24 July 2019

Trump needs truce more than Xi to avoid further damage to US economy: Analyst

KONFRONTASI-US President Donald Trump needs a truce more than Chinese President Xi Jinping in order to avoid further damage to American economy, says Dennis Etler, an American political analyst who has a decades-long interest in international affairs.

An economist said on Friday that expect a photo opportunity, a "mock deal," and temporary market relief from the much-touted meeting between U Trump and his Chinese Xi at the G-20 meeting.

"We don't think this deal will be engineering a long-term truce between the two countries," Bo Zhuang, chief economist and director of China researcSaveh at TS Lombard, said of the meeting in Buenos Aires, Argentina next week.

In an interview with Press TV on Saturday, Etler, a former professor of Anthropology at Cabrillo College in Aptos, California, said that “Zhuang’s assessment of the  forthcoming meeting between Chinese President Xi Jinping and US President Donald J Trump is right on the money. Bo, chief economist and director of China research at TS Lombard, says that the meeting will result in a photo opportunity, a ‘mock deal,’ and temporary market relief from the Trump initiated ‘trade war’ with China.”

“Trump and his handlers, who are ideologically driven by an animus toward China, have dug themselves into a hole. Their rosy scenario of China caving into Trump’s tariffs and other economic sanctions has proved to be unwarranted. Whatever damage to the Chinese economy that may result will be minimal. China will be able to weather the storm and find ways to circumvent the effects of the tariffs and other impediments to trade with and investment in the US market by seeking out new markets and expanding trade relations with existing partners,” he stated.

“The US, on the other hand, is beginning to feel the negative effects of the tariffs and restrictions placed on high tech exports to China and Chinese investment in the US. US farmers are seeing their crops rot in the field and the technology sector is beginning to feel the pinch as well. Chinese exports to the US are still increasing and US exports to China are tanking. Other negative consequences to the US economy are also mounting. As a result of these pressures and tensions the US stock market has lost all its 2018 gains and economic benefits that have accrued due to Trump’s tax cuts are being eviscerated by the new tariff regime, which will only get worse if the scheduled increases go ahead as planned. Thus, it is the US more than China that needs a respite from Trump’s ill-conceived ‘trade war,’” he added.

“China for its part wants an end to it as well, as it serves them no useful purpose and only complicates their overall economic planning, creating unnecessary detours. They however can also take advantage of new opportunities to disengage from the fickle US marketplace as well,” the analyst said.

“In the short-term it is the US that needs a truce more than China. Trump, as he has done in the past, will seek a face-saving ‘out’ whereby he can snatch victory from the jaws of defeat. He has already done so with his negotiations during the Korean nuke crisis and the renewal of NAFTA. It should be expected that he will do the same during his meeting with President Xi. Expect Trump to accept China’s mock ‘concessions’ which were already in the pipeline prior to the initiation of the trade war. The US public has no idea about these things and Trump will spin a truce in the trade war as another great victory,” he noted.

“But as Bo Zhuang has indicated, this will only be a truce, not an end to the contention between the two superpowers. In the long-term China’s continued rise is seen as an existential threat by both US political parties and the elites behind them. How to react to that threat however is still unresolved within the US corridors of power,” the scholar concluded.[mr/ptv]

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