16 June 2018   Leave a comment

One of Chancellor Angela Merkel’s coalition partners, the Christian Social Union (CSU), is threatening to leave the government, a move that could end Merkel’s government.  The CSU is philosophically aligned with Merkel’s Christian Democratic Union (CDU), but, faced with upcoming elections in their base, Bavaria, is moving further away from Merkel’s more lenient stance on immigration.  Horst Seehofer is the Interior Minister and a member of the CSU, and he has submitted a plan to end immigration, violating both Merkel’s and the European Union’s policies on immigration.  Merkel’s most recent government has only been in power for three months, but they have been very difficult months for liberals in Europe.  After the election in Italy, Merkel’s commitment to a rules-based liberal order is shared by one other major European economy, France.  The US under President Trump has moved far away from the post-World War II consensus and authoritarian governments, in Europe and outside of Europe, are gaining power.

 

In another move signaling the end of the commitment of the US to liberal values abroad, Reuters is reporting that the US plans to leave the United Nations Human Rights Council.  The departure is due to the US belief that the Council has a strong anti-Israel bias.  During the George W. Bush Administration, the US boycotted the council for its alleged anti-Israel policies but President Obama rejoined the Council in 2009.  Most recently, the Council has condemned Israel for the excessive use of force in the protests in the Gaza Strip.  The Trump Administration is also upset that the UN High Commissioner for Human Rights criticized the US for its current policy of separating children from the parents when they are found to be in the US without proper papers.

 

China has retaliated with its own tariffs to match those imposed by the US on its products.  The tariffs amount to about $50 billion, exactly the same amount of the value of the tariffs imposed by the US.  According to New York Magazine:

“China says its tariffs will follow the same time line as the new U.S. ones, with the first wave hitting July 6, targeting 545 U.S. products worth about $34 billion, including soybeans, whiskey, orange juice, electric cars, salmon, and cigars. The second wave of Chinese tariffs will come later in the year, aiming at 114 other products worth $16 billion, including chemicals, medical equipment, and energy products like coal, crude oil, and gasoline.

“China also said that ‘all economic and trade agreements reached by previous negotiations will be nullified’ when the new tariffs go into effect. In one of those agreements, which was conditional on Trump not threatening new tariffs, China promised to buy $70 billion worth of U.S. agricultural and energy products — a trade-deficit reducing deal which Trump had prematurely hailed as a victory.”

China TImes states its view of the issue:

“In recent years, China has reduced its trade surplus with many countries, and some later had a trade deficit. But it is difficult to reduce the trade surplus with the US. The fundamental cause is how the US has a low national savings rate.

“Americans spend more than they can make, which guarantees the country will always have a significant trade deficit with another nation. Furthermore, the high-tech industry is a US trade advantage, but they like to play the role of ‘agriculture country’ and while the Middle East likes to play the role of ‘energy production country’ in trade with China. The US continues to limit its high-tech exports to China but is more than willing to sell their soybeans, corn, wheat, petroleum and natural gas.

“Besides reducing the trade deficit, the Trump administration aims to curb China’s high-tech upgrades and prevent it from advancing along the global supply chain. They routinely accuse China of stealing intellectual property and force international companies to transfer their technology. The tariffs announced Friday by the White House begin with China’s high-tech products.

“Anyone with a primary education could easily realize there will never be a balanced China-US trade relationship by selling soybeans and petroleum. There isn’t one country who would give up their rights to advance technology and make industrial upgrades, and yet President Trump insists on selling agricultural products to China.”

Its editorial conclusion is a sharp rebuff to the historical position of the US:

“The US ignores the rules of the multilateral global trading system and has even set their credibility aside for bilateral negotiations. For a long time, it has been a staunch advocate of the current international system. Its interest should be fostered and appropriately collected. And yet here they are willing to sacrifice everything for short-term gains.

“Dealing with the US is difficult, but China can easily refuse theft and coercion. China will remain with the US through negotiations and war. If a trade war between the two becomes fierce, the result will not provide a favorable political environment for President Trump.”

There are three weeks before any of these tariffs are finalized.  We should know by then if the world will be engaged in a trade war.

Posted June 16, 2018 by vferraro1971 in World Politics

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