by Michael Hudson for the Saker Blog (cross posted by authorization of the author with https://michael-hudson.com/)
President Trump has threatened China’s President Xi that if they don’t meet and talk at the upcoming G20 meetings in Japan, June 29-30, the United States will not soften its tariff war and economic sanctions against Chinese exports and technology.
Some meeting between Chinese and U.S. leaders will indeed take place, but it cannot be anything like a real negotiation. Such meetings normally are planned in advance, by specialized officials working together to prepare an agreement to be announced by their heads of state. No such preparation has taken place, or can take place. Mr. Trump doesn’t delegate authority.
He opens negotiations with a threat. That costs nothing, and you never know (or at least, he never knows) whether he can get a freebee. His threat is that the U.S. can hurt its adversary unless that country agrees to abide by America’s wish-list. But in this case the list is so unrealistic that the media are embarrassed to talk about it. The US is making impossible demands for economic surrender – that no country could accept. What appears on the surface to be only a trade war is really a full-fledged Cold War 2.0.
America’s wish list: other countries’ neoliberal subservience
At stake is whether China will agree to do what Russia did in the 1990s: put a Yeltsin-like puppet of neoliberal planners in place to shift control of its economy from its government to the U.S. financial sector and its planners. So the fight really is over what kind of planning China and the rest of the world should have: by governments to raise prosperity, or by the financial sector to extract revenue and impose austerity.
U.S. diplomacy aims to make other countries dependent on its agricultural exports, its oil (or oil in countries that U.S. majors and allies control), information and military technology. This trade dependency will enable U.S. strategists to impose sanctions that would deprive economies of basic food, energy, communications and replacement parts if they resist U.S. demands.
The objective is to gain financial control of global resources and make trade “partners” pay interest, licensing fees and high prices for products in which the United States enjoys monopoly pricing “rights” for intellectual property. A trade war thus aims to make other countries dependent on U.S.-controlled food, oil, banking and finance, or high-technology goods whose disruption will cause austerity and suffering until the trade “partner” surrenders.
China’s willingness to give Trump a “win”
Threats are cheap, but Mr. Trump can’t really follow through without turning farmers, Wall Street and the stock market, Walmart and much of the IT sector against him at election time if his tariffs on China increase the cost of living and doing business. His diplomatic threat is really that the US will cut its own economic throat, imposing sanctions on its own importers and investors if China does not acquiesce.
It is easy to see what China’s answer will be. It will stand aside and let the US self-destruct. Its negotiators are quite happy to “offer” whatever China has planned to do anyway, and let Trump brag that this is a “concession” he has won.
China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama got. And doesn’t he deserve it more? After all, he is helping to bring Eurasia together, driving China and Russia into an alliance with neighboring counties, reaching out to Europe.
Trump may be too narcissistic to realize the irony here. Catalyzing Asian and European trade independence, financial independence, food independence and IT independence from the threat of U.S. sanctions will leave the U.S. isolated in the emerging multilateralism.
America’s wish for a neoliberal Chinese Yeltsin (and another Russian Yeltsin for that matter)
A good diplomat does not make demands to which the only answer can be “No.” There is no way that China will dismantle its mixed economy and turn it over to U.S. and other global investors. It is no secret that the United States achieved world industrial supremacy in the late 19th and early 20th century by heavy public-sector subsidy of education, roads, communication and other basic infrastructure. Today’s privatized, financialized and “Thatcherized” economies are high-cost and inefficient.
Yet U.S. officials persist in their dream of promoting some neoliberal Chinese leader or “free market” party to wreak the damage that Yeltsin and his American advisors wrought on Russia. The U.S. idea of a “win-win” agreement is one in which China will be “permitted” to grow as long as it agrees to become a U.S. financial and trade satellite, not an independent competitor.
Trump’s trade tantrum is that other countries are simply following the same economic strategy that once made America great, but which neoliberals have destroyed here and in much of Europe. U.S. negotiators are unwilling to acknowledge that the United States has lost its competitive industrial advantage and become a high-cost rentier economy. Its GDP is “empty,” consisting mainly of the Finance, Insurance and Real Estate (FIRE) rents, profits and capital gains while the nation’s infrastructure decays and its labor is reduced to a prat-time “gig” economy. Under these conditions the effect of trade threats can only be to speed up the drive by other countries to become economically self-reliant.
