Latest news with #Western-oriented
Express Tribune
31-07-2025
- Business
- Express Tribune
Provinces must be consulted on oil deals, says Raza Rabbani
Listen to article Former Senate chairman Mian Raza Rabbani has criticised the federal government for failing to maintain transparency in finalising an oil exploration deal with the United States, which was publicly revealed through a tweet by the US president on Wednesday night. In a press statement issued on Thursday, Rabbani said it was 'a sad day for transparency and good governance' when the people of Pakistan had to learn of such an agreement through social media rather than formal government channels. He reminded the federal government that under Article 172(3) of the Constitution of 1973, the provinces have a 50% ownership stake in all lands, minerals, and resources of value. 'Such deals and projects fall under constitutional provisions and cannot be finalised unilaterally,' he said. Calling for greater institutional oversight, Rabbani demanded that the government take Parliament into confidence over what he termed 'Western-oriented initiatives.' He further urged the federal authorities to convene a meeting of the Council of Common Interests (CCI) to engage all provinces in discussions about the oil deal and similar future projects. US struck a trade deal with Pakistan, US President Donald Trump said on Wednesday, hours after announcing 25% tariffs on imports from India in addition to unspecified "penalty" over New Delhi's purchases of Russian weapons and energy. Read: Pakistan, US seal trade deal Trump said that the deal with Pakistan included joint development of the country's "massive" oil reserves. The announcement came as talks continue with other nations, including South Korea, ahead of his self-imposed August 1 deadline. "We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves," Trump wrote in post on his social media platform of 'Truth Social'. Donald J. Trump Truth Social 07.30.25 03:44 AM EST — Fan Donald J. Trump Posts From Truth Social (@TrumpDailyPosts) July 30, 2025 "We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they'll be selling Oil to India someday!" the US president wrote in his post, without giving additional details of the deal. Prime Minister Shehbaz Sharif on Thursday expressed his gratitude to US President Donald Trump for his role in finalising a 'historic' trade agreement between Pakistan and the United States. 'I wish to convey my profound thanks to President Trump for his leadership role in the finalization of the historic US-Pakistan trade agreement, successfully concluded by our two sides in Washington last night,' the prime minister wrote on his X timeline. I wish to convey my profound thanks to President Trump @realDonaldTrump for his leadership role in finalization of the historic US-Pakistan trade agreement, successfully concluded by our two sides in Washington, last night. This landmark deal will enhance our growing cooperation… — Shehbaz Sharif (@CMShehbaz) July 31, 2025 He said that the 'landmark' deal would enhance the growing bilateral cooperation to expand the frontiers of an enduring partnership in the days to come.
Arab News
19-04-2025
- Politics
- Arab News
1981 - The founding of the GCC
RIYADH: When, in January 1968, Britain announced its intention to leave the Gulf by 1971, it sent shock waves throughout the region. The search intensified for a new and more reliable security architecture. It took several steps, ending with the formation of the Gulf Cooperation Council on May 25, 1981. During the period between Britain's announcement of 1968 and its actual withdrawal from the Gulf on Dec. 16, 1971, there was first an attempt to form a nine-member union between Bahrain and Qatar and the seven Trucial States, all of which were under various protection treaties with Britain. When that attempt failed, efforts were directed at forming a union among the Trucial States. The UAE was announced on Dec. 2, 1971, initially of six emirates, Abu Dhabi, Dubai, Fujairah, Sharjah and Umm Al-Quwain. Ras Al-Khaimah, the seventh emirate, joined the following February. After that first step, the search continued for a larger framework to include the rest of the Gulf states, including Saudi Arabia, Bahrain, Qatar and Kuwait. Sheikh Jaber Al-Sabah of Kuwait championed the renewed efforts. In May 1976, he formally called for the establishment of a Gulf union during a visit to the UAE, whose president, Sheikh Zayed, strongly supported the idea. In November 1976, in Muscat, a security framework that would also have included Iraq and Iran was discussed but abandoned because of fundamental differences over the concept, especially between Iran and Iraq. Efforts to establish the GCC continued without Iran or Iraq. Saddam Hussein of Iraq tried to hinder those efforts unless Iraq was included, which was difficult to do given its war with Iran at the time. The Soviet Union and China were also opposed, for fear that the new organization would be Western-oriented. The security vacuum was part of the rationale for advancing the founding of the GCC to close ranks among Gulf states. Besides Britain's withdrawal, the revolution in Iran in February 1979 produced a clerical regime explicitly seeking to export its brand of radical politics to its neighbors and undermine their