Direct News: Mr. Liu, what are your observations and thoughts on the joint statement issued by China and the US on the 12th regarding their economic and trade talks?
Special Commentator Liu Peace: I noticed that for this joint statement, especially the results of the first phase of the economic and trade negotiations between China and the US, the focus of the attention from the outside world has been on these two words: "win or lose", meaning which side lost or won in this round of competition. However, in my opinion, this perspective is too superficial, even somewhat shallow. I believe that the significance of this joint statement in terms of politics and diplomacy, or more bluntly put in Sino-US relations, far exceeds the gains and losses in the economy.
To understand this, we need to broaden our horizons and look further. As you know, over the past decade, China's main demands in Sino-US relations and the global order have not only been about economic and trade issues but more so about political and diplomatic aspects. Specifically, in Sino-US relations, China's main demand is to build a new type of major-country relationship between China and the US characterized by non-conflict, non-confrontation, mutual respect, and win-win cooperation. Globally, China's main demand is to oppose the unipolar world order dominated by American hegemony and construct a multipolar world order where both China and the US are equal poles. In other words, China's main demands in both Sino-US relations and the global order can be summarized in one word: equality. Clearly, the US is unwilling to give up its dominant hegemonic status and thus refuses to respond to China's demand for constructing a multipolar world order and even more so refuses to respond to China's demand for building a new type of major-country relationship with the US.
Trump's century-long tariff war against 185 economies around the globe has exposed the essence of American hegemony and pushed its hegemonic behavior to an extreme. The main manifestation of this is that I can do as I please, imposing unequal tariffs on you, but you cannot retaliate, nor even complain; you must simply accept it obediently. However, Trump never expected that China would use this tariff battlefield opened by the US to not only strip away America's hegemonic airs but also secure equal status with the US, and even more astonishingly, to have the US acknowledge China's main demands for building a new type of major-country relationship between China and the US and a multipolar world order through a white paper joint statement. This is unprecedented in the past decade or more.
Direct News: So, what do you think are the aspects in this joint statement on Sino-US economic and trade talks that reflect the US responding to China's main demands for building a new type of major-country relationship between China and the US and a multipolar world order?
Special Commentator Liu Peace: I believe there are three levels that can reflect this.
First, it is reflected in the tariff rates after the first round of negotiations between China and the US. If we just look at it in segments or slices, that is, setting aside the high tariffs imposed by Trump during his first term and Biden during the past four years, and just considering the reciprocal tariffs imposed by both sides during Trump's second term, they can be said to have achieved "completely reciprocal tariffs." This includes, first, the US retaining the 10% foundational tariff it imposed on China, while China also retains the 10% foundational tariff it imposed on the US; second, the 20% tariffs that Trump imposed twice on China under the pretext of the fentanyl issue before the tariff war against the entire globe began on April 2 were retained, and similarly, China's retaliatory tariffs of approximately 20% on US products such as crude oil, agricultural machinery, large displacement vehicles, chicken, wheat, etc., were also retained. This treatment was something that even Britain, America's closest ally, did not enjoy. In last week's US-UK trade agreement, the UK reduced its tariff on the US from 5.1% to 1.8%, while the US increased its tariff on the UK from 3.4% to 10%.
Second, we know that American hegemony is not only reflected in substantive inequality but also in dignity inequality, or in the US's domineering and overbearing style, meaning I can bully everyone else in the world, but you cannot fight back, and you cannot even complain. However, during this tariff war, American hegemony faced a historic challenge, or experienced for the first time the treatment of "an eye for an eye, a tooth for a tooth" among the 185 economies globally that suffered from US bullying. Up until now, China has been the first and only country to stand up and impose reciprocal tariffs on the US. Moreover, it is even more surprising that after the final round of negotiations and confrontations, the US actually recognized China's 30% retaliatory tariff on the US, and even acknowledged it in black-and-white in the Sino-US joint statement. In other words, not only did the US accept the reality of being counterattacked by China, but it also admitted that China had the right to counterattack the US. Think carefully, since the US became the king of the world, when has it ever suffered such a loss or endured such humiliation?
