Pause in the Sino/US Storm
by Stephen Lendman (stephenlendman.org - Home - Stephen Lendman)
Longstanding US plans call for transforming China, Russia, and all other nations it doesn't control into vassal states, gaining control over their resources and populations.
That's what US imperialism is all about, normal relations with these nations not sought or attainable because of its aim to rule the world unchallenged.
Sino/US relations are adversarial. G20 talks between Xi Jinping and Trump accomplished nothing toward changing things. A trade war pause alone was agreed on to continue talks.
Major bilateral differences remain unresolved after over a year of failure because of unacceptable US demands.
Hostile US tariffs remain in place on $250 billion worth of Chinese imports, additional duties on $325 billion more up to 25% is threatened if Beijing doesn't yield to unacceptable US demands, what's highly unlikely.
The agendas of both countries are world's apart. Chances are more likely for bilateral relations to worsen ahead than improve — no matter how many more rounds of talks are held.
Major military and other non-economic issues remain unresolved, including matters relating to Taiwan and Beijing's activities in the South China Sea, its part of the world the US seeks control over.
According to China's Commerce Ministry last week, unresolved differences with the US could lead to "the largest trade war in economic history."
This worst-case scenario, short of war, could prevent enterprises of both countries from conducting normal business in both countries.
Tariffs imposed on Chinese goods are largely taxes on consumers, paid for by importing firms, either absorbing the cost or passing it on to end-users — in whole or in part.
According to the Tax Policy Center, "(i)n the short run, higher prices for imported goods will reduce consumption of those goods."
"But in the longer term, the decline in competition from foreign products makes domestic firms less efficient."
"And less competition will result in higher prices, not just for those goods subject to the tariff but for competing goods that are not—such as those made domestically."
A fundamental pricing principle taught MBA students is that companies charge what the market will bear for their goods and services. The more competition, the greater the restraint on price-gouging.
Yet US and other Western monopolies and oligopolies keep prices high because ruling authorities in these countries do little or nothing to restrain them.
Concentrated wealth at the expense of the public welfare reflects the disturbing reality in the West and elsewhere, the vast majority of people everywhere exploited, not equitably served by their ruling authorities.
The interests of consolidated corporate power are served by politicians, especially in the US, political figures dependent on large-scale campaign funding from business, elected officials serving their interests in office.
The longer Sino/US trade war continues, especially if escalated, the greater the economic threat to both countries and the world community.
US trade war with China is largely economic, financial, and technology war, currency war always possible, reducing the yuan's value a way for Beijing to offset US tariffs.
If things spin out of control because US policies remain unbending, the risk of things turning hot is an ominous possibility.
Major unresolved structural differences define Sino/US relations, what won't likely be resolved in the short or intermediate term, if ever.
Whether short-term compromise can be reached on some issues, leaving major ones to be dealt with later on, is unknown.
Trump's stubbornness to get his way and China's refusal to sacrifice its core interests makes it uncertain whether agreement between both sides is possible.
Likely the best to hope for is compromise on some issues, discussion on major ones suspended for a later time.
They're not going away so will surely resurface if put aside temporarily, perhaps until after the 2020 election, Trump resuming them if he gets another term.
A pause in the storm doesn't resolve it, more brinksmanship likely ahead with lots of unknowns that might happen.
A June-released Beijing white paper on "China's Position on the China-US Economic and Trade Consultations" denounced Trump regime unilateral, protectionist policies, along with unacceptably lifting the bar in trade talks.
On the sidelines of the G20 Osaka summit, Trump and China's Xi Jinping agreed to continue trade talks, no further US tariffs imposed on Chinese imports for now, later very much possible if impasse on major issues continues.
For now, things are again in the eye of a protracted storm, talks resumed. It's similar to the outcome of discussions between both leaders late last year at the Buenos Aires, Argentina G20 summit.
Both countries are miles apart on major bilateral issues. Things are never simple on matters involving US aims to dominate other countries.
That's the crux of Sino/US irreconcilable differences, no evidence suggesting discussions will be smoother ahead than over the past year.
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