security. It helped in establishing, funding and training militant groups for that purpose in Bahrain and Saudi Arabia, in addition to spreading its influence in Iraq, Syria and Lebanon. In October 1979, in a meeting held in Taif, Saudi Arabia, the general framework of the GCC was agreed, but differences remained on some issues. Some favored focusing on security and military integration — even a formal military alliance — while others wanted the new organization to emphasize soft power and economic integration. In 1980, Saudi Arabian Foreign Minister Prince Saud Al-Faisal was given the task of bringing the different views together and leading the exercise of drafting the charter, supported by Kuwaiti Foreign Minister Sheikh Sabah (who later became the Emir of Kuwait from 2006 until his death in 2020), Bahraini Foreign Minister Sheikh Mohammed bin Mubarak, and others. A flurry of meetings of ministers and experts took place in the early months of 1981, in Kuwait, Riyadh and Muscat, to finalize the draft, which was finally adopted by the heads of state on May 25, 1981, in Abu Dhabi, in the first formal meeting of the new organization. The GCC Charter was a compromise between the different formulations discussed for the new group. It did not privilege a particular emphasis, but called for 'coordination and integration between member states in all fields, leading to their unity.' The reference to unity as a goal was important to guide the work of the organization. The reference to 'all fields' gave the impetus for the formation of institutional structures dedicated to different branches of integration, including political, economic and security. The charter of the Cooperation Council for the Arab States of the Gulf is signed by the heads of state of the UAE, Saudi Arabia, Bahrain, Oman, Qatar and Kuwait at a conference in Abu Dhabi. GCC leaders sign a unified economic agreement during their second summit, in Riyadh. Peninsula Shield, a joint GCC defense force, is established, with its headquarters at Hafr Al-Baatin in northeastern Saudi Arabia. A GCC customs union is created. Introduction of the GCC common market. Saudi Arabia, the UAE and Bahrain withdraw their ambassadors from Doha, accusing Qatar of failing to abide by an agreement not to support 'anyone threatening the security and stability of the GCC, whether as groups or individuals.' The GCC announces during its annual meeting the formation of a regional police force, based in Abu Dhabi. King Salman's vision for strengthening joint action by GCC members is announced in Riyadh during the organization's 36th summit. GCC announces activation of Unified Military Command HQ in Riyadh as a concrete step toward enhanced military coordination. Today, the GCC Secretariat employs about 1,500 civilian staff, from the six member states, and hosts the main policymaking divisions of the organization. Its work is aided by about 30 specialized entities that deal with specific issues. There are economic organizations such as standards, patents, intellectual property and investment, as well as internal security organizations. Military organs employ additional uniformed staff. Since its inception in May 1981, the GCC has undoubtedly accomplished a lot of what it set out to do more than four decades ago. Economic tools, such as the free trade area, which was set up in 1983, the customs union (2003) and the common market (2008), have created great synergies between member states that have led to improved efficiencies and wide and dynamic markets. However, attempts at reaching a full economic union and a unified currency have yet to succeed. By economic and social indicators, the GCC states have been a brilliant success, in part because their membership in the GCC provided economies of scale, a deeper market and wider reach. In 1981, the combined gross domestic product of the six member states was just shy of $200 billion, and most GCC states were performing poorly in economic and social indicators. At that time, most GCC states had just shaken off British rule, which had lasted about 200 years, impoverished their economies, and ossified their political and social development. As a result, these states were underperforming economically and needed the solidarity and support of other GCC members. Today, the combined GCC GDP is about $2.4 trillion — a 12-fold increase over 1981. At the same time, per capita income has skyrocketed in some member states. And while in 1981 several GCC member states were low-ranking in most human-development indices, such as the level of education, health conditions, life expectancy and the gender gap, today GCC countries lead on those indices. Illiteracy has been fully eradicated, free health services are top notch and GCC universities sit high on international rankings. Other significant achievements were also made, including the establishment of the unified military command in November 2018, building on decades of close cooperation between land, air and naval forces, including through the Peninsula Shield based in northern Saudi Arabia since 1982, and the GCC Naval Operations Coordination Center in Bahrain. The GCC Police was established in 2012 and has been based in the UAE since. It coordinates the work of internal security forces at the operational level, in addition to the