is wrong or that he made a mistake or a misjudgment, nor will he accept the blame for his failures. Unless Republican officials step up and block his impulsive, ignorant actions, he is likely to fail once again, and he will take all of us right over that cliff with him.
22
@Finklefaye
I agree 100%.
1
Tom, it goes back further than you describe in this column.
President Obama was a fine President, someone who I would have gladly voted for again in 2016 (were he permitted to run for a 3rd term), but he made a serious error in not giving organized labor a seat at the table during the TPP negotiations. While the TPP was said to include the strongest labor (and environmental) protections yet, those protections were nonetheless not strong enough given the sheer devastation that globalism run amok had brought to the American industrial heartland.
While we need to get on the same page with our advanced industrial allies in an effort to counter a Chinese attempt at imposing economic hegemony, we can't attempt to do this without taking into account the legitimate concerns of labor. And I'd argue that the concerns of labor in the US are likely pretty similar to those of workers throughout the advanced industrial bloc. This race to the bottom may have been good for Apple and investors, but it was not good for advanced industrial workers.
Trump torpedoed the TPP because he's a xenophobic idiot - but the next attempt to oppose Chinese hegemony will have to not take industrial and technology workers for granted.
I understand that it's only human nature to want to pay less for everything - but given the appalling performance of America's political class over the past few decades, we could easily outsource all their jobs to China and India and not miss a beat.
383
@Matthew Carnicelli
"This race to the bottom may have been good for Apple and investors, but it was not good for advanced industrial workers."
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Well said.
66
@Matthew Carnicelli
I think you've pretty well nailed it, MC.
I've attended a number of lectures at which TPP was treated as the "given sanity." The hubris, the marginalizing of any and all concerns, the "you don't need to read the text; of course it's perfect" insularity, are what made it possible for Trump and Sanders to agree on an issue.
I was strongly in favor of what TPP should have been. Mr. Friedman, I always tell people you are a nice guy, so I am going to throw this right back in your lap. Please advocate for a revised TPP that proudly proclaims its humane terms in the light of day.
51
@Matthew Carnicelli:
I understand the message and appreciate it but, are we not entering a paradigm where the industrial workforce, regardless of individual ability and industry, is slowly being replaced by innovative machinery; by "machinery", I refer to that which both robotics and AI will provide? "Organized labor" may well be a thing of the past in a couple of decades.
And both China and the US are surely promoting AI in an attempt to further the reduction of costs and more efficient innovation.
Just a thought. . .
20
Our trade policies with China are badly misaligned. We charge them very low tariffs, and give them nearly complete access to our economy. They charge us very high tariffs, steal our IP, and engage in a wide variety of tactics to prevent American companies from benefiting from Chinese consumers.
It is wishful thinking to believe that multilateralism is sufficient to bridge such a large difference. For 15 years prior to Trump, the US aggressively used multilateralism to fix just the IP issue, and got nothing more than a string of unimplemented agreements to fix the problem.
To get a deal, China is going to have to RADICALLY change its trade expectations. This is going to be a painful process, but it can not begin without the threat (or actuality) of a trade war. If we call off the war now, it guarantees that we will have to re-engage with China under far less favorable circumstances during the next president's tenure.
1
The fallout from Trump’s ill conceived trade war was inevitable. Just like his business failures that ended in loan defaults and bankruptcy, Trump decides on one strategy and sticks to it until it and the business completely fail. Hopefully, we can remove from office before he ruins us!
7
"I welcome China as a competitor in these areas. It will speed up innovation and drive down prices. " It will also speed up automation and accelerate the destruction of the middle classes n this country
7
I was born in 1960 to a single income middle class family. We had one TV set (took 30 seconds to warm up), one telephone and one car. We ate out maybe once every couple of months and went to a state park every summer for vacation. And we were happy.
