Academics proclaim that in tariff wars there are no winners, all economies fell. True, but the current “war” is not about economics, as it started out to be, but a personal vendetta by US president Trump against China’s president Xi Jinping.
Trump started the war by imposing trade tariffs against all of its trading partners. There were no exceptions, even for those, like Hong Kong and Australia, who had deficits with the US.
Even though Hong Kong is a member of the World Trade Organisation (WTO) in its own right, Trump lumped Hong Kong under the broader China umbrella and imposed tariff hikes totalling 145 per cent against all products exported to the US. The rest of the world faced a base-line levy of 10 per cent. And this is where Trump’s plan became personal.
Trump’s plan was for the world to kowtow to him and acknowledge that he was the world’s leader. Most did, although there has not been any announcement of any deal being struck anywhere. And then came China’s Xi Jinping, who refused to kowtow, vowing to “fight to the end” and upped the ante of tariffs on US goods imported into the mainland.
Economies were floundering and markets were weak. Trump took advantage of the low market and after announcing exemptions for his billionaire club, while the rest of the population suffered, it appeared that he had made a deliberate gesture to manipulate the stock markets by declaring a 90-day pause in the tariffs. “Be cool” Trump wrote just hours before announcing the pause. “This is a great time to buy!” This was white collar terrorism in plain sight.
Global markets rose rapidly with the Hong Kong Stock Exchange up 51.17 per cent. But that bottomed out the following day amid rumors Trump was to declare martial law to police the southern border with Mexico.
The manoeuvre could have been taken from his book “How to make a deal”. Except it is not his book as he often boasts. The book was written by ghost writer Tony Schwartz who wrote in The New Yorker “Trump’s tweet that he has written bestselling books is one more deceit and delusion. He is incapable of reading a book, much less writing one.”
While Trump sits in the Oval Office contemplating how he can outsmart Xi, the Chinese president has been busy shoring up free trade deals in Vietnam, Malaysia and Cambodia. In all three South East Asian countries he was warmly greeted as a dear friend. Of the three, Vietnam is the hardest hit with a 43 per cent tax on its exports to the US.
Trump’s racist slurs against all things Chinese were compounded during the trade war when he threatened to delist Hong Kong and mainland stocks from all US exchanges – the New York Stock Exchange, Nasdaq and NYSE American. It is estimated there are 286 mainland and Hong Kong stocks with a market capitalization of US$1.1 trillion listed in the US.
And again, Trump has miscalculated his “punishment.” All companies delisted in the US will simply come to Hong Kong as their secondary and dual primary listing to raise funds and boost our Initial Public Offering (IPO) market.
Hong Kong’s financial secretary, Paul Chan Mo Po, is bullish about the outcome of the war, with Hong Kong becoming stronger as a leading fundraising hub and with enhanced trade ties with the Asia-Pacific and Middle East regions.
But Trump is not stopping there and he’s trying every possible means to curtail China’s position on the world stage. After taking over control of the Panama Canal to tax mainland and Hong Kong ships passing through the waterway, he now plans to tax every ship made in China, regardless of its registration, when they visit US ports.
The actions by Trump have done more harm to himself than to the countries he targeted. In the eyes of world leaders, he cannot be trusted and trading with him in the future will be for essentials only. The harm he has done to his country will take years to repair, and those who voted for him will surely be more prudent when the next elections come about. He has failed miserably with his campaign policy to “Make America Great Again.” He has done exactly the opposite.
Mark Pinkstone
** The blog article is the sole responsibility of the author and does not represent the position of our company. **
The United States hierarchy is downright racist! How dare vice-president JD Vance call the Chinese people “peasants” in such a derogatory tone?
The arrogance of Vance emerged when he started accusing Haitian refugees of stealing and eating pets in Springfield in September last year. This was widely disputed. Then, he was involved in a very public slinging match with Ukraine president Volodymyr Zelensky in the White House in front of the world’s media on March 1. He demanded that Zelensky should be thankful for the help the US has given Ukraine. Zelensky said he had, many times.
The Vance outburst against the Chinese erupted during a Fox & Friends TV interview when he was speaking in support of Trump’s tariff measures. Vance said, "We borrow money from the Chinese peasants to buy things those Chinese peasants manufacture.”
How rude and disrespectful he is of the US’s largest trading partner. Although married to an Indian woman, his racism is reflected through his arrogance. Vance and his cronies in the White House are politicians, not bureaucrats. They go for sound bites and media exposure to boost their image.
He is an embarrassment to the American public, with practically all mainstream media denouncing his comments. He is, after all, the Vice President of the United States of America, a position that commands respect.
His comments are reverberating around the world and illustrate just how arrogant US officials, from the president down, are. This is how they teach their followers to disrespect their foreign neighbors.
There are about 48 million Chinese residing in the US, a country already shrouded in racial discrimination. Comments of degradation from Vance will not help social discord within the country, and only an apology from Vance or the president can help alleviate the fear of abuse.
The popular US news website BuzzFeed published a report titled "People are calling out JD Vance for his offensive comment about the US borrowing money from 'Chinese peasants,' and it's shocking even for him," stating in a now-viral clip that Vance discussed the Trump administration's foreign trade policies with China by directly insulting Chinese people.
The report commented, "If there's one thing Vice President JD Vance is going to do, it's to embarrass Americans everywhere."
Fox News reported that when asked about Vance’s comments on Tuesday, Chinese Foreign Ministry spokesperson Lin Jian said, "To hear words that lack knowledge and respect like those uttered by this vice president is both surprising and kind of lamentable.”
Lin said Vance’s comments produced reactions from the public in China, who were outraged by Vance's actions, and added that Vance’s statements obviously had a certain dose of hatred and arrogance, according to South Africa’s Financial World. In addition to China, many countries around the world are disappointed by the behavior of the US vice president, said the paper.
It added that most of the Chinese population emphasizes that Vance should be banned from visiting the country. “After such statements, it is certain that the US vice president is an undesirable figure among the Chinese population. Whether he will retract such statements or explain what he meant remains to be seen.”
The Chinese people are a hard-working lot and have been recognized worldwide for their ability to produce first-class goods and services at a reasonable price. It is difficult for the West to understand the Chinese work culture, which is steeped in tradition and innovation. The work-life balance varies, but dedication is common. Harmony and teamwork are prized, with a deep respect for authority. Building relationships (Guanxi) is crucial for success, and diligence is a hallmark.
This is something that Vance and his cronies fail to understand. They are not peasants!
Vance’s outburst came when trying, unsuccessfully, to explain Trump’s international tariff penalties, which in China’s case can reach 104 percent on all China goods imported into the US.
China’s total exports last year reached US$3.575 trillion worth of goods around the world. Some 14.7 percent of that went to the US ($524.9 billion), and 8.1 percent went to Hong Kong (second place) with a value of $291.4 billion. China’s imports from the US last year had dropped to $143.54 billion.