Riyadh-based Security Affairs division. However, a lot remains to be done to reach the goal of 'unity' cited in the charter. The emerging, and almost existential, challenges that the region faces require new ways of doing things. Business as usual is no longer adequate. Member states have, over the years, proposed closer cooperation to meet those challenges. In 2012, the late King Abdullah of Saudi Arabia proposed transition from the 'cooperation' phase to a full-fledged union. In 2015, King Salman proposed a comprehensive vision aimed at upgrading cooperation mechanisms in economic, social, political, internal security and defense areas. His vision was adopted by other leaders and has become the GCC's road map since then. While work is in progress to implement the remaining elements in this vision, Saudi Arabia has announced that it intends to submit a phase two of this vision. One area that has been referred to in summit communiques repeatedly is the reform of GCC's institutions, including the GCC Secretariat and the 30-odd other entities in its orbit. It has been recognized that governance needs to be overhauled to provide more transparency, accountability and efficiency. King Salman's vision for the GCC, which was adopted by all leaders in December 2015, started that process but the pace of change has not been fast enough.
Egypt Independent
09-04-2025
- Business
- Egypt Independent
Trump's tariff onslaught against China launches a battle the US may not be able to win
CNN — President Donald Trump just ignited a direct showdown with the one nation that might be able to beat the United States in a trade war. Trump's escalation against China — which is about to face tariffs of at least 104 percent on goods entering the US — is the most serious pivot yet in his global tariff onslaught and has the most potential to inflict severe blowback on American citizens in soaring prices. The confrontation follows years of US attempts to address perceived trade abuses by China. It's also the culmination of a decade or more of worsening relations prompted by an aggressive and nationalistic shift by a Pacific competitor turned hostile superpower that now seems itching to challenge US might. And it's a dark landmark in a diplomatic relationship that will help define the 21st century and a breakdown for a long US project to prevent tensions erupting into a full-on trade war — or potentially much worse — between two giants. The US has been trying to manage China's emergence for more than 50 years — since President Richard Nixon's pioneering visit to Chairman Mao Zedong to 'open' an isolated and impoverished nation and to drive a wedge between its leaders and their communist brethren in the Soviet Union. It's been nearly a quarter-century since another milestone: when the US ushered China into the World Trade Organization in hopes of promoting democratic change and locking it into a rules-based, Western-oriented economic system. The ultimate failure of those well-intentioned efforts is being laid bare in Trump's second term. The president rose to power on a populist wave that was partly a reaction to globalization that exported US industrial jobs to China and left blight in its wake. Chinese communist leader Chairman Mao Zedong welcomes US President Richard Nixon at his house in Beijing in 1972. AFP/Getty Images Prospects for a deal with China seem grim Trump claims that scores of nations are eager to make trade deals to defray painful US tariffs. But China isn't joining their ranks. Beijing rebuffed Trump's warning not to retaliate against an earlier 34 percent tariff on top of a first round of duties — warning that it was ready to fight to 'the end.' The US leader, caught up in a fast-spiraling clash with President Xi Jinping, then had to preserve his credibility by making good on his threat to impose a gargantuan import tax from goods from the world's second-largest economy on Wednesday. 'Countries like China who have chosen to retaliate and try to double down on their mistreatment of American workers are making a mistake,' White House press secretary Karoline Leavitt said Tuesday. 'President Trump has a spine of steel, and he will not break, and America will not break under his leadership.' The vast stock of personal and political capital Trump has now invested in the faceoff with Xi makes this the most serious lurch of a volatile week since the US president announced his 'Liberation Day' tariffs in the White House Rose Garden. China is showing every sign that it thinks it can outlast Trump in their clash, for which it has been preparing for years. And it's not clear Trump and his top officials are fully prepared for the extent of China's resilience or the pain it can impose on American consumers. If the US president assumed that what he almost daily hails as his 'great relationship' with Xi would yield a quick Chinese climbdown, he's wrong. The prospect of a trade agreement with Beijing similar to the one in the first Trump term, which largely fell apart during the pandemic, seems distant. Chinese President Xi Jinping arrives to the second plenary session of the National People's Congress, or NPC, at the Great Hall of the People on March 8, 2025, in Beijing, are peaking over trade with hubris on both sides Trump's claims that the US has been 'raped' and 'pillaged' by trade partners are hyperbolic. But his grievances about Beijing's behavior have been shared by multiple presidents. Tensions often flare over import dumping, market access for US firms, intellectual property theft, currency manipulation and industrial espionage. Previous White Houses pursued targeted enforcement and other penalties to try to reshape China's behavior. Years of acrimony in the relationship have fueled the shared bipartisan doctrine in Washington that Beijing is the preeminent military and economic threat to US power. But Trump's aggression is unparalleled. He believes he has a unique and perhaps final opportunity to transform the US dynamic with what the US Trade Representative's office describes as the world's largest trading nation. 