The idea that flat screen TVs, smart phones, disposable T-shirts from Walmart means prosperity and happiness for America is a sham argument. We need solid jobs and less expensive education. We need less poverty. And the idea that the attainment of more and more stuff is making a better America is just wrong.
Friedman's "The World is Flat" concept is not where we should be heading because after China comes India, and then Indonesia, and then Africa, with each one precipitating stagnating wages in the developed world due to lower bargaining power. For these countries and continents it is great and will lift billions out of poverty. For America not so much.
The people that will get the lion's share of the spoils are the same .1% that have been reaping the rewards for the last 30 years.
So what if the U.S. and China decouple and breaks into two camps? It will not be the end of the world. No more TikTok. We'll have to wear our clothes till they wear out. Iceland won't have so many 20 something Americans trampling their fauna. Oh, the horror.
So the idea that globalization and the efficiency and lower prices
13
@Patrick Thanks for this. Behind discussions of trade and the economy, there always seems to be an implicit assumption that we will be better off if everyone has access to cheap goods and the ability to buy the latest high-tech gadgets. It seems like it might be worth stepping back and questioning that for second. These policies are more about what's good for giant corporations and the ultra-wealthy instead of what's good for the average person. Meanwhile the environment gets run into the ground and power becomes concentrated in the hands of global corporations that have no interest other than a nihilistic focus on making money. I haven't seen much from the current form of global capitalism, that we see with the likes of large tech companies such as Google, Apple and Facebook, that makes me want to cheer it on.
3
Most global leaders are simply waiting for 2020. That's the playing field.
12
Why would the Chinese or for that matter anyone make a deal with Trump. By now, unless you've been living under a rock for the last three years knows any deal with Trump in not worth the paper it's printed on.
1001
@Robert Pohlman, yes but his most fanatic supporters don't see that and, unfortunately for us the GOP, aka Mitch McConnell, are among the fanatics. What does it say about the GOP that they continue to allow Trump to "lead" the country?
43
@hen3ry -
Apparently, many NY Times readers are behind Trump on this, based on many comments here. They think he will win because, of course, China is the bad guy, never mind that they're looking out for their own interests and engaged in a trade battle they didn't start.
6
@Robert Pohlman
No matter how wrong or destructive this "trade war" appears, you can be sure that a small number on both sides are profiting enormously from whatever happens.
7
Agree with the main points of this article but i think the doom and gloom is overstated. What is going to happen is, most like Trump will lose in 2020, the next president will rejoin the TPP, make peace with our allies and together get the WTO to change China's being categorized as a developing country and reduce the leeway given to it's government subsidies and tariffs. If Trump does win, this process will be delayed by 4 years.
1
Somehow people have to keep demand in mind...not just for tech and cars but all the other products that keep demand and hence money moving
Monies no good unless it’s changing hands
1
@Brewster
So true. Money ain't moving its all piling up where it is least needed.
1
Mr. Friedman makes logical arguments on how we arrived at the impasse in US-China trade talks. However, his suggested solutions would work in a perfectly rational world; sadly rationality and Trump do not coexist. Trump's philosophy is that if someone is willing to compromise, he/she is weak and Trump has a stronger hand to push harder. Second, Trump does not want to only win, he also wants to humiliate, for which China would never stand because them loss of face is a big thing. So given Trump's temperament and Xi's need to not lose his faces makes the situation worse. Trump does not mind sabotaging US national interest so long as his self-image as a great negotiator (disproven multiple times) stays intact. The only way Trump would succumb to a deal when his base feels the pain of high prices and loss of jobs. At that point he will readily give away the farm but would still call it a "winning". Same for China, when Xi thinks that businesses losses and unemployment at home are large enough to create political turmoil threatening Communist party, he will compromise. Unfortunately, till them both the countries would have suffered irrevocable damages.
4
I get that Americans might find China opaque and mysterious. But a big chunk of the fault lies with the US. China seems to value knowledge of America than America values knowledge of China. I know many more Chinese who speak English, have studied in the US, and have worked in the US than I know Americans who speak Mandarin, have studied in China, and have worked in China.
