APD Review | First step to avoid trade war: convince Trump of the calamity

By APD writer Roy Lu

Since Donald Trump became the president of the most powerful country in the world, gatherings of world leaders, such as the latest G20 Summit in Buenos Aires over this weekend, have unfortunately become a tug of war between Trump’s populist “America First” agenda and other leaders’ advocacy for multilateralism and free trade.

In the era of Trump presidency, the success of a summit has lied in whether leaders could at least agree on a communiqué on crucial issues facing humanity, such as the global warming and support for multilateral institutions. Given Trump and his underlings’ ruthless resistance, it is a formidable goal which so far has not been achieved. But still, we should stay optimistic that reason will eventually come to this U.S. administration.

This year’s G20 Summit is crucial since the world is on the verge of a trade war between the United States and other economies. Therefore, it could be regarded as “Mission Achieved” if the world leaders could at leastconvince Trump to drop the illusion that “trade wars are good and easy to win.”

Even before he commenced on his trip to Argentina for the G20 Summit, Trump had launched into tirades against China and the European Union on trade. He had condescendingly made clear that the other sides should unconditionally submit to Washington’s demands on trade and traditionally when his coercion fails to yield results, he piles up more stakes.

For a U.S. leader preoccupied with trade deficit, the rationale for the trade assault is that since Washington has trade deficit with “virtually every country it does business with,” cutting trade ties would be beneficial to the United States. The Trump fantasy goes against common sense and it is the world leaders’ responsibility to pull him out of the ridiculousness.

Fortunately for the leaders who advocate for free trade, the majority of U.S. business circles have lent their support for free trade.

Days before Trump was leaving for the G20 Summit in Argentina, as many as 150 U.S. business groups, representing “every part of the U.S. economy,” sent a petition to the White House, urging the Trump administration to settle the ongoing trade dispute with China, the second largest economy after the United States.

“Tariffs are leading to fewer opportunities for America's farmers and ranchers to compete in overseas markets and less income to provide for their families,” the coalition said. “For U.S. companies importing manufacturing inputs or finished products, these significant costs will result in higher prices, fewer jobs, slower wage growth and reduced investment.”

For Trump and his underlings, it is time for them to face the ugly truth that the key to achieve their slogan of “Make America Great Again” lies in the deep engagement in world trade. Trade war never benefits either side.

For us, we are counting on world leaders to deliver facts, figures and truth on the benefits of free trade to Trump. Here is some suggestion: to take U.S. trade with China as an example, China bought 165 billion U.S. dollars in goods and services from America in 2015, and the figure is expected to further grow, according to a recent report by Oxford Economics.

Furthermore, the Chinese companies directly employ over 140,000 Americans, often in areas which are left behind by globalization, or in other words where Trump supporters live, according to a recent report by the National Committee on U.S.- China Relations and the Rhodium Group