Third, at the beginning of this joint statement, it says things like "both China and the US recognize the importance of a sustainable, long-term, mutually beneficial bilateral economic and trade relationship," and both sides agree to "move forward with a spirit of mutual openness, continuous communication, cooperation, and mutual respect." Perhaps some people might think these are just unnecessary polite words, but I want to remind everyone to pay attention to the fact that these sentences are essentially what China has always demanded and emphasized to the US, and they are basically the core spirit of China's proposal for building a new type of major-country relationship between China and the US. This time, they were written into the Sino-US joint statement, which means that China's understanding and demands for Sino-US relations have been completely accepted by the US.
I believe that these three pieces of information all send out the same political signal, namely that the US has no choice but to accept a rising China and the reality of having to treat China as an equal.
Direct News: So, in your view, what are the reasons that forced Trump to make significant compromises in the tariff war with China?
Special Commentator Liu Peace: Actually, since the tariff war began on April 2nd, this is already the third time within just over a month that Trump has blinked in this game of "chicken." The first time was shortly after he announced the imposition of high tariffs on 185 economies worldwide, when he declared that the high tariffs were abolished and only the 10% foundational tariff remained; the second time was just days after announcing that the tariffs on China had reached as high as 145%, when he exempted high tariffs on Chinese imports of electronics such as mobile phones and computers; the third time was this reduction of the high tariffs on China to 30% after the Sino-US negotiations.
I once said that the real reason behind this is not only that Trump's tariff war is essentially a suicidal act, but more importantly, Trump, who acts rashly and roughly, did not anticipate three things: first, he did not expect Wall Street to collectively pressure him, nearly causing a collapse of stocks, the US dollar, and US bonds; second, he did not expect most economies to adopt a "non-confrontational, non-compromising, non-negotiating" three-no policy for soft resistance; third, he did not expect China to rebel. Of course, what scared Trump even more was that next, American voters might rise up, potentially leading to the Republican Party suffering heavy losses in next year's midterm elections.
In this situation, I once predicted that in this Sino-US tariff war, Trump would seek compromise with China sooner rather than later, even before the midterm elections next year. Because by June this year, the lagging effects of the Sino-US tariff war will begin to show, stores in the US will be empty, prices will soar, and particularly, $6 trillion worth of US Treasury bonds will mature in June. Sure enough, just by mid-May, Trump blinked and surrendered early.
Direct News: Then, what do you think will be the future direction of this Sino-US tariff war, which is currently in a temporary ceasefire?
Special Commentator Liu Peace: I believe that Trump's third blink actually means that after just over a month of nonsense, this century-long tariff war initiated by Trump has basically collapsed.
Regarding the future direction of this tariff war, I also have several basic predictions:
First, although Trump has claimed that the high tariffs imposed on other economies worldwide are only temporarily suspended, if the negotiations between the US and these economies do not go smoothly, these high tariffs will still be added. In other words,表面上看来, the big tariff sword of the US still hangs over the heads of major economies around the world. But I want to say that other economies should not be intimidated by Trump's bluffing. This 10% foundational tariff is already the limit that American consumers and the US economy can勉强 endure. In other words, after more than a month of confrontation, we have already tested the bottom line of Trump and the US;
Second, knowing this, we can see that not only is it unlikely that the situation of the Sino-US tariff war will escalate further, meaning Trump will not impose even higher tariffs on China, but overall, the current 30% reciprocal tariffs between China and the US will likely decrease further, possibly eventually dropping to around 10% reciprocal tariffs. Behind this, besides the US being able to endure only up to 10% tariffs, another important reason is that the fentanyl issue is merely an excuse Trump used to provoke the Sino-US trade war. Once China gives Trump a way down, Trump is very likely to take advantage of the situation and cancel the 20% tariffs imposed on China due to the fentanyl issue. In that case, the reciprocal tariffs between both sides will remain at the 10% foundational tariff level.
Author | Liu Peace
Original Article: https://www.toutiao.com/article/7503877098944135695/
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