“China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize.”
Great Idea. No more obscene than giving one to Obama who sold, what was it,$120 billion in arms to Saudi Arabia.
BTW, this paragraph just MADE MY DAY, LOL..!
“China has a great sweetener that I think President Xi Jinping should offer: It can nominate Donald Trump for the Nobel Peace Prize. We know that he wants what his predecessor Barack Obama got. And doesn’t he deserve it more? After all, he is helping to bring Eurasia together, driving China and Russia into an alliance with neighboring counties, reaching out to Europe.”
You are right, Mr. Hudson..!
Many thanks for this article..!
The cold war was based in the ideological difference between a Capitalist and Communist Superpower. There was very little trade between the Soviet Union and the West so Trump’s trade threats are nothing like the cold war. They may be a big Capitalist dog trying to beat another into submission or simply a game to ensure the Global MIC has a reason for existence.
Strictly a Cold War is combat without armies fighting.
China is mainly the mechanism being used by globalist interests to attack not only America but other open economies. China and Xi are as much a hostage of those forces as a tool. China is being used and those interests are also setting up China for a fall too.
Xi needs to realize that sorting out the trade gripe with the US will be in China’s long term interest so both countries can work to defeat those interests who are trying to control both of them.
An example of TrumpCo tariffs: A steel shelving unit that cost $50 last year was advertised as On-Sale for $149! I own the same unit bought 40 years ago–Made in USA –for under $10! I asked my adult step-kids at dinner the other night if they knew what a tariff was. Samantha answered, “Isn’t it a sort of tax?” Yes, I replied, and explained how it works. Tariff policy once drove domestic US politics, but what they are and how they operate are barely taught in US schools anymore as part of dumbing-down the public. Recently, a retail chain, Dress Barn, closed its 650+ stores since it can no longer stay in the black due to TrumpCo’s tariffs. Visit any big box retailer just to walk the aisles and look at the prices, and you’ll discover quickly why sales are down. Shadowstats shows inflation at @10%, but I don’t think the tariff effect has begun to hit yet as retailers were still selling pre-tariff inventory. One area that will be hit hard is construction as a great many house building components are now made in China. And if you read the White Paper on Trade (doc format) produced by the Chinese Politburo, you’ll know Trump will get nothing from Xi at the G-20. I imagine Xi will stop by on the sidelines, say hello, have a cup of tea, then say goodbye.
A Civil War … an eonomic war (via tariffs/tax) within a country (internally) can be seen as “a civil war”.
“Shooting oneself in the foot”.
It is not MAGA … make America great again, but is creating poverty.
Op shops and secondhand shops will be doing a roaring trade and recycling those old robust American products which is both frugal and sensible.
Sanctions are a double edged sword which only a fool would remove from its sheath.
I have been buying older US-made items in thrift shops for years.
It is foolish to waste money.
Especially on newer, shoddily made goods.
Many of which, unfortunately, come from China and other low-labor-cost meccas.
While driving to visit relatives I recently listened to WGBH’s “Market Watch” program (normally I don’t pay any attention to any PBS stations anymore).
One segment was by talking heads from the Peterson Institute, talking about the dangerous line China is taking by imposing tariffs on this and that. No mention was made of US-imposed tariffs.
The next segment was about how “millennials” are not buying household items but instead are leasing them. All kinds of things, from backpacks to furniture. One of the reasons given for the trend was that they want to “experience” higher-end goods than they can afford. Again, I wondered why these people don’t just go to the next thrift shop if they need something (including an ‘experience”)—or one in an affluent community. I got a beautifully upholstered couch and a very unusual Peru-made dining-room table (list price: ca. $1300) for ca. $350 for both. Expensive for a thrft shop! Of course, in order to get good deals at a secondhand shop you have to be able to recognize quality goods on your own, withouit the “conspicuous consumption” price tag signal.
Truly I feel sorry for younger Americans. They have no idea . . .