'We have one shot at this,' Trump told reporters in the Oval Office on Monday. But his method is impulsive and indiscriminate; it lacks a clear strategy. It also shows little respect for Chinese dignity and power — a recurring theme in the administration's dealings with other countries. Vice President JD Vance, for instance, last week mocked China in criticizing past US trading policy. 'We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture,' he said. 'That is not a recipe for economic prosperity. It's not a recipe for low prices, and it's not a recipe for good jobs in the United States of America,' Vance told 'Fox & Friends.' The vice president's contemptuous remarks ignored the transformation in China's economy. It is now a global leader in innovation on artificial intelligence, electric vehicles, energy production and in many other areas. Beijing on Tuesday condemned Vance's words as 'astonishing,' 'lamentable,' 'ignorant' and 'disrespectful.' There are high-stakes political, global, economic reasons why Xi can't bend. The ruthless Chinese leader presents himself as a historic catalyst of Chinese civilization's rightful return to power and prestige. A capitulation to a tough-talking American president would therefore be unthinkable. Showing weakness to the United States would also undercut China's own power and would be seen as a loss of face — especially within Asia. China's rhetoric, meanwhile, is peppered with assumptions that the US is trying to devastate its economy and political system. Liu Pengyu, spokesman for China's embassy in Washington, for instance, condemned US tariffs on Tuesday as 'abuse' and as an infringement of China's 'legitimate rights.' In Beijing, as in Washington, hubris is stoking the antagonism. China's official media bristles with certainty that America is an empire in decline. Far from being a show of strength, Trump's second presidency and the political chaos he incites are seen as symptoms of weakness. Trump's histrionics and attacks on US allies, including in Southeast Asia, also play into China's argument that the United States is not a reliable partner, and that China's brand of capitalism twinned with political control is a better model. China's confidence ahead of what could be a dragged-out trade battle with the United States is also rooted in Xi's reorientation and modernizing of the Chinese economy. 'I think if you are Xi Jinping right now, you're thinking, 'Well, hey, on the metrics that I care about — technological resilience and self-reliance, we are doing ok, these tariffs may not immediately impact us,' said Lily McElwee, adjunct fellow at the Center for Strategic and International Studies. Xi may also believe that beyond China's core strength, it has 'retaliatory tools that (it) can impose that will be costly to the United States as well,' said McElwee, who is also president and CEO of the Phoenix Committee on Foreign Relations. As a real authoritarian leader, Xi, unlike Trump, has no worries about the impact of a trade war on looming elections — such as the congressional midterms next year. And while public opinion is still important in China, Xi may reason he can afford to inflict more pain on the Chinese than Trump can on Americans. If US inflation soars and sets off a recession, it may be the Americans who sue for trade peace on conditions favorable to Beijing. Trucks arrive at the container terminal in Nanjing in east China's Jiangsu province on April 8, 2025. FeatureChina/AP Americans are about to feel real economic pain Pain is coming for American consumers. China has been the top foreign supplier of goods to the US, accounting for up to 16 percent of total imports in recent years, according to the USTR. It dominates the market in smartphones, computers and toys — likely to be hit by massive price hikes that take them out of reach of many Americans when the new tariffs come into force. Taken together with Biden administration tariffs on China, which expanded on Trump first-term duties, China now faces an effective average tariff rate of 125 percent. Beijing can also inflict other penalties on the United States, such as halting export licenses for rare earth minerals that are vital to the US tech industry — one reason why Trump may have been so obsessed in finding alternative sources of supply in places like Ukraine and Greenland. After seeing the severe inflationary impact in the US of supply chain crunches during the pandemic, Chinese leaders could choose to impose new artificial curbs on the flow of goods to the US. American law and commercial firms might be restricted from operating in China. And Beijing could jolt the US agricultural heartland by limiting the import of soy beans and Sorghum. Each of these steps would hurt Chinese as well as Americans — but they'd demonstrate Xi's power of retaliation. Small businesses are also vulnerable. While giants like Apple can seek alternative manufacturing bases — in India, say — US firms that rely on goods and components from China will be left hugely exposed. 