30 June 2019   Leave a comment

Jeffrey Sachs has written a very thought-provoking essay on the interventionist nature of President Trump’s foreign policy. President Trump made it very clear that he is opposed to further military interventions, but that has not meant that he does not wish to use US power to achieve certain objectives. Sachs argues that Mr. Trump has substituted economic power for military power.

“While Trump has so far eschewed a new war, he has continued US regime-change efforts by other means. Trump is often called an isolationist, but he is as interventionist as his predecessors. His strategy, at least so far, has been to rely more heavily on US economic power than military might to coerce adversaries, which creates its own kind of cruelty and destabilization. And it constantly risks flaring into outright war, as occurred with Iran this month.

“The Trump administration currently is engaged in three attempts at comprehensive economic blockades, against North Korea, Venezuela, and Iran, as well as several lesser blockades against countries such as Cuba and Nicaragua, and an intensifying effort to cut off China’s access to technology. The blockade against North Korea is sanctioned, at least in part, by the UN Security Council. The blockade against Iran is in direct opposition to the Security Council. And the blockade against Venezuela is so far without Security Council engagement for or against. The US is attempting to isolate the three countries from almost all international trade, causing shortages of food, medicines, energy, and spare parts for basic infrastructure, including the water supply and power grid.”

It remains to be seen if this strategy is effective. So far, Mr. Trump has not succeeded in his efforts. In the long run, moreover, he may erode the singular role of the American dollar as many countries try to circumvent the sanctions he has imposed. Europe has announced that its alternative payments system, INSTEX, has become operational in a way that will allow some European companies to continue to trade with Iran. Significantly, China has announced that it will support the European effort. It may be that President Trump will hasten the end of the dollar’s role as the world’s reserve currency.

US President Trump and Chinese President Xi spoke together at the G-20 meeting in Osaka, Japan. From what we know about the discussions, the two decided to call a truce in the trade war. President Trump had threatened to raise additional tariffs on $300 billion worth of Chinese goods if the trade talks were not restarted. But the Chinese refused to engage in any further trade talks because they considered the US demands unreasonable: they view the trade war not as a matter of economics, but rather as a US attempt to stifle their technological development.

The US made two concessions to the Chinese to persuade them to return to the bargaining table. First, the US will allow the Chinese company Huawei to purchase US technological products. The US had banned such sales because it believed that Huawei products compromised national security because of its close ties to the Chinese government. Second, the US decided to ease up on visa restrictions on Chinese students attending US universities. The truce does not resolve any of the major issues between the two states. We shall see if the future talks are productive.

Posted June 30, 2019 by vferraro1971 in World Politics

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