Friday, December 2, 2016

Chinese Quote Sun Tzu, Is Trump Listening?

By: Subhadeep Bhattacharjee

Sun Tzu the famed Chinese General had stated “The supreme art of war is to subdue the enemy without fighting.” For years this has been China’s strategy in dealing with the United States as it aims to topple Uncle Sam as the global leader in economic and military might.

The aggressive trade and diplomatic stance of the Chinese in the last three decades had paid them well, allowing them to make major dents in U.S. economy and slowly locking up its manufacturing industry. The bilateral trade in 2015 stood at little over 600 billion dollars with 367 billion dollars in favour of China is a testament to this success.

The surprise victory of Republican Donald Trump in one of the most anticipated US Presidential Elections has had alarm bells ringing in China. Even before the November 8 shock had sunk in the President elect dropped a bombshell by declaring that he would withdraw from Trans-Pacific Partnership on first day in office. Although China, the second largest economy in the world barring the European Union won’t be directly affected by this decision there are fears that the maverick Republican President-elect make declare a major trade war with the country.

As a part of his campaign he had covertly and overtly (more overly in real terms) promised to payback the Chinese whose currency devaluation has become a major cause of concern across the globe. His popularity among in the White community was a direct result of his attack on the Chinese and other countries that significantly export to the United States resulting in major loss of domestic manufacturing jobs.  

There are rumours in Beijing and Washington that Trump could impose an absurd 45% levy in tariffs and in such a scenario the Chinese could see their exports to United States cut to half and this could bring down the country’s GDP by as much as 2%. A rather realizable 10% levy would also hurt the Chinese exporters significantly and bringing down exports by as much as 15-17%. The Chinese aren’t likely to take this lying down and the multi-billion dollar American enterprises that have heavily invested in China are likely to bear the brunt for such a decision back home.  
 
Analysts are however sceptical about Trump embarking on any major economic war given the collateral damage it would have on his country’s own economy. Three weeks since his victory Trump the real-estate mogul known to carry his foot in his mouth has flip-flopped on several of his campaign promises. They believe that Trump is aware about the retaliation that is expected to come from Xi Jinping and this would remain another of his unfulfilled election rhetoric. There are growing fears in the US that such a trade war would further push trade dependant nations in China’s basket and may signal the downfall of the United States as the most dominant power in the world.  


According to Sun Tzu’s text “You can kill 1,000 enemies, but you would also lose 800 soldiers” Is Trump willing to bear such a high cost to stand by his election rhetoric. The Chinese don’t quite believe so.  

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