Hee, hee-perhaps Trump is Putin’s agent after all. He’s doing quite a bit to hasten the Real Evil Empire’s demise. Actually, seeing the estimable Comrade Hudson reminds me that he appeared on Crosstalk in the last few days. He and a very admirable Chinese fellow from Beijing, and a pretty young thing from the USA, obviously added for ‘contrast’ and comic relief. She prattled on, airheadedly, declaring her adoration of that boon to mankind ‘Free Markets’ and similar clap-trap, that caused much smirking and head shrugging in bemusement from Hudson. But then she declared that China was in big trouble, its economy and trade contracting, its collapse imminent, while America was powering along in a ‘boom’. Hudson almost lost his self-control and guffawed out loud, while the patient Chinese explained that the Chinese economy was growing at 6.4%, twice the US rate, and trade was greater than ever. The bimbette, of course, being Homo americanus ssp ignoramus, believes that the world starts and ends with the glorious fifty states. What poltroons these Exceptionals truly are.
The US BEA — Bureau of Economic Analysis — issues reports on Non-fuel import prices from May to May. The Non-fuel May 2018 – 2019 import price index fell 1.4%.
In terms of origination, prices for goods from China declined by 1.4% and 1.6% the year before. (Prices from Japan recorded no change in the period.)
In other words China is massively subsidizing its exports to the US.
Well, good on them. No doubt they pity the tens of millions of poor Merkins, suffering under Trump’s tariffs. Plainly the Chinese are more concerned for the bottom 90% in the USA than Trump and the Zionazi elites are.
EU and Russia Reportedly Agree to Ditch Greenback in Bilateral Transactions
“The decision comes a few days after Russian President Vladimir Putin slammed the US dollar as a tool of pressure while speaking at the St. Petersburg International Economic Forum (SPIEF).
Russian Finance Minister Anton Siluanov and Maros Sefcovic, vice-president of the European Commission for the Energy Union, have agreed to set up a working group that will deal with a transition to using the rouble and euro in bilateral payments, Russian media outlets reported, citing Siluanov’s spokesman, Andrei Lavrov.
Both sides have reportedly emphasised that the use of national currencies will be mutually beneficial, as it reduces certain risks for entrepreneurs in Russia and the EU.”
What is happening is what the less extremist portion of the zpc/nwo feared would happen with a trump regime. The extremists would treat the world the way likud in israel does. “Friends” must simply take orders and not criticize, “enemies” are to be exterminated.
The less extreme wing of the oligarchy saw that the likud extremism, represented in their primo usa colony through their trump quislings, would cause internal resistance from some sectors of the zpc/nwo and hinder the oligarch’s attempt to prevent multipolar power sharing.
America has serious trade related & money flow issues with China and EU that needs addressing. Only by being tough will the long term problem be solved AND that is to the benefit of all as it will stablize the relative value of the US dollar.
Historically most fighting wars are in fact caused by economic issues of one type or another.
War has already been declared on America by a combination of internal and external forces – the internal forces mainly being politicians and business interests that are foreign agents or foreign owned (aka Soros) whose policy agenda is designed to pander to external interests (and or generate $ trillions for US businesses who are more interested in profits over the soundness of the US economy including the distribution of wealth). This has gone for well over a century and has run the US into debt and cronic trade deficits. Accordingly Trump has come along to put a stop to this decline and tariffs are an appropriate weapon.
Those forces are in fact trying to break America by running it into debt and weakening its economic and social structure.
And that is why working class people turned against Hillary Clinton at the 2016 election.
The writer is correct it is Cold War 2 but it is in response to an attack previously mounted.
I don’t think China should nominate the thug as a nobel prize winner – how would the world react to that ? That’s totally a Yeltsin move.
The Chinese have cornered the market for surgical supports. They will make a fortune selling them to the millions who will rupture something through laughing themselves silly at the prospect of a Trump Peace Prize. Cunning devils.
The tranquil nomenclature is Cold War 2.0.
The reality is Hybrid War.
The means of war are plentiful and all are in service to the goal of War–the utter defeat of one’s enemy, the destruction of its national capabilities and the surrender of its society and subservience to your will.
Look closely at all the means of hybrid war already unleashed against China (oh, yes, against Russia and Iran, too).
This is for all the marbles. It’s not an estrangement, a slow freezing of normal intercourse that Cold War pretends. This is the destruction of all bridges, all connective tissue, in an environment of chaos and the psy-ops of mass media messaging and fake news.
