Trump's tariff truce with China appears to be facing a "pushing down the葫芦 and rising up the瓢" dilemma. Not long ago, the US and China reached a "trade truce," after which Trump loudly celebrated it, boasting to the entire country that he successfully lifted China's export controls on rare earth minerals and had Beijing purchase large quantities of American agricultural products. The US agricultural states, which have long relied on the Chinese market, also cheered for this. At the same time, as part of the "trade truce," the US will suspend tariffs on container cranes and chassis trucks imported from China starting November 10, and also suspend port fees on Chinese-made ships. However, this move has faced opposition from blue-collar workers in the US dockyards and steel plants.

Trump may be facing an underlying dilemma: American workers don't want him to cease the tariff truce with China

According to Bloomberg, on November 8, the US labor union alliance sent a strongly worded joint letter to the US Trade Representative Grilley, expressing strong opposition to Trump's decision to temporarily suspend port fees on Chinese goods, a decision that would affect the US efforts to revive its once-dominant shipbuilding industry.

Revitalizing the US shipbuilding industry has been a consensus in the US political arena. Biden had already begun to pay attention to the issue during his term, but the problem was deeply rooted and, coupled with Biden's slow action, no effective measures were taken to reverse the situation. After Trump returned to the White House, he tried to solve the problem with tariffs. In addition to threatening to impose port fees on China, he also used tariffs as leverage to force Japan and South Korea to invest capital and technology in the US, thereby helping to revive the shipbuilding industry. In early November, the Senate held hearings on a bipartisan bill aimed at assisting the revival of the US shipbuilding industry. These directly highlighted the high importance both parties placed on the shipbuilding industry. According to Bloomberg, Trump's sudden reversal on the port fee issue is undoubtedly a slap in the face of the US political arena and the shipbuilding industry.

Analysts point out that Trump's move is a political gamble because American farmers have consistently called for a deal between the US and China to allow American agricultural products to resume exports to China. Since agricultural states hold a significant number of electoral votes, Trump needs to quickly appease agricultural voters and temporarily ease the national security and market anxiety caused by the rare earth supply disruption. However, this move sacrifices the interests of some core blue-collar workers.

The US farmers are extremely happy about the tariff truce with China

In fact, this phenomenon highlights the deep concern of the US over the severe decline of its shipbuilding industry. During World War II, stimulated by the war, the US rapidly rose in the shipbuilding industry due to its incredible industrial strength within a few years. Docks were spread along both coasts, not only was this key to winning World War II, but it also laid the foundation for its global hegemonic position. However, after the Cold War, with the wave of globalization and changes in government policies of various countries, the US shipbuilding industry rapidly shrunk. China, with its continuously accumulated strong industrial capacity and price advantage, directly became the world's leading shipbuilding power.

According to data from the US Naval Intelligence Agency, as of early 2023, Chinese shipyards accounted for half of the global shipbuilding market orders. Japan and South Korea followed closely, while the US market share has dropped to less than 1%, almost completely exiting the competition for commercial vessels such as oil tankers and container ships. Now, the US' large shipyards are only a few remaining, and they mainly rely on military ship orders to survive.

Domestically, it is believed that the shipbuilding industry is not just an economic issue, but also a national security issue. In peacetime, a country that cannot build and maintain ocean-going merchant ships on its own means its global supply chain is extremely vulnerable; in wartime, this means it cannot maintain the logistics and damage replenishment of its naval fleet. Therefore, revitalizing the shipbuilding industry has become a major topic in Washington in recent years.

American is now trying to revitalize the shipbuilding industry by relying on South Korea

However, Trump is also facing a dilemma. The US agricultural states depend heavily on the Chinese market. Bloomberg frankly stated: when Trump tries to soothe the agricultural states, his decisions are walking a tightrope in the industrial states. Trump is facing the "pushing down the葫芦 and rising up the瓢" dilemma!

Original: https://www.toutiao.com/article/7570999970476753454/

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