This article appeared online at TheNewAmerican.com on Tuesday, December 4, 2018: 

The director of Donald Trump’s Economic Council, Larry Kudlow, expressed optimism that many improvements will be seen in U.S.-Chinese trade relations before the end of the 90-day “truce” announced on Sunday. Said Kudlow, “Those things should kick in soon. We should see palpable change on the Chinese side immediately. I don’t want to be too specific but I think the generic answer is we will see changes very quickly.”

Skeptics were quick to point out that Chinese promises are easily made and just as easily broken, as Chinese hardliner Peter Morici pointed out:

This article was published by The McAlvany Intelligence Advisor on Monday, December 3, 2018:

Following the two-and-a-half-hour dinner meeting with Chinese communist dictator Xi Jinping in Buenos Aires Saturday night, President Donald Trump claimed that he got an “incredible” deal from Xi:

It’s an incredible deal. If it happens it [will go] down as one of the largest deals ever made. What I’ll be doing is holding back on [raising] tariffs. China will be opening up. China will be getting rid of tariffs … China will be buying massive amounts of products from us.

The operative phrase is “If it happens….” The White House gave all the credit to Trump: he squeezed them, he pressed them, they wilted and gave him what he wanted. Talk about spin:

President Trump has agreed that, on January 1, 2019, he will leave the tariffs on $200 billion worth of product [being imported from China] at the 10 percent rate, and not raise it to 25 percent at this time.

 

Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period of time, the parties are unable to reach an agreement, the 10 percent tariffs will be raised to 25 percent.

 

China will agree to purchase a not yet agreed upon, but very substantial amount of agricultural, energy, industrial and other product from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural product from our farmers immediately.

The spin from the Chinese was equally disingenuous. Chinese Foreign Minister Wang Yi and Commerce Vice Minister Wang Shouwen who attended the meeting said that the talks to finalize the details would only focus on removing altogether Trump’s tariffs, without any mention of a 90-day deadline. Nothing was said about China’s predatory behavior in the theft of intellectual property in its quest to become the global leader in digital technology. Nothing was said about it relenting from demanding the blackmail transfer of that technology in exchange for access to the Chinese market by American companies. Nothing was said about Chinese cyberwarfare being waged on America by hundreds of Chinese hackers. Nothing was said about backing off on its subsidizing critical industries like steel and aluminum. And nothing was said about its willingness to forego the manipulation of its currency to gain an advantage over American producers wanting to sell to Chinese consumers.

According to the Chinese, Trump got nuthin’. Peter Morici thinks the Chinese are correct. A hardliner professor of economics from the University of Maryland, Morici said:

President Xi has successfully slow-walked President Trump. The president has fallen into the same trap as Barack Obama, George W. Bush, and even Bill Clinton. He will get more platitudes and promises and very few results.

The evidence? As mentioned above, the press release from China following the meeting said nothing about the 90-day “truce.” March 1 is 90 days from now, just before the Chinese communists get together for their annual “legislative” session to determine national policy and who lives to implement it. A softliner willing to give Trump anything puts not only his career but his life in jeopardy.

Negotiations start next week in Washington. By March 1, if little is accomplished, Trump will likely be bought off once again: more time is needed to “finalize” the details, etc., etc. And Trump will raise the white flag and agree to another delay. And then another, and another.

Xi got what he wanted in Buenos Aires: Trump backed off his threat to raise tariffs further. Trump got a promise from the head of a regime known for not keeping its promises. What kind of a deal is that?

Morici is right. The question is: when March 1 rolls around and the Chinese attempt to stall once again, will Trump have grown a backbone by then, or will they continue to play him for the fool?

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Sources:

The Wall Street Journal: U.S., China Signal Progress on Trade

The Wall Street Journal: G-20 Agrees to Joint Statement, With Compromises

Barron’s: Trump and China Called a Truce in the Trade War. Now What?