If China is truly as big a challenge and an opportunity as Mr Friedman paints, then find out more about it, instead of just feeling threatened.
10
When the folks in the Heartland swing districts decide that change is in order, we may have it. Until someone wins them over, many of us (sadly) expect no change for the better. The question then is who can win them over and how? They do not likely read Dr. Friedman's column, unless it is available in comic book form.
5
Thomas Friedman is naive here. The problem with his column is that it assumes that Donald Trump has America's best interest in mind when he negotiates with the Chinese. That is a HUGE mistake. Donald Trump has proven that his ONLY allegiance is too what's good for him, his family and the .1 percent. He hates middle class people and his life's work has been to enrich himself at the expense of others. Donald Trump is happy to burn America to the ground to put an extra nickel in his own pocket and maintain power.
184
This is such a biased narrative. It is NOT two strongmen with equal fault. This trade war is 100% the fault of the United States.
It is an unprovoked attack by Donald Trump on the latest of many nations using his "threaten then extort" tactic. Only this time he made the mistake of picking a nation with a backbone and enough self-respect to punch back and put him in his place.
As the Chinese said "If they want to talk, we will talk. If they want to fight, we will fight."
If only Canada, Mexico, and Europe could be so courageous. Then at least the Iran deal would still be alive.
20
@Tim
Canada, Mexico and Europe are too busy extricating themselves from the USA web to worry about the Iran deal. Politically here in Canada we are in between a rock and a hard place. We share an economy with a nation we can longer trust. I suggest Mexico with a rapidly growing middle class is between a bigger rock and a harder place.
9
@Tim
Dear Tim, if ever you have lots of time to waste, you could study NAFTA and the new trade deal and explain to Americans the extraordinary gains Trump has extorted from Canada. You would be the first to publish a comprehensive list of all we have given up.
As for our lack of courage, you are right, when a crazy person says he will kill NAFTA and destroy your economy and his, we send people to negotiate.
2
Jeb Bush has it spot on when he said trump was a chaos candidate and would be a chaos president.
trump is exactly what we knew he was; an unstable narcissist.
Imagine what he'll do and how he'll lash out against we the people if he loses in November 2020.
21
What are the current advantages of the U.S.? Above all, military weapons and more weapons - and the habit of bullying other countries with the threat of using them. Plus, of course, outsize clout in the financial sector. Meanwhile we're in debt to China, and check out the trade deficit. . . . .
Under Trump, it's come to the point that our natural allies also resent his bullying, and will have no reason to indulge us in a trade fight. The U.S. will end up alone, and that's not a good place to be.
11
@janebrenda
I am not so sure that USA will not be better off with nations that share American values like the Saudis, Russia and the Philippines.
1
We are so screwed.
21
Tom, you’re much better when you’re not bashing the president. This is a very thoughtful piece, however, the lead to the piece is in the last paragraph. After all, isn’t that what Trump’s goal is? To put China and the US on equal footing vis-à-vis trade. Acknowledging China as an equal to somehow suave its ego is silly. If anything, they probably think of themselves as superior to the US when it comes to manufacturing and trade. They have been mastering us for years in the trade business!
2
There needs to some type of shared core values to trade. How do we compete with a culture and dictatorship who promote and sponsor every unfair trade practice, IP theft, and then lie about it all as a societal norm? Eventually trading becomes not worth it.
I don't see change coming from the inside (who would be if facial recognition/cameras track your every move) The HK protests will be the next Tiananmen, mainland is not pushing for change, and the world in general is becoming worse off .
3
All very reasonable, but------Donald Trump has repeatedly proven over decades that he can never be trusted to keep his word, whether it be one of his many failed business "deals" or his completely false promises to voters (I will build a wall, and Mexico will pay for it). The leaders of China are far too clever to accept or believe any agreement that Trump signs. It will be far more likely they will wait until the next administration to forge any type of meaningful or important trade agreement.
