China Has Offered Trump $1.2 Trillion: What Will It Get in Return?
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China Has Offered Trump $1.2 Trillion: What Will It Get in Return?


AUSTIN, TEXAS – February 26, 2019

The American business channel CNBC, referring its own “well-informed sources,” said on Friday that the Trump administration had succeeded in making a serious breakthrough in negotiations with representatives of China.

According to the channel, the Chinese delegation allegedly offered the US a $1.2 trillion concession: China was supposedly ready to increase its purchases of American goods this much in order to achieve the end of the trade war that Washington unleashed against Beijing.

Reports about this deal of the century instantly flew all over the world, giving another reason to say that Trump and his administration had scored a victory in the economic confrontation with China. However, even if the information from CNBC is completely true, such a conclusion would be, to put it mildly, premature.

American propaganda, once again celebrated the victory of democracy over totalitarian China, but the key words in the CNBC messages are not about the $1.2 trillion, but that negotiations on structural and deeply fundamental issues are at a stage in which the topics for discussion and future arrangements are only about to be determined. The latter, most likely, will never be concluded.

Only topics for discussion and format of future agreements are about to be determined. The latter, most likely, will never be concluded.

It should be noted that Trump’s administration and the media supporting him, starting approximately from August of last year, periodically inform the American and world audience that Trump has achieved some outstanding results in his economic vendetta against China.

It is significant that each such planting of evidence eventually turns into nothing. To illustrate this thesis, it is enough to recall the results of personal negotiations between Trump and XI, which were also presented to the world as a kind of American breakthrough and triumph, but in fact, turned out to be a bit showy.

By the way, if the information from CNBC’s sources is true and negotiations on key issues for the US, such as intellectual property, access to Chinese markets, cyber espionage, and forcing US companies to transfer technologies, are really conducted in the format of work on a kind of “memorandums of understanding” then this is in fact a recognition of the significant victory of the Chinese side. Of course, one cannot say that an intergovernmental memorandum of understanding will be a meaningless piece of paper, but in fact, it is not even an “intergovernmental agreement” and definitely is not a serious “international agreement.” Donald Trump needs 100% effect, a full-fledged Chinese capitulation, and now it turns out that the result of the negotiations in the best case for the US will be a set of “declarations of intent,” and this is primarily a recognition of two extremely bitter facts for Trump.

First, the US President understands that he will not be able to drag a full-fledged treaty with China through the House and Senate because the Democrats will disrupt its ratification no matter how much it benefits the US. More precisely, the more profitable the treaty is for Washington, the more efforts Democrats will spend to disrupt its signing or ratification to prevent Trump from achieving a historic victory and strengthen his chances in the next election.

The second fact is that the Chinese delegation is aware of this situation (probably, it was informed by numerous contacts in the Democratic Party itself) and therefore the Chinese are now proposing to the US President to negotiate a “dummy” – documents that do not require ratification by Congress or the Senate but which can be used in the election campaign. A $1.2 trillion" bribe " in this sense is a good PR trick to sweeten any sour feelings. It is possible that this figure will even be more important and more pleasant for voters than reasoning about complex economic and diplomatic matters.

The figure of $1.2 trillion only seems huge and significant at first glance. As commentators rightly point out, in the American segment of social networks, this amount is approximately equal to the size of the Chinese portfolio of US government bonds. This means that in the most extreme case, China can simply exchange $1.2 trillion in US government debt for $1.2 trillion in real American goods, and such an exchange can hardly be considered a kind of Chinese defeat. Not surprisingly, the Chinese delegation told the Chinese state-owned Global Times that "China and the United States have made significant progress on specific issues since their last round of economic and trade negotiations at the highest level in Washington."

From the point of view of Chinese diplomats, the negotiations seem to be quite positive. If Trump agrees to at least temporarily leave China alone in exchange for meaningless memorandums of intent and a one-time purchase of American goods, then this will be an American concession.

However, the most likely intermediate result of the US-China trade war will not be a surrender of one of the parties, but a kind of truce, which will be declared a victory both in Washington and in Beijing.

Trump may well expect that the signed memorandum of understanding plus a one-time purchase of goods from American farmers and producers will greatly help in the elections, and only during the second term will he try to get back up on China and force it not to make just concessions, but namely to surrender, including the repatriation to the US of production and the unconditional opening of the Chinese market for American exports.

If the American side really chooses this scenario, then we can expect numerous triumphant reports from the US pro-government media and US diplomats. The decisive battle for world domination between the US and China will be held after 2020, and it’s not a fact that this battle will be fought by economic methods. Judging by the latest actions of the American side (including withdrawal from the INF Treaty and attempts to reduce its dependence on Chinese suppliers for the US military-industrial complex), the final argument in the confrontation with China may well be a military force.

Author: USA Really