'If you are a small business, particularly on the import side or the input side, there's going to be pain,' said Alex Jacquez, a former special assistant for Economic Development and Industrial Strategy to President Joe Biden. Broader economic consequences will follow. 'You're looking at a drag on GDP that is going to be a drag on the labor market. You are looking at inflationary pressure,' Jacquez said. 'One of the concerns here is there is not rational thought or direction to the strategy.'
Yahoo
09-04-2025
- Business
- Yahoo
Trump's tariff onslaught against China launches a battle the US may not be able to win
President Donald Trump just ignited a direct showdown with the one nation that might be able to beat the United States in a trade war. Trump's escalation against China — which is about to face tariffs of at least 104% on goods entering the US — is the most serious pivot yet in his global tariff onslaught and has the most potential to inflict severe blowback on American citizens in soaring prices. The confrontation follows years of US attempts to address perceived trade abuses by China. It's also the culmination of a decade or more of worsening relations prompted by an aggressive and nationalistic shift by a Pacific competitor turned hostile superpower that now seems itching to challenge US might. And it's a dark landmark in a diplomatic relationship that will help define the 21st century and a breakdown for a long US project to prevent tensions erupting into a full-on trade war — or potentially much worse — between two giants. The US has been trying to manage China's emergence for more than 50 years — since President Richard Nixon's pioneering visit to Chairman Mao Zedong to 'open' an isolated and impoverished nation and to drive a wedge between its leaders and their communist brethren in the Soviet Union. It's been nearly a quarter-century since another milestone: when the US ushered China into the World Trade Organization in hopes of promoting democratic change and locking it into a rules-based, Western-oriented economic system. The ultimate failure of those well-intentioned efforts is being laid bare in Trump's second term. The president rose to power on a populist wave that was partly a reaction to globalization that exported US industrial jobs to China and left blight in its wake. Trump claims that scores of nations are eager to make trade deals to defray painful US tariffs. But China isn't joining their ranks. Beijing rebuffed Trump's warning not to retaliate against an earlier 34% tariff on top of a first round of duties — warning that it was ready to fight to 'the end.' The US leader, caught up in a fast-spiraling clash with President Xi Jinping, then had to preserve his credibility by making good on his threat to impose a gargantuan import tax from goods from the world's second-largest economy on Wednesday. 'Countries like China who have chosen to retaliate and try to double down on their mistreatment of American workers are making a mistake,' White House press secretary Karoline Leavitt said Tuesday. 'President Trump has a spine of steel, and he will not break, and America will not break under his leadership.' The vast stock of personal and political capital Trump has now invested in the faceoff with Xi makes this the most serious lurch of a volatile week since the US president announced his 'Liberation Day' tariffs in the White House Rose Garden. China is showing every sign that it thinks it can outlast Trump in their clash, for which it has been preparing for years. And it's not clear Trump and his top officials are fully prepared for the extent of China's resilience or the pain it can impose on American consumers. If the US president assumed that what he almost daily hails as his 'great relationship' with Xi would yield a quick Chinese climbdown, he's wrong. The prospect of a trade agreement with Beijing similar to the one in the first Trump term, which largely fell apart during the pandemic, seems distant. Trump's claims that the US has been 'raped' and 'pillaged' by trade partners are hyperbolic. But his grievances about Beijing's behavior have been shared by multiple presidents. Tensions often flare over import dumping, market access for US firms, intellectual property theft, currency manipulation and industrial espionage. Previous White Houses pursued targeted enforcement and other penalties to try to reshape China's behavior. Years of acrimony in the relationship have fueled the shared bipartisan doctrine in Washington that Beijing is the preeminent military and economic threat to US power. But Trump's aggression is unparalleled. He believes he has a unique and perhaps final opportunity to transform the US dynamic with what the US Trade Representative's office describes as the world's largest trading nation. 