12
The author assumes US economy is open and Chinese economy close. You only have to look at how US puts tariffs on foreign light trucks. Even poor Bangladesh pays some of the highest tariff on all the clothes you buy at Walmart and Bloomingdales.
It is ridiculous to spread the myth of Chinese IP theft in this age of open source.
While talking about Google, Microsoft and intel, bulk of the designers have been Indian or Chinese for more than thirty years. I have seen Intel since 80s.
We need to introspect and control our corporations. They outsourced our jobs to China and India, manufacture commodities at 20 percent of domestic production cost and sell at the same price while pocketing all the profits. Perhaps we should have put some Nixonian price control! Remember that?
Mr Trump has a history of bankruptcies and everything looks like a nail when hammer is the only tool you know.
6
'' Ch1na is a nontransparent communist society...'' - Sorry you lost me right there. It is a total1tarian state, that still imprisons (or worse) anyone and everyone that goes against the state, which essentially is now just one man.
How is this different from the SovietUnion, and how the west went all out in combating that scourge against freedoms and human rights ? Well one did not make cell phones.
THIS IS NOT AN ECONOMIC ISSUE. It is one of freedom(s).
The longer we keep framing it as anything else is where we ALL become poorer. Rights denied to one are rights denied to all. There are MULTIPLE wars going on in other parts of the world where tens of thousands of troops are fighting for the maxim of above.
I ask then, what are they fighting for ?
10
@FunkyIrishman The USA invaded Iraq to give them FREEDOM. What happened to that country?
2
Jon Huntsman for Republican nominee. Win-win-win. Country-Party-world.
1
''China is a nontransparent communist society...'' - Sorry you lost me right there. It is a totalitarian state, that still imprisons (or worse) anyone and everyone that goes against the state, which essentially is now just one man.
How is this different from the Soviet Union, and how the west went all out in combating that scourge against freedoms and human rights ? Well one did not make cell phones.
THIS IS NOT AN ECONOMIC ISSUE. It is one of freedom(s).
The longer we keep framing it as anything else is where we ALL become poorer. Rights denied to one are rights denied to all. There are MULTIPLE wars going on in other parts of the world where tens of thousands of troops are fighting for the maxim of above.
I ask then, what are they fighting for ?
2
China did become a global economic power not because it stole technology. No, it got there with a billion people doing the hard work: education, work ethos and investments into infrastructure, public health and research. Yes, China did not invent the computer chip and yes it copied technology. But it’s not enough to steal, one needs to understand the details in order to built high speed trains, airplanes and send a spaceship to the moon.
An update of trade rules and deals would certainly be in order. China will or would have come around to it. This would have been inevitable and also a recognition of what China has built, certainly a recognition that would have been met with pride.
Rightly Chinese media accuse the US of destroying the liberal world order, destabilizing peace and risking global prosperity (along trying to obstruct the reduction of carbon emission).
Under Trump the US has fallen from being the leader in global affairs to being a short sighted villain.
This will end badly for everyone, unless we finally chase this clown out of the White House.
2020: do or die.
15
I have a better idea! At the end of the day, China's super wealthy elite still flock to the United States to buy second homes and educate their children at U.S. universities. If the State department started playing hardball with these people i.e. confiscating their homes, revoke their visas and expel their kids from US colleges and universities. They'll immediately put pressure on Xi to settle the trade war at once.
9
@Aaron
"Funny" since the Kushner family was selling visas to these people.
3
Looks like it’s about time for a Democrat to come in and clean up this mess. This time let’s get rid of MCConnell so she can do it right.
121
@Susan
How are the Democrats any different? For us in Canada the Democrats seem worse not better. It is hard to lead the world when your raison d'etre is America first.
America is America and its wealth is beyond compare. You want to grow your economy whether you are R or D America simply doesn't want to share and your politics are only about how to share internally.
2
@Montreal Moe
"For us in Canada "...
