The collision test of 2 economical powers. Trump “plays coward” with Xi

Only China remained in the battlefield with the United States. However, not due to the fact that Donald Trump broke the opposition of the remainder of the planet with his customs offensive – he called it the “day of liberation” of America – but due to the fact that after a week of this offensive he gave up. At least for 90 days, due to the fact that that's how long she's gonna be suspended.

Officially (this is Trump administration narrative): due to the fact that it has been a spectacular successAnd all over the world, you've been knocking at the White home doors and windows to get along with the American president.

Off the record: as Trump's political pain threshold is only a week; just as much was going on in the U.S. stock market, an avalanche of criticism from the media, increasingly serious social unrest among Americans (also Trump's electoral base), the force of the large American business on the White House, as well as a spectrum of retaliation from all major global player who neither thought to pay tribute to the flaxy developer from fresh York City.

While the remainder of the planet has gained any time to prepare for the inactive possible economical confrontation with America, China has only "received" a leap in customs barriers. Currently, it is 145% for Chinese imported products.

However, the mediate State did not put its ears behind it and replied precisely the same thing to Trump – the duties on US products imported into China presently amount to 125%. On the occasion of China, among others, they banned the distribution of American films on their territory, and besides ordered their airline companies to halt receiving Boeing aircraft and halt buying parts and equipment for already utilized machines from American companies.

A week of American liberation. And pause

– I have very good news. It's liberation day. We've been waiting a long time. April 2, 2025 will be remembered as the day the American manufacture was revived – praised journalists with his customs policy Donald Trump. He stressed that "this is 1 of the most crucial days in American history."

"Liberation Day" meant a 10% work imposed by default on all US trading partners. The higher rates Trump and his people have prepared for those countries that they consider to be “the top criminals” in (arguably unfair) commercial practices with America.

Most heavy affected by common duties, countries received rates between 31 (Switzerland) and 49% (Cambodia). Among the most deprived were the countries celebrated for producing goods for Western companies, including Bangladesh, Thailand and Taiwan.

However, Trump did not spare even America's closest allies. On South Korea, he imposed duties of 25, and on Japan, of 24 percent, Australia and the United Kingdom – after 10 percent, the European Union's leader placed a 20% duty. However, Russia, Belarus and North Korea were missing in the list of “punished”. Officially: due to besides small or no trade with the United States. However, American partners did not convince specified translations.

This is simply a revolution. This is simply a policy pursued and aimed at the demolition of today's rules of play and the creation of new

After a week Trump suspended his decision for 90 days – against all states but China. Officially: due to the fact that the fresh strategy has been a large success, and many states have asked Washington to renegotiate trade agreements. The period of 3 months is to be a time devoted to these talks. Unofficially: due to the fact that economical and political pressures began to cut off Trump's administration of oxygen.

"He threw Excel in the garbage". What's in Trump's head?

– The surprise for Trump's administration may be that the planet did not get frightened – the motives for Trump's decision to suspend the customs offensive are analysed by Dr. Tomasz Pawłuszko.

– The stock markets reacted nervously, bringing dense losses. After a fewer days, Trump had to back out. Of course, it looked terrible. Not only did it turn out that he was just blackmailing half the planet politically, it has led to major economical losses. I'm certain it won't bring him allies. – considers an American and global safety analyst from the University of Opole.

Our interlocutor besides points out the issue left out in the public debate about American duties. That is, that behind this kind of economical defender historically almost always protected economically weaker countries alternatively than stronger ones. – Britain or the United States started promoting free trade only erstwhile they became leaders in leading industries. They had key technologies, a inexpensive product and a marine fleet that protected their interests,” says Dr. Pawłuszko.

The expert emphasizes that competition almost always found a way to get through protectionism. Time and timing for counterattacks played a key role. That's the situation today. To the United States, rivals who developed fresh technologies have protected their markets, and are now economically much stronger than the erstwhile russian Union. They are besides good in business and negotiations – measure the expert. And he adds: – The paradox is that America has led to this.

Trump’s motivation and surroundings were late discussed by the chief economist and deputy editor-in-chief of “Business Puls”. – This is not a policy based on data, calculations and estimates, nor a whim. This is simply a revolution. This is simply a policy aimed at the demolition of the rules of the game present and the creation of fresh ones that will be developed in any time – diagnosed Ignacy Morawski.

