Negotiations between the USA and China on trade and investments have become prominent on the economic agenda of the world and beyond that, have a large influence on the prospect of conflict and (in)stability in the most important region of the world.
For the near future, US policy will be to squeeze China tech corporations, to make operations so uncomfortable for them they will have to leave the US, as well as US allied economies. Trump will continue to collect tariffs from China imports, which he sees as a plus, while increasing his public threats that China not to allow its currency, the Yuan-Renminbi, to devalue which would negate the hikes in US tariffs. Meanwhile, domestically Trump policy ‘spin’ will try to publicly make it appear (to Trump’s farm base and US business in general) that the US and China are working in good faith toward an agreement.
Longer term, into 2020, if the US neocons retain control of negotiations, they will continue to insist the US retain tariffs, insist on China capitulating on the tech issue, and continue to go after China tech companies in the US and worldwide. That means there will be no agreement even in 2020. China will not sit idle. It has $1.3 trillion of US assets, mostly Treasuries, held by its central bank. It could slow its purchase of new US government debt. That would drive up long-term interest rates in the US and the value of the US dollar still more, further slowing global growth and negatively impacting emerging market economies and US multinational profits repatriation from those economies. The 2020s decade will prove a highly dangerous period. The global capitalist economy is slowing, as it does periodically. A new restructuring of the US and global capitalist economy is on the agenda next decade, as it was in the late 1970s, in the mid-1940s, and on the eve of 1914. Trump trade and other policies should be understood as a broad reordering of US economic and political policies in order to ensure the continuation of US global economic and political-military hegemony for the coming decade. Nextgen technology development is at the core of that restructuring and restoration of US hegemony.
Jack Rasmus : World Financial Review : 03-08-2019.
Dr. Jack Rasmus is author of The Scourge of Neoliberalism: US Policy from Reagan to Trump, Clarity Press, September 2019.
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