'We have one shot at this,' Trump told reporters in the Oval Office on Monday. But his method is impulsive and indiscriminate; it lacks a clear strategy. It also shows little respect for Chinese dignity and power — a recurring theme in the administration's dealings with other countries. Vice President JD Vance, for instance, last week mocked China in criticizing past US trading policy. 'We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture,' he said. 'That is not a recipe for economic prosperity. It's not a recipe for low prices, and it's not a recipe for good jobs in the United States of America,' Vance told 'Fox & Friends.' The vice president's contemptuous remarks ignored the transformation in China's economy. It is now a global leader in innovation on artificial intelligence, electric vehicles, energy production and in many other areas. Beijing on Tuesday condemned Vance's words as 'astonishing,' 'lamentable,' 'ignorant' and 'disrespectful.' There are high-stakes political, global, economic reasons why Xi can't bend. The ruthless Chinese leader presents himself as a historic catalyst of Chinese civilization's rightful return to power and prestige. A capitulation to a tough-talking American president would therefore be unthinkable. Showing weakness to the United States would also undercut China's own power and would be seen as a loss of face — especially within Asia. China's rhetoric, meanwhile, is peppered with assumptions that the US is trying to devastate its economy and political system. Liu Pengyu, spokesman for China's embassy in Washington, for instance, condemned US tariffs on Tuesday as 'abuse' and as an infringement of China's 'legitimate rights.' In Beijing, as in Washington, hubris is stoking the antagonism. China's official media bristles with certainty that America is an empire in decline. Far from being a show of strength, Trump's second presidency and the political chaos he incites are seen as symptoms of weakness. Trump's histrionics and attacks on US allies, including in Southeast Asia, also play into China's argument that the United States is not a reliable partner, and that China's brand of capitalism twinned with political control is a better model. China's confidence ahead of what could be a dragged-out trade battle with the United States is also rooted in Xi's reorientation and modernizing of the Chinese economy. 'I think if you are Xi Jinping right now, you're thinking, 'Well, hey, on the metrics that I care about — technological resilience and self-reliance, we are doing ok, these tariffs may not immediately impact us,' said Lily McElwee, adjunct fellow at the Center for Strategic and International Studies. Xi may also believe that beyond China's core strength, it has 'retaliatory tools that (it) can impose that will be costly to the United States as well,' said McElwee, who is also president and CEO of the Phoenix Committee on Foreign Relations. As a real authoritarian leader, Xi, unlike Trump, has no worries about the impact of a trade war on looming elections — such as the congressional midterms next year. And while public opinion is still important in China, Xi may reason he can afford to inflict more pain on the Chinese than Trump can on Americans. If US inflation soars and sets off a recession, it may be the Americans who sue for trade peace on conditions favorable to Beijing. Pain is coming for American consumers. China has been the top foreign supplier of goods to the US, accounting for up to 16% of total imports in recent years, according to the USTR. It dominates the market in smartphones, computers and toys — likely to be hit by massive price hikes that take them out of reach of many Americans when the new tariffs come into force. Taken together with Biden administration tariffs on China, which expanded on Trump first-term duties, China now faces an effective average tariff rate of 125%. Beijing can also inflict other penalties on the United States, such as halting export licenses for rare earth minerals that are vital to the US tech industry — one reason why Trump may have been so obsessed in finding alternative sources of supply in places like Ukraine and Greenland. After seeing the severe inflationary impact in the US of supply chain crunches during the pandemic, Chinese leaders could choose to impose new artificial curbs on the flow of goods to the US. American law and commercial firms might be restricted from operating in China. And Beijing could jolt the US agricultural heartland by limiting the import of soy beans and Sorghum. Each of these steps would hurt Chinese as well as Americans — but they'd demonstrate Xi's power of retaliation. Small businesses are also vulnerable. While giants like Apple can seek alternative manufacturing bases — in India, say — US firms that rely on goods and components from China will be left hugely exposed. 'If you are a small business, particularly on the import side or the input side, there's going to be pain,' said Alex Jacquez, a former special assistant for Economic Development and Industrial Strategy to President Joe Biden. Broader economic consequences will follow. 'You're looking at a drag on GDP that is going to be a drag on the labor market. You are looking at inflationary pressure,' Jacquez said. 'One of the concerns here is there is not rational thought or direction to the strategy.'