Diplomacy is out of the question. Reliance on past treaties and agreements is out. Third party go-betweens are out. Just like in all past wars.
C’est moi or rien. On your knees, kiss his ring.
It is not just Trump and his personality. He has become the Hegemon. He has absorbed the persona of the Ruler of the Globe, a fiction that in America is the only reality left to the disintegrating society.
We saw this in the US before, when the Native American civilization came apart, the Circle Broken, as Black Elk wrote. The US elites have chosen to Ghost Dance, like some of the Plains Indians. It is what happens when it is clear psychologically to a society, especially the elders, that it is over, all is lost.
The difference is the US government still possesses nuclear weapons. Some one will have to talk them down from the abyss over which they rule.
The New Era for which China and Russia have fashioned their strategic comprehensive partnership of coordination is here. They have taken upon themselves to do the talking down.
When Trump shuts up and listens, he’ll get the word.
The MICC scamtards favorite hybrid war tactic is bombing wedding parties, funeral processions and also scammming congress with threat inflation.
Excellent analysis. Also because of Linguistic and cultural differences US demands impossible for China to meet. Chinese also remember the Opium Wars when using “Free trade” as an excuse the Brits forced Opium on them. Looking at the CIA flood the USA with drugs, Chinese have no reason to copy USA system.
There’s an article in the Guardian sewer today from a freak called Michael Fuched, or something similar. An ex-State department apparatchik. With consummate arrogance, mendacity, hypocrisy and contempt, he argues that it is not the Chinese Government that has the Chinese people’s best interests at heart, but, in fact, the glorious West. China is run, according to this zealot, by the CCP, who torment and repress the poor Chinese, who only yearn to live ‘Free’, like those lucky Americans living amidst the human faeces and typhus in Los Angeles, or those happy Americans, two and a half million strong, residing in the paradise of the US prison-industrial complex, or those blessed Americans, 100,000 in number, enjoying the privacy of solitary confinement, some for decades, or those doughty Americans working three or four low-paid jobs just to keep the wolf from the door. Pity the poor Chinaman, living in the largest economy, by at least 20%, in the world, with wages steadily rising, foreign tourism beckoning, dazzling infrastructure everywhere, extreme poverty vanquished, amidst clean streets, increasingly frequented by electric buses and cars, with high-speed trains criss-crossing the country and culture and art burgeoning. How they must long to flee and move to the Free World.
“Freedom” means freedom for judeo-sociopathic con men to run scams and become billionaire sociopathic oligarchs who own the government led by a Chinese Yeltsin.
people ask me if i were an american who i would have voted for – hillary or trump. my answer is i would have destroyed my ballot but i would have regretted not voting for trump. my reasoning is that trump has made it perfectly clear that the POTUS is not in charge. if anyone was ever in any doubt about the existence of a deep state, it should be crystal clear by now. if you don’t see that then you are not paying much attention. looking back on his campaign i think he was sincere, he was just not allowed to act on any of it. i’ll never forget it when he said during his campaign that we (usa) will look to our national interests with the understanding that you (everybody else) will look to your own national interests. this is econ 101. do what your are good at (i could be mistaken but i think this is Ricardo thinking – or was it adam smith?).
hillary was phony. that’s why she never had a chance. and that election was not the sign of a “divided america”. she lost substantially.
Hillary was no phony. She made plain her detestation of the deplorables and her fealty to the rich, and her psychopathic aggression overseas.
To add to my previous comment below – China is a largely puppet-pawn and caught in the middle of things being used by the same forces had manipulated the US until Trump arrived.
Trump’s tariff stick on China is in fact an indirect means addressing those other forces, based in EU, and who are running Macron, Merkel etc….
Thank you Mike.
Trump deserves the Nobel Peace Prize and the honorific of “Emperor of China” for putting down the Peking rebellion.
The theories of John Boyd trump the theories of John D Rockefeller because the public and private educational system didn’t check the mating of the unfit elite, like Donald Trumptard and the neo conartists.
Nobel prize for Trump. Brilliant. After all, he helped murder 85,000 children in Yemen. Isn’t that enough? And that’s just for starters in his list of ‘accomplishments’ in the Middle East and elsewhere around the world.