NPR.org: Trump Leaves G-20 With China Trade Truce…

CNBC.com: US will hold off on raising China tariffs to 25% as Trump and Xi agree to a 90-day trade truce

APNews.com: US, China put brakes on trade dispute with cease-fire

Background on Professor Peter Morici

This article appeared online at TheNewAmerican.com on Friday, November 30, 2018:

A nonpartisan trade group representing farmers, ranchers, manufacturers, and various labor groups reported on Tuesday that, according to its economic model, Trump’s tariffs on steel “are creating US jobs and stimulating growth,” the opposite of what many mainstream economists predicted.

The Coalition for a Prosperous America (CPA) measured the impact of the steel tariffs on the U.S. economy and found that those “steel tariffs, in combination with other economic policies [implemented by the Trump administration] will drive growth of 2.1 million additional jobs in 2018 … and an additional 1.2 million jobs are expected to be created annually in the years 2019 through 2021.”

Traditional economic models got it wrong, said CPA Research Director Jeff Ferry:

The performance of the US economy since the steel tariff was implemented in March has been outstanding, with over a million more jobs in the US economy today than in March, and GDP growth roughly half a point higher than economists had predicted.

 

Most trade models got this wrong due to mistaken assumptions about how the economy would react to the tariffs. Our improved economic model corrects some key mistakes in standard economic models and incorporates actual economic results rather than assumptions. The results forecast that the steel tariffs, in combination with other economic policies, will create some 2 million jobs this year, with another million more to come next year.

He backed this up with data from the Federal Reserve’s latest industrial production report showing that U.S. manufacturing output was up 2.7 percent year over year, with strong production increases in steel-using industrials such as machinery (6.9 percent growth) and aerospace (4.0 percent growth). In addition, according to CPA’s metal-using members, Trump’s steel tariffs have also triggered new investment in steel production facilities estimated to approach three billion dollars nationally.

In a theoretically free economy, tariffs are a drag, as they serve as a tax on production, raising prices for finished goods and as a result diminishing demand for those goods. In today’s world, things are vastly different. Tariffs can be used not only to protect domestic industries from attack by outside interests inimical to the country’s best interests, they may be (and have been) used to punish foreign competition, to raise government revenue, and to reduce “undesirable” activity (so-called “sin” taxes on cigarettes and liquor, for example).

In today’s world the communist Chinese regime is using every means at its disposal to damage and weaken the United States. As The New American noted on Tuesday:

That’s why the side meeting in Buenos Aires [this weekend] between Trump and Xi is going to be the main event. It will address existential issues for both countries that go far beyond disputes over intellectual property theft, subsidizing critical industries such as steel and aluminum in order to weaken the United States, and China manipulating its currency to its own advantage.

 

China has built its military and economic power on the back of the United States ever since it joined the World Trade Organization in late 2001, and has made clear its plans to become the hegemon in East Asia.

In this real world, President Trump is using tariffs, and the threat of increased tariffs, to force the Chinese communists to change their behavior. If he succeeds, and he is able to strike what he calls “a fair deal … [a] deal [that would force] China to open up their country to competition from the United States,” that would approach a miracle. In the real world, word is getting out that the best Trump is likely to get from the Chinese this weekend is an agreement to hold “serious” talks about acceding to some of the 142 trade demands he has already presented to the Chinese in previous meetings.

In a truly free world, economic tariffs wouldn’t exist (or would be applied at a very low level), reducing the price of goods and services across the globe. That’s Trump’s goal.

That is not the goal of the Chinese communists. Gordon Chang, author and frequent guest on the topic, holds that China doesn’t want to just “dominate in advanced industries,” it wants to dominate the world. In an interview on Breitbart News Tonight in March, he said: “China’s not just content with the world as it is; it actually wants to overthrow the international system.”

That’s one more reason why those job gains in the U.S. steel industry are so important. They might just be needed in the event the Chinese communists fail to change their behavior.