Escalation—President Trump’s Bold Maneuvering and Strong Leadership

The trade impasse between the United States and China escalated on Friday.  China’s announcement that it would slap new tariffs on $75 billion in US goods prompted a bold response by President Trump to answer with a bevy of more tariffs of his own, and add a startling and unflinching threat: to declare a national emergency.

 

This is a complicated issue that has many facets and is tied and intertwined with certain critical aspects of the US and global economy.

 

Without question, President Trump is correct in his analysis that the trade deficit and underlining recession dynamics are connected.  Moreover, he is correct to have the flexibility and foresight to know when progress would be better served through bilateral negotiations.

 

While I am a proponent of free trade, and dislike tariffs as a whole, I also realize that if we are to survive economically we must close the trade gap to manageable levels.

 

It was a cleverly manipulated maneuver to broker a deal with Japan to include large purchases of American agricultural products, offering a base for possible future compacts, as well as driving a wedge into the TPP.

 

By chiseling into the TPP, President Trump allowed it to be used as a leverage tool against China and the Asian countries who have abused and taken advantage of our trust and trade kindness through the decades.  Additionally, by mildly threatening a national emergency, President Trump put pressure on China and the US business operatives working in China to be more willing to come to terms.

 

I agree with the President that if tariffs were going to be used they should have been raised higher.  However, because of the complexity of the circumstances, the manipulation point of the tariffs was a difficult amount to determine.

 

Lastly, Larry Kudlow, the White House’s top economic adviser, declared unequivocally that there has been no change in the status or posturing of the United States’ regarding the issue.

 

It is only strength that China recognizes and respects.  If the president and his staff remain unwavering and strong, our country will prevail in this trade stalemate.

 

Photos: chuttersnap, Robert Nyman, History in HD

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