No in my name.
4
@John
My wife is a Democrat and I am no fan of the GOP. I hear the policy statements. My wife is from the midwest and always votes.We watch closely. I trust the Democrats to do what they say. The Trump administration talks a good game of protectionism but I expect the Democrats will deliver.
I lived many years in the States and I hope we can enter the Baltic Trading bloc. We will hope the Democrats win and Canada can find a spot with Sweden, Denmark, Latvia, Estonia, Lithuania.
4
Tom, where were you when corporate America initiated their outsourcing strategies? Now that the cow is out of the barn you talking heads have realized just how dire our economic/foreign trade policies have sunk the country.
9
''China is a nontransparent communist society...'' - Sorry you lost me right there. It is a totalitarian state, that still imprisons (or worse) anyone and everyone that goes against the state, which essentially is now just one man.
How is this different from the Soviet Union, and how the west went all out in combating that scourge against freedoms and human rights ? Well one did not make cell phones.
THIS IS NOT AN ECONOMIC ISSUE. It is one of freedom(s).
The longer we keep framing it as anything else is where we ALL become poorer. Rights denied to one are rights denied to all. There are MULTIPLE wars going on in other parts of the world where tens of thousands of troops are fighting for the maxim of above.
I ask then, what are they fighting for?
1
Our last Republican president tore up the Middle East and left the world to deal with the consequences for generations to come, then left us with a world economy in tatters. Not wishing to be outdone in the "bigly" department, Trump is going to ruin as much as he can in the time he's got.
48
"But he did it in an incredibly foolish way!
"As this column has argued, Trump should have signed the Trans-Pacific Partnership free trade agreement, which would have aligned all the major Pacific economies — except China — around United States trade values, norms, interests and standards, and lowered thousands of tariffs on American products. Instead, Trump tore up the T.P.P."
The Chinese worship competence.
Trump worships trump!
The chineses know he will be gone soon and then they can consolidate their new gains worldwide with all the new friends trump helped them acquire.
Friedman thinks it is great that we have (or had) a completely dysfunctional trade relationship with China: "America bought T-shirts, tennis shoes and toys from China, and China bought soybeans and Boeing jetliners from America."
First, this is the relationship of a third world country selling bulk commodities (soybeans) to a first world country making higher value-added stuff. (Ok, the lone exception - airplanes - went the other way.)
Second, this relationship has resulted in the closing of thousands of American factories over the last twenty-five years, which doesn't seem to bother Friedman. (It never has, see his Lexus Olive book.) This has resulted in thousands of lost middle class jobs in the U.S., which also doesn't bother Friedman.
Third, if Friedman properly understood economics, he would know that buying stuff from China is killing our (potential) GDP. When we buy that tennis racket made in China, the effect on our GDP goes like this: import (-$50), consumption (+$50), so the effect is neutral ONLY IF that tennis racket would never have been made in the U.S. In other words, in 1980, when that racket was made in the U.S., it increased our GDP (c+$50). Now our potential is getting hammered by offshoring, not to mention lost jobs, lost expertise, lost everything.
Friedman is absolutely wrong on trade, and history will eventually prove this. The world, not just the U.S., has to go back to semi-autarky because trade is now based on lowest labor costs only.
7
A lot of people believed that Trump's "snorting" during the 2016 presidential debates meant that he was serious and passionate about solving our problems. In the minds of many, they thought, "here is a businessman...FINALLY...who can handle American interests and do it well." What they failed to take into account adequately was that New York City real estate deals are not the same as international trade, especially with an ascending power like China.
Friedman lays out several basic mistakes that were clearly "unanticpated" by the legions of voters who either don't care or just couldn't vote for "that woman" after "that black man."
