[By Guancha Observer Network, Wang Yi] No matter how much Trump's confidants defend their president, the fact that Trump "blinked" first in the tariff deadlock has become a "joke" for the whole world.

In an article published on April 24 by the Financial Times senior trade journalist Alan Betty pointed out that Trump had taken over a hand of increasingly weak cards in global trade博弈 and played them extremely poorly. The U.S. no longer possessed the aid, technology, and market access needed to dominate global trade as it once did, and Trump's erratic behavior was causing the U.S. to lose the possibility of regaining control of global trade at an even faster pace.

"Clearly, Trump's strategy is terrible: he doesn't even know what he wants," but Betty also admitted that a less incompetent American government would have been in the same predicament under similar circumstances.

After World War II, the U.S. provided large-scale economic aid and technical support through the Marshall Plan to help rebuild Europe and establish an Atlanticist political-economic system in Western Europe. The U.S. not only gained access to the growing consumer markets in Western Europe but also bound allies to its geopolitical orbit, having a profound impact on the subsequent global political and economic landscape.

The article points out that for decades, capital flows, advanced technologies, and access to its vast consumer market were the U.S.'s chips to reshape the global trade system. However, now these chips are relatively weaker compared to China. Former President Obama's claim that the U.S. was an "indispensable nation" is becoming increasingly inaccurate in the fields of trade and technology.

In terms of the scale of aid provided, the U.S. has lost its advantage. The U.S. aid budget has been significantly reduced, and the so-called Department of Government Efficiency has effectively shut down the remaining aid budget of the U.S. Agency for International Development (USAID).

Regarding this matter, NBC lamented that abruptly stopping USAID's aid amounted to "opening a window for China and Russia," allowing competitors like China and Russia to fill the void, and the U.S. would lose its position on the world stage.

In terms of the development of advanced technologies, the U.S. seems to be losing ground to China. Betty analyzed that the U.S. government had made every effort to deprive China of the opportunity to obtain advanced technologies, such as semiconductors. However, the U.S. not only failed to invest enough to match the investments of China's state and private sectors but also sent wrong signals to the U.S. industry, resulting in the U.S. falling far behind China in many green technologies.

The article gives examples: if a country wants to adopt solar energy, wind power, or replace fuel vehicles with electric vehicles, it usually needs to obtain equipment from China.

Solar supply chain (deep blue), battery supply chain (sky blue), electric vehicles (light blue), and other green technology net trade volume chart of the EU, the U.S., India, and China. FT chart.

According to estimates by Rhodium Group, a U.S.-based consulting firm, in 2023, China accounted for 53.5% of global solar cell and component exports, while in 2013, this proportion was 35.5%. In 2023, China's share of lithium-ion battery and semi-finished electric vehicle exports also exceeded 50%.

In contrast, Betty criticized that the U.S. wants to build its own battery, electric vehicle, and solar manufacturing systems to meet domestic demand through subsidies and protective tariffs on imported products. However, this will not work.

Just this week, the results of an investigation initiated during the Biden administration into solar products from Southeast Asian countries came out. After a year-long investigation, the U.S. government accused Chinese photovoltaic companies of "dumping" solar products into the U.S. through factories in Malaysia, Cambodia, Thailand, and Vietnam, deciding to impose "anti-subsidy duties" on these countries. Among them, the tariff imposed on solar products from Cambodia reached an absurd 3521%.

The article argues that this may be politically necessary to maintain the vitality of the U.S. solar industry, but it will never make the U.S. a competitive exporter of solar products.

Analysts point out that although the Biden administration provided more than $10 billion in subsidy support to the U.S. photovoltaic industry through the Inflation Reduction Act (IRA), Trump's tariffs on imported solar products have become a major "hidden concern" for the U.S. solar industry. The direct consequence of this measure is that the import cost of solar modules will significantly increase.

Similar things also happened in the field of electric vehicles. Betty pointed out that the EU is trying to integrate China's cutting-edge production technology into its market, but the U.S. domestic auto industry, influenced by protectionism, tends to manufacture large, high-consumption pickup trucks that other countries do not want, leading to the creation of an electric vehicle industry with low technological content, high prices, and unable to compete with overseas rivals.

Betty conceded that one area where the U.S. still holds an advantage is its domestic market. OECD data from 2019 showed that the U.S. accounted for 15.4% of the global total of goods imports and 17.5% of final demand, far higher than China's 9.7% and the EU's 11.3%.

The article stated that for a long time, the U.S. had used market access as a lure to tempt trading partners to reduce tariffs and adopt U.S. intellectual property rules.

This strategy last succeeded in the Trans-Pacific Partnership (TPP) signed in 2016, which aimed to encircle China with U.S.-oriented economies. However, in 2017, the Trump administration announced its complete withdrawal from TPP in its first term. After the leader left, the remaining countries, led by Japan, transformed TPP into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), deleting intellectual property-related clauses added under U.S. insistence.

Betty pointed out that since then, the prospect of using the U.S. market as a bargaining chip has become increasingly dim, not only because the U.S.'s share of the global economy has been declining for a long time but also because of the negative impacts of U.S. trade agreements. The Biden administration tried to restore U.S. influence in the Asia-Pacific region with the Indo-Pacific Economic Framework (IPEF), but this only caused confusion. IPEF attempted to persuade partner countries to adopt U.S. labor standards and other rules without offering export markets in return.

Currently, Trump uses high tariffs as a threat to demand compromises from trading partners to gain market access. Betty criticized that this was "all stick and no carrot," and seemingly, the credibility of Trump's permanent high-tariff threat depended on fluctuations in financial markets, which also greatly undermined his credibility to maintain low tariffs after reaching an agreement.

As the U.S. claimed to be the "top priority" negotiator, the first round of tariff negotiations between Japan and the U.S. last week made little progress. Prime Minister Ishiba's statement that "although time is pressing, we believe rushing will not solve problems" was interpreted by outsiders as Japan's attempt to use the "delay tactic" to respond to U.S. pressure.

The article emphasized that Trump found that the U.S. was no longer indispensable, but his erratic behavior made the situation worse, accelerating the decline of the possibility of the U.S. regaining control of global trade.

This article is an exclusive contribution from the Observer Network and cannot be reproduced without permission.

Original source: https://www.toutiao.com/article/7497083353292603958/

Disclaimer: This article solely represents the author's views. You can express your attitude by clicking the "like/dislike" buttons below.