CNN
09-04-2025
- Business
- CNN
Analysis: Trump's tariff onslaught against China launches a battle the US may not be able to win
President Donald Trump just ignited a direct showdown with the one nation that might be able to beat the United States in a trade war. Trump's escalation against China — which is about to face tariffs of at least 104% on goods entering the US — is the most serious pivot yet in his global tariff onslaught and has the most potential to inflict severe blowback on American citizens in soaring prices. The confrontation follows years of US attempts to address perceived trade abuses by China. It's also the culmination of a decade or more of worsening relations prompted by an aggressive and nationalistic shift by a Pacific competitor turned hostile superpower that now seems itching to challenge US might. And it's a dark landmark in a diplomatic relationship that will help define the 21st century and a breakdown for a long US project to prevent tensions erupting into a full-on trade war — or potentially much worse — between two giants. The US has been trying to manage China's emergence for more than 50 years — since President Richard Nixon's pioneering visit to Chairman Mao Zedong to 'open' an isolated and impoverished nation and to drive a wedge between its leaders and their communist brethren in the Soviet Union. It's been nearly a quarter-century since another milestone: when the US ushered China into the World Trade Organization in hopes of promoting democratic change and locking it into a rules-based, Western-oriented economic system. The ultimate failure of those well-intentioned efforts is being laid bare in Trump's second term. The president rose to power on a populist wave that was partly a reaction to globalization that exported US industrial jobs to China and left blight in its wake. Trump claims that scores of nations are eager to make trade deals to defray painful US tariffs. But China isn't joining their ranks. Beijing rebuffed Trump's warning not to retaliate against an earlier 34% tariff on top of a first round of duties — warning that it was ready to fight to 'the end.' The US leader, caught up in a fast-spiraling clash with President Xi Jinping, then had to preserve his credibility by making good on his threat to impose a gargantuan import tax from goods from the world's second-largest economy on Wednesday. 'Countries like China who have chosen to retaliate and try to double down on their mistreatment of American workers are making a mistake,' White House press secretary Karoline Leavitt said Tuesday. 'President Trump has a spine of steel, and he will not break, and America will not break under his leadership.' The vast stock of personal and political capital Trump has now invested in the faceoff with Xi makes this the most serious lurch of a volatile week since the US president announced his 'Liberation Day' tariffs in the White House Rose Garden. China is showing every sign that it thinks it can outlast Trump in their clash, for which it has been preparing for years. And it's not clear Trump and his top officials are fully prepared for the extent of China's resilience or the pain it can impose on American consumers. If the US president assumed that what he almost daily hails as his 'great relationship' with Xi would yield a quick Chinese climbdown, he's wrong. The prospect of a trade agreement with Beijing similar to the one in the first Trump term, which largely fell apart during the pandemic, seems distant. Trump's claims that the US has been 'raped' and 'pillaged' by trade partners are hyperbolic. But his grievances about Beijing's behavior have been shared by multiple presidents. Tensions often flare over import dumping, market access for US firms, intellectual property theft, currency manipulation and industrial espionage. Previous White Houses pursued targeted enforcement and other penalties to try to reshape China's behavior. Years of acrimony in the relationship have fueled the shared bipartisan doctrine in Washington that Beijing is the preeminent military and economic threat to US power. But Trump's aggression is unparalleled. He believes he has a unique and perhaps final opportunity to transform the US dynamic with what the US Trade Representative's office describes as the world's largest trading nation. 'We have one shot at this,' Trump told reporters in the Oval Office on Monday. But his method is impulsive and indiscriminate; it lacks a clear strategy. It also shows little respect for Chinese dignity and power — a recurring theme in the administration's dealings with other countries. Vice President JD Vance, for instance, last week mocked China in criticizing past US trading policy. 'We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture,' he said. 