1
Problem is Trump does not create trust in the other side. He goes by impulses with no thought and thought process. It’s what he thinks at the moment and he wants to believe he knows better and more than others. China’s XI is not sure if Trump means what he says or will act upon it because he knows Trump can change his tune instantly if he thinks his base can be kept intact with his erratic behavior. China also knows Trump can be played by writing a love letter. China is no hurry. They are willing to suffer and in a non democratic society suffrage can be hidden from the public and world. We can be more successful by methodically approaching the trade imbalance otherwise we will end up the losers because world nations may not be with us any more the way Trump is treating them.
150
Finally some perspective. Both Trump and Xi are the problem. And China does really need to change its behavior.
52
@JarJarBanks
However, as Americans, we have control over ourselves more than anyone. I'm not sure if you like Michael Jackson, but he has a song about looking at the man in the mirror and asking him to change his ways. Trump needs to do that more than just about anyone on Earth.
13
Xi plans to be president for life. So does Trump. What amazes me is that most people who vote for Trump and the GOP represent the cohort with the most to lose by having done so.
8
The root of any negotiation is that both sides have to trust the other. Trump has amply demonstrated to the world that he is not to be trusted (i.e. the lies, and reneging on previous agreements at a whim). So why would anyone want to seriously negotiate with the US while this administration is part of those negotiations?
In the meantime, its better for China to wait it out, try to limit the damage and hope for another administration to deal with. Unfortunately Trump seems to have gained lots of experience in negotiating 5 bankruptcies. Only this time it seems that we are the unwilling partners in his 6th and biggest one yet. Ask a farmer.
542
@Rocky So you are siding with China against the US? Have you ignored China's reneging on agreements already made? China's open hostility to the US when it comes to trade?
3
@Jonathan E. Grant zig If I had to chose a leader that depends on intelligence, wisdom and advanced planning, it wouldn’t be Trump. I’m hoping the Chinese hack the Republican parties emails and release them next October. That’s how far this country is divided, y’all chose Russian interference and malfeasance, progressives might chose communist Chinese help. Money is speech, right?
13
@Rocky, I agree about trust level with Trump acting on whims, but when someone like China steals for 30 years from you, what trust is there? Having worked in China and seen how the law works for foreign companies, I see no hope of western companies ever achieving a level playing field.
3
Definitely a complex issue. Unfortunately, Trump doesn't do complexity....Simplistic or less is his style, and yet here we are. I don't think the Chinese will ever want to lose face, so this is going to be a long, drawn out process for the next President to fix....
1
THE TARGET REGIME CHANGE
Trunmp's policies are to force Xi to choose between tariffs bursting a debt bubble with rising unemployment as factories move offshore, capital flight with major inflation in food and other consumer goods through devaluation, or destroying the CCP's base among zombie state owned enterprises.
All choices yield destabilization of the Chinese Communist Party, the clear goal.
In fact, only a more open, democratic, and non-expansionary government in China can earn the trust needed to trade normally with the US and the West.
It is a shame that we are foregoing the support of allies in this effort. But that is Trump!
2
@Randallbird
Self righteous to claim moral high ground. Our hegemony has killed millions in Korea, Vietnam, Cambodia, Iraq, Afghanistan etc.
Our myopia or total ignorance of history lead us to electoral choices we make again and again.
7
China's largest export categories are computers and electronics, not clothes and toys, and this has been the case since at least 2000. Those products do require trust, but it is quite unfair to deem every company in China untrustworthy merely because China is ruled by an authoritarian government. For example, the Chinese company Lenovo has been one of the world's biggest suppliers of computers and equipment for years, and I have never heard of them creating an unusual security problem. To the contrary, they make good products and have created tens of thousands of good jobs in America. Deciding which companies to trust should be up to each consumer, based on an informed analysis of the individual company at issue, not dictated by Trump based on nationalistic stereotypes.
6
By creating room for a wealthy economy to evolve, China has created a need to pay far more attention to their middle class, upper middle class and the wealthy. They also have to pay great attention to the national pride that all Chinese take in their standing on the world. Xi is simply not politically strong enough to back down from Trump, even if he wanted to, which he does not. Donald Trump, on the other hand, has shown no talent or interest in forming alliances.
