They say no battle plan survives first contact with the enemy. But what if the genius way around that is to just … have no plan? President Donald Trump may soon find out in his brewing cold war with China.
On trade, he has launched tariffs and threatened more, while also calling for China to stop spying, technology theft and other corporate misdeeds. But the tariffs are dumb weapons that hurt US companies and growth too; and cracking down on corporate espionage is harder than it looks, writes Noah Smith. A much more effective and straightforward approach, Noah writes, would be to convince China to stop keeping its currency so cheap to boost its export. This would make global trade more fair and curb the trade deficit Trump hates so much.
Last week, Vice President Mike Pence laid out Trump’s broader complaints about China, on everything from military aggression to human-rights abuses. Most of this was legitimate and welcome, writes Hal Brands – but Trump doesn’t seem to be really doing much about it. Nor is it clear what his goal is: A new cold war? A quick-and-dirty deal that maintains the status quo, a la Nafta? “The US is finally starting to say the right things when it comes to the China challenge,” Hal writes. “But it is still struggling to do what is necessary to succeed.”
On the plus side for Trump, China’s response hasn’t exactly been brilliant. It has pulled old policy levers, such as cutting bank reserve ratios, to stoke its production-centered economic engine. In the process, it has abandoned efforts to modernize its economy. Mohamed El-Erian writes this will only keep China on a collision course with the US.
(Bloomberg)