'That is not a recipe for economic prosperity. It's not a recipe for low prices, and it's not a recipe for good jobs in the United States of America,' Vance told 'Fox & Friends.' The vice president's contemptuous remarks ignored the transformation in China's economy. It is now a global leader in innovation on artificial intelligence, electric vehicles, energy production and in many other areas. Beijing on Tuesday condemned Vance's words as 'astonishing,' 'lamentable,' 'ignorant' and 'disrespectful.' There are high-stakes political, global, economic reasons why Xi can't bend. The ruthless Chinese leader presents himself as a historic catalyst of Chinese civilization's rightful return to power and prestige. A capitulation to a tough-talking American president would therefore be unthinkable. Showing weakness to the United States would also undercut China's own power and would be seen as a loss of face — especially within Asia. China's rhetoric, meanwhile, is peppered with assumptions that the US is trying to devastate its economy and political system. Liu Pengyu, spokesman for China's embassy in Washington, for instance, condemned US tariffs on Tuesday as 'abuse' and as an infringement of China's 'legitimate rights.' In Beijing, as in Washington, hubris is stoking the antagonism. China's official media bristles with certainty that America is an empire in decline. Far from being a show of strength, Trump's second presidency and the political chaos he incites are seen as symptoms of weakness. Trump's histrionics and attacks on US allies, including in Southeast Asia, also play into China's argument that the United States is not a reliable partner, and that China's brand of capitalism twinned with political control is a better model. China's confidence ahead of what could be a dragged-out trade battle with the United States is also rooted in Xi's reorientation and modernizing of the Chinese economy. 'I think if you are Xi Jinping right now, you're thinking, 'Well, hey, on the metrics that I care about — technological resilience and self-reliance, we are doing ok, these tariffs may not immediately impact us,' said Lily McElwee, adjunct fellow at the Center for Strategic and International Studies. Xi may also believe that beyond China's core strength, it has 'retaliatory tools that (it) can impose that will be costly to the United States as well,' said McElwee, who is also president and CEO of the Phoenix Committee on Foreign Relations. As a real authoritarian leader, Xi, unlike Trump, has no worries about the impact of a trade war on looming elections — such as the congressional midterms next year. And while public opinion is still important in China, Xi may reason he can afford to inflict more pain on the Chinese than Trump can on Americans. If US inflation soars and sets off a recession, it may be the Americans who sue for trade peace on conditions favorable to Beijing. Pain is coming for American consumers. China has been the top foreign supplier of goods to the US, accounting for up to 16% of total imports in recent years, according to the USTR. It dominates the market in smartphones, computers and toys — likely to be hit by massive price hikes that take them out of reach of many Americans when the new tariffs come into force. Taken together with Biden administration tariffs on China, which expanded on Trump first-term duties, China now faces an effective average tariff rate of 125%. Beijing can also inflict other penalties on the United States, such as halting export licenses for rare earth minerals that are vital to the US tech industry — one reason why Trump may have been so obsessed in finding alternative sources of supply in places like Ukraine and Greenland. After seeing the severe inflationary impact in the US of supply chain crunches during the pandemic, Chinese leaders could choose to impose new artificial curbs on the flow of goods to the US. American law and commercial firms might be restricted from operating in China. And Beijing could jolt the US agricultural heartland by limiting the import of soy beans and Sorghum. Each of these steps would hurt Chinese as well as Americans — but they'd demonstrate Xi's power of retaliation. Small businesses are also vulnerable. While giants like Apple can seek alternative manufacturing bases — in India, say — US firms that rely on goods and components from China will be left hugely exposed. 'If you are a small business, particularly on the import side or the input side, there's going to be pain,' said Alex Jacquez, a former special assistant for Economic Development and Industrial Strategy to President Joe Biden. Broader economic consequences will follow. 'You're looking at a drag on GDP that is going to be a drag on the labor market. You are looking at inflationary pressure,' Jacquez said. 'One of the concerns here is there is not rational thought or direction to the strategy.'