What we are faced with is almost certainly is another year and a half before any change in our current course. China, in the meantime is much more likely to publicly antagonize Trump by buying more Iranian oil. They are going to be looking for ways to twist his nose and make him look weak. Ending agriculture purchases is just the beginning. And, Donald Trump has never shown any sign that he can contain himself, when faced with even to smallest confrontation.
Finally, what happens if Xi decides to pursue some sort of new trade deal with the EU, leaving America out in the cold? Why would countries like Germany not find that enticing?
26
There is a complacent, misplaced idea that has swept Western culture over the last 30 years: that everyone can get along and play nicely.
This simply isn't true. The multicultural ethos that has pervaded every bit of our Western system has lulled us into thinking we're all alike. Yes we're all human, but we have different cultures and different ways of governing ourselves.
China and the U.S. were always destined to compete. Finding a "nice" way to deal with that competition simply isn't in the cards. They're communist and totalitarian...we're democratic and liberty-oriented. Sorry, the two systems simply can't co-exist on an equal footing.
As a professor of China's National Defense University the author of "The China Dream" Colonel Liu Mingfu wrote in 2015:
"America will never be a friend of China until China becomes the master of America."
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OK @JOHNNY CANUCK. Point taken. But what do we do about it? The most powerful point this column makes is that Trump has not created or maintained essential alliances to compete with China or compel them to behave one way or the other, either at the negotiating table in the short-term or in other ways moving forward.
I also find it more than a little ironic that you've chosen to define the U.S., in this moment in the midst of this diplomatic clown show as democratic and liberty-oriented. While these are principles to which (I hope) a majority of Americans still aspire, it is not informing the President's choices, behavior or rhetoric in this circumstance specifically, or on the international stage in general.
It's true that not everyone is going to get along or play "nicely" (which, frankly, rarely happens in this economic context nor is it something Friedman argued for). But two of the world's largest economies are going to be at play, like it or not.
What do you propose we do to stay in the game?
1
@JOHNNY CANUCK
Your statement has it backwards. China seems to have no problem doing business with democracies, and doesn’t try to force its system on other countries. On the other hand, we’ve put severe sanctions on Cuba and Venezuela, which pose no threat to us, just because we don’t like their leaders’ ideology and want to change their governments. China has never sanctioned a foreign country over such ideological disagreements. We can easily coexist peacefully with China if we accept that countries will have different political systems and that’s fine as long as they don’t try to force their systems on others.
1
So, the world is flat and now *deep*?
Flat and deep.
May take me a while to puzzle this one out.
Next thing, you're gonna tell us tall tales about olive trees and luxury cars....
13
HRC would have joined the TPP without accompanying pressure on China. Without the latter, there would be little achieved.
We can argue the way Trump is handling China. But if you had HRC, her administration wouldn't have challenged China, just like Obama, Bush and Clinton administrations.
Thank God, HRC is not the President.
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@MS
As I recall, HRC wanted to join but changed her tune under pressure from the Sanders side. So she gave up the opportunity to pressure China through TPP, just as Trump would do. But had she been allowed to assume office, I suspect she would have found a way to educate the public on the need to have allies in upholding TPP standards and we'd be a lot better off today as members of TPP.
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@MS
Trump is a one trick pony with tariffs and he doesnt understand the first thing about economics and he has no advisors he is going it alone. Consumers pay tariffs, not China....and they are 10 times as smart as Trump. We will lose and China will win....
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@MS
Yes, massacres perpetrated by racists, a fraying international order, the undermining of the rule of law, an impending environmental catastrophe ... all are but a small price to pay for keeping Hillary Clinton out of the White House.
4
If Xi's attitude towards equitable trade with the US and the rest of the world is a downstream product of the CCP's opinion of China's rightful place in the world, no amount of reciprocity in trade negotiations will fix the real problem.