The Interia talker stressed that Trump is guided by the “the logic of the revolution”. “When rules are broken to build fresh ones, you don’t think about what’s in Excel. We live in a political culture based on calculating virtually everything. Meanwhile, Trump threw Excel in the garbage, he and his people do not think at all in these categories – explained the economist.

The fall of the American Dream. On your own request

The paradox of the current situation is that it is mostly the United States itself that has "grown" a Chinese problem. The past decades have been a decline in the competitiveness of the American economy and a decision of production to Asia (especially China) to reduce labour costs. As a result, the American manufacture melted in its eyes, the mediate class shrunk heavily, and workers began to control from manufacture to service. These were little paid than industry, but the influx of cheaper products from abroad (effect of output!) not only equalized the difference and protected Americans from drastic deterioration of the standard of living, but made them able to afford more than before.

Although exports were decreasing and imports and public finance deficits were growing, America felt safe due to the fact that it inactive held hands on the global trade order it created – She controlled the banking system, had the largest and strongest army, and yet the American dollar was the reserve currency of the world. erstwhile the “cold war” was won, there was no end to the euphoria.

The clash between America and China is simply a "playing coward" – it is about who will be the first to fear and withdraw. It is very hard to measure who will come out of this victorious, due to the fact that in fact it comes down to the question: which economy is stronger and which will rapidly respond negatively to this confrontation

It was only Bill Clinton who faced the problems in the mid-1990s. He strangled inflation, rebuilt the financial surplus and strengthened the competitiveness of the American economy. However, Clinton did something that had a profound effect on America's economical future. – He abolished Glass-Steagal's pre-war bill, thus creating immense financial conglomerates in the United States. American capital continued to rage around the world, pumping money and production to China, which joined the planet Trade Organization, besides through the protection of America – reminds Dr. Tomasz Pawłuszko from the University of Opole.

– It was the Americans who financed Chinese development, and the Chinese bought American bonds in return. America engaged in successive wars, and China grew – The American continues. He adds: "The effects did not take long. For the first 10 years since the US invasion of Iraq, the American economy has grown by respective percent and the Chinese by respective hundred.

The effects were severe due to the fact that yet Before the coronavirus pandemic, the only dynamic and developing branches of the American manufacture were armaments and mining. “The shale gas and oil accounted for 2 thirds of the investment in the American manufacture for the full erstwhile decade,” says Dr. Pawłuszko.

However, another industries were not so fortunate. They fell or disappeared completely. Historically, the legendary rust belt, which had an extended manufacture of dense states of Michigan, Indiana, Ohio and Pennsylvania, was erstwhile a symbol of the American economical power, and the gigantic collapse of Detroit, formerly the capital of the world's automotive industry, was and is an embarrassing reminder to America that the times of glory ended mostly at their own request. Adding to this a powerful 2008 financial crisis, the effects of which have been felt over the years, and an expanding number of frustrated voters, created a perfect subsoil for Donald Trump's MEGA policy ("Make America large Again", or "Make America large Again").

– Trump promised to return to Reagan's “old good times” and voters believed him. But the situation is worse than before. Today, manufacture is liable for only about 11% of employment in the United States, while in another prosperous countries it is closer to 20%, and in China almost 30%," says Dr. Pawłuszko.

Increase in the power of the Chinese dragon

Our interviewer adds that the Chinese took advantage of the chance they received from the Americans. Over the years, they copied innovation and organizational models there, developed their own companies and built positions in subsequent branches of the economy. However, they sold the manufactured products as their own and at much lower prices than the Western countries, headed by the United States.

The Americans hoped that the Chinese, like another countries, would join their planet trade system. Of course, on the terms set by Washington. – However, the Chinese had their own plan – This is Dr. Tomasz Pawłuszko from the University of Opole. It indicates that Beijing has studied the past of Western powers and is doing his best not to duplicate their mistakes.

– They build their power not through conquests (as Europeans erstwhile did) and not through alliances (like Americans), but through investments, technologies and infrastructure links. They start banks, make value chains, build infrastructure and buy companies around the world. They are the main trading partner for most countries. At the same time, they advance their own institutions – says the Interia speaker.

Finally, he emphasizes: "You can see the strategical patience that the West lacks today.

Therefore, in fresh years the situation has begun to slip distant from the hands of the Americans, but the business there did not respond, due to the fact that access to the gigantic and ever-growing Chinese marketplace was highly profitable for him. – America's predominance began to melt. In 2016, China's economy overtook American size, and at the beginning of the pandemic, in 2020, the Americans realized that they were dependent on China in 830 product categories. The Chinese stopped utilizing American apps and quit European cars. They produced their own – Dr. Pawłuszko analyses.

