The Forever Sino-U.S. Trade War We’re All Stuck In

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The Sino-US trade war, launched in March 2018, has no end in sight. This is because of a broad and deep conflict between universally important values ​​in international trade. Gird yourself for an eternal (another) war.

Since the creation of On Point in January 2017, 13 of the 59 columns have dealt with Sino-U.S. Economic relations. They asked six big questions: if a trade war would be fair, why China’s growth and the Belt and Road initiative are controversial, how India and Taiwan should navigate these relations, how the trade war could be resolved, what lessons from China’s 20 years of global trade membership in the organization is valid for India and the world, and why the currency war matters. Three columns asked whether America and China are in a new cold war, thanks to the conflict between open society and the values ​​of the Chinese Communist Party.

Three events in September 2021 brought these four years of analytical commentary to a crescendo: President Joe Biden’s address to the United Nations General Assembly; a new Australia-UK-US tripartite agreement; and the very first Quad meeting.

Using twice the metaphor of a “inflection point(Where a curvature changes sign, from positive to negative or vice versa), President Biden said at the beginning that we are “at” and at the end “on the way to,” that point. Days earlier, the president had spearheaded the formation of AKUS to provide Australia with nuclear submarines to patrol the Indo-Pacific (independent of China’s Nine-Dash Line) – the first export of this sensitive technology in 60 years. A few days later, he welcomed the Quad. He, Prime Minister Narendra Modi and Prime Ministers Scott Morrison of Australia and Yoshihide Suga of Japan, appreciate the potential synergies between their quartet and the AUKUS trio (plus the benefits for India).

The President (and his speechwriter) were right the first time: we are To the inflection point.

The same goes for this 14th China-related coverage on On Point: that’s changing of the explorations of past trajectories to find out if, why, how and what, To a new slope, a declarative thesis:

Stuck in the Point, traders face endless obstacles, imposed by democracies and / or the CCP, to the flow of goods, services and direct and portfolio investment, and to the protection of intellectual property rights.

Still skeptical? Recall a fourth event in September: the candidacies of China and Taiwan to join the Comprehensive and Progressive Agreement on Trans-Pacific Partnership have divided at least four of the parties: Japan and Mexico (doubtful about China, satisfied with Taiwan) from Malaysia and Singapore (towing line). India cannot ignore this FTA, and perhaps with its deal of $ 7.5 billion in tokens against tariff cuts in Taiwan, is not entirely reluctant.

It is tempting to state, as Biden did, “the the future belongs to those who give their people the opportunity to breathe freely, not to those who seek to suffocate their people with iron authoritarianism. The authoritarians of the world, they seek to proclaim the end of the era of democracy, but they are wrong. But does he have underestimate universality of our collective blocking? The Inflection Point is more than a competition between democratic and authoritarian governance to control the trajectory of tomorrow.

Thus, the confrontation transcends the hackneyed one of civilizations, and rises to the mercantile and financial class interests: whatever the regime of their country of origin, what are importers, exporters and investors? want to support healthy and prosperous trade?

Question:

To understand why we’re stuck in the “Inflection Point = Forever Trade War Point”, consider this geek query: What is common between (1) Lithuanian smartphones, (2) Taiwanese sugar apples, and (3) suspension of release orders?

Reply:

They are proof of what fuels perpetual conflict: the differences between three common core values.

1. What government regulation of “expression” is appropriate?

In his speech to the UN, President Biden spoke of “the need to choose whether new technologies would be used as” a force to empower people or to deepen repression. ” »Lithuania, member of the European Union and of the North Atlantic Treaty Organization, choice.

On September 22, the Lithuanian Defense Ministry urged citizens to throw out Chinese-made smartphones “as quickly as reasonably possible” and avoid buying new ones.

The encrypted telephone data was transferred to a server in Singapore. Huawei’s P40 5G phone was at risk of cybersecurity breach through third-party online stores where some apps were malicious or infected with viruses.

The US President also said: “[w]We must all stand up for the rights of LGBTQI people so that they can live and love openly without fear…. It is not easy under the CCP regime, as “sissy men” know.

Earlier in September, “regulators were explicitly targeting androgynous pop idols and anyone who … does not conform to Chinese gender norms, using a derogatory slogan to warn media companies against men who express a more feminine style.” . For the first time in the government’s official communication, the National Radio and Television Administration of China called them “niangpao“, An insulting and intimidating term directed at gay men (roughly translated as” sissy men “), and told television companies to” strictly control the selection of actors and program guests “and to boycott love stories between homosexual men.

Uyghurs in Xinjiang – to whom Biden referred in his speech – are painfully aware of the CCP’s choice. America, Canada and the Netherlands, as well as many non-governmental organizations, have chronicled their status. Genocide, they conclude.

But giving invaluable value to human dignity, like the president does, is what the CCP says devalues ​​social cohesion. Enter the turmoil, perhaps terrorism. Expression, whether political, sexual or religious, must be monitored to ensure stability, which is a prerequisite for prosperity.

But companies are worried about the staging of goods and services that incorporate creative expression – ideas, some of which are subject to IPRs they wish to enforce, others of which reflect new standards that are charming for some and wicked for others others.

2. What degree of “transparency” is due by a government?

In what could catalyze Taiwan’s first-ever WTO case against China, on September 19, Taiwan threatened legal action when China suspended imports of sugar apples and wax apples from China. island, alleging that they contained the “”minor planococcus”Harmful. Unlike the WTO Agreement on Sanitary and Phytosanitary Measures, Taiwan said China behaved unilaterally without scientific evidence.

Australia knows the lack of transparency in Chinese decision-making which leads to the militarization of trade. He called on China for an open and independent investigation into the origins of Covid-19. China hit Australian barley with punitive tariffs, triggering a WTO lawsuit by Australia. China hit back, hitting Australian wine with more than 200% anti-dumping duties. More: Australia hit back by suing China in June 2021.

President Biden mentioned the value of “transparency” in the context of sustainable development, touting America as “Building Better” against China’s Belt and Road Initiative, but he also proclaimed “the America is back “to” prov[e] that no matter how difficult or complex the problems we are going to face, government by and for the people is always the best way to act for all our people. “

This is not true in the CCP paradigm. Such a government is too slow because it is too messy. Better to act quickly and stealthily to serve the people the Party is supposed to serve.

But companies need to know the rules of the road – transparency – for the good of their operations (which agreements are allowed?), and the safety of their consumers (how and with whom can they deal?).

3. Is “courtesy” inviolable?

This international legal principle means that a sovereign nation voluntarily applies the laws of another sovereign nation, out of mutual respect and deference. President Biden spoke of “work[ing] with partners and allies ”and“ engage[ing] deeply with the rest of the world. Likewise, “mutual understanding and respect” is a favorite aphorism in Chinese international relations rhetoric.

Alas, courtesy is not inviolable. The United States and China have adopted extraterritorial trade-related measures to thwart their respective laws and policies:

The inevitable result is what lawyers call a “conflict of laws” dilemma: to comply with US law is to violate Chinese law, and vice versa, with the risk of fines or imprisonment in the process. both cases. With more offensive rules followed by probable defensive rules, especially given the combative “fact sheet” on US interference in Hong Kong released on September 25 by the Chinese Foreign Ministry, this conflict will not go away.

But businesses matter on the goodwill between nations to respect each other’s rules. Absent from courtesy, they are caught between two fires of extraterritorial clashes between sovereigns.

Tied to the inflection point of an eternal trade war, the following formula works:


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