I mean, we've got to call a spade a spade. Under Xi, China has become an economic powerhouse with no compunction about appropriating disputed territory into its national borders, interning millions of its own citizens on religious grounds, and coercing foreign press and media into self-censorship. That same China stands to become the largest economy in the world, indefinitely, within our life-time. It's entirely possible the CCP's values do not allow them to think of the Chinese economy in terms that are compatible to "fair" trade, hence our current dilemma.
Trump has lost this thread entirely with his ham-handed economic nationalism, but the burden of proof should remain on Xi and the CCP to establish that China's economy isn't a cartel that exists primarily to finance and leverage the empowerment of a fundamentally undemocratic and totalitarian government.
So far, they've failed, and you have to wonder if that's because that is precisely how they view their economy. If that's the case, we SHOULD be willing to box them out of the US economy and be poorer for it.
We'd be putting values before profit.
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@Jacob Alexander
That's a LOT of profits ye spoke of so lightly.
If there be imbalance, it is the abject profits deficit on the China side.
American subsidiaries sell over $550 billion a year in goods and services inside China each year. But because of serious protectionist moves, Chinese subsidiaries are allowed only about $25 billion in sales inside the U.S. The balance in profit further magnifies this deficit; goods and services sold by American companies trump the Chinese margins by far.
American auto majors sell more cars in China than they do in the U.S. Who is not opening markets?
What the administration is doing is killing off this net profit stream, further magnified in the stock market by P/E, and it is REAL LOSS in American wealth, all thanks to the wrongheaded policy.
2
@Zhubajie
Japanese and German carmakers do just fine in US markets.
European telecommunications, food, and pharmaceutical companies don’t seem to have too hard a time either.
But those points are neither here nor there.
Until the CCP can honestly claim it isn’t seeking “world order with Chinese characteristics,” China should not be given any more leverage over global commerce.
2
China builds iphones for us and we sell them soybeans. Soybeans are fungible, you can get them from any source and they're pretty much the same. Not so with cell phones. China can get their soybeans from Brazil, but where will we get our iphones and other gadgets made with "deep" technology? It will take a long time and a lot of money to build new factories elsewhere. And so this trade war will not be easy to win. Most probably both sides will lose.
21
Xi's China is a different beast, we are in new territory and need to adapt accordingly.
It's hard to advocate diplomacy or the TPP's soft approach when the PRC's President for life continues its South China expansions, ignores the massive protests in Hong Kong and is escalating its trade war with the US.
I think, more than anything, recent events show that Trump's confrontation was/is the right way to go even if it inflicts short term damage to the world economy.
We can clearly not allow this China to become the most powerful country on Earth. Since Xi this is a matter of national security.
The EU, which is not spared by China in the trade conflict anyway (devaluation of RMB affects Europe in no small way), should join the US in demanding fair trade or else tariffs.
7
All these trade war news are scary, but I just can’t help wonder: if the global economic slowdown comes sooner, will CHANEL stop price hikes and we can soon spend less money to buy a tweed jacket imported from France. lol.
There are three possible ends here.
The first is that Trump follows his usual course: Bluster, declare war, surrender, declare victory.
The second is that both sides agree to a standstill.
The third is that the trade war destroys the world economy.
My bet is on the first, but the third is still possible.
And in no way will China ever back down unilaterally.
81
I'm no economist, but I know a fool when I see one.
I said months ago to a friend that Trump is in way over his head in global trade negotiations and will overreach with China. I knew that China was in a far better position to wait out the US when economic times get tough. Problem is, Trump will never back down and we'll all suffer his ignorance.
I hope that's not exactly what will go down here, but it's looking like we may be heading down that dark road.
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@WS
I wish that all would stop saying "Trump" won't do this or that.
It should be: "Trump/Republicans" won't act to do the right thing.
We could mitigate a lot of trumps damage if there was a majority to oppose it.
The majority of the Senate/Congress could reign in this ignoramus, but the Republicans won't.
17