A surprise to the Trump administration may be the fact that the planet did not get scared

Therefore, during Donald Trump's first word in the White House, ideas of the alleged decoupling, namely the separation of the United States from China, appeared. Economist analyses said it would take about 8 years, but it would besides be highly cost-effective. Both America and China would gotta find fresh trading partners to fill the gap on the another side.

– Today, due to Trump America, it won't be any easier," says Dr. Pavluszko. In his opinion, in the White home they are aware of this, which is why the Trump administration does not want to go to a full trade war with the European Union as well. The point is that the EU itself, which has a very tight trade relation with the mediate State, has no interest in ‘toughing’ from China. It is not without reason that Brussels has set itself to ‘de-risking’, which is to limit Chinese influence in the European economy and to monitor closely the activities of its companies in the common market.

Nor does Dr. Marcin Przychodniak, an analyst for China at the Polish Institute of global Affairs (PISM) number for a large turn in EU-Chinese relations. – All problems and economic, and related safety (i.e. China's support to Russia) inactive exist. They are not gone and will not disappear, so it is hard to anticipate the EU to abruptly turn a blind eye – This is Interia. He adds: "The warming of China's trade relations with the European Union is not an option.

Impact test and China's biggest weakness

The Americans in the ringing with the Chinese are left alone. They effectively took care of this through a confrontational policy of the fresh administration. The European Union, at least for now, will stand by and monitor the situation. “America’s clash with China is “playing coward” – it is about who will be the first to fear and withdraw. It is very hard to measure who will come out of this victorious, due to the fact that in fact it boils down to the question: which economy is stronger and which will respond negatively more rapidly to this confrontation – says Dr. Marcin Przychodniak from PISM.

Washington's main assets are the immense impact on global financial markets – they control the global banking system, and their dollar is simply a universal settlement currency – inexpensive energy and inactive the most powerful army on the planet allowing intervention anywhere in the planet and control of global trade. Additionally, advanced innovation of the economy, good demography, excellent universities (and their smooth cooperation with business) and many companies with global reach. Minus: immense debt, rapidly increasing inflation, dependence on imports, powerfully conflicted political scene and society.

China's advantage is that as a single state it is the largest marketplace in the world. Moreover, due to the authoritarian system, they have much greater political coherence and resilience to possible social discontent. They besides have a vibrant manufacture and an increasingly innovative economy. Moreover, they control 90% of the world's resources of uncommon earth metals, which are the foundation of all advanced technologies. This impact is so large that the mediate State itself could halt the production of electronics across the planet.

China's biggest weakness is... time. Beijing is presently not ready either economically or militarily to face the United States fully. economical dependence on exports carries a large hazard in the event of a trade war with Americans. The stimulation of interior consumption as the second engine of the economy does not go as Chinese decision-makers would have wished. The problem of infrastructure investments and the construction industry, on which China has based its economical growth for years, is already well known and diagnosed. In addition, there are fatal demography, mediocre currency, rising debt and deficiency of credibility among key abroad partners.

America's predominance began to melt. In 2016, China's economy overtook American size, and at the beginning of the pandemic, in 2020, Americans realized that they were dependent on China in 830 product categories

The key to defeating China and hope for balance in Asia?

“The Chinese, possibly even more than Europeans, have a problem with Trump. They don't truly know how to deal with him. No 1 knows precisely what his real goal is – says Dr. Przychodniak. Beijing was hoping to usage Trump's transactionism. He hoped to be able to play regional American interests, Elon Musk's business interests, but he did not," adds the analyst.

As he claims, In the event of a long-term economical war, however, China has a better chance of final success. MThey have greater area for manoeuvre erstwhile redistributing their exports, as well as do not gotta worry as much as Trump about social sentiments and force from national business. On the another hand, the American president has on the horizon the alleged midterms, which is highly crucial for the Republican organization to elect legislature in the mediate of his term. “If Trump lost the majority in Congress, it would be a strong blow and a large political problem for him,” says Dr. Przychodnik.

However, Americans are not doomed to fail. Dr Tomasz Pawłuszko points out that The key to defeating China may be their main rival in the region and India's emerging economical power. – They are the hope of the United States and Europe for a balance in Asia, due to the fact that it is they who control the key to trade in the Indian Ocean – the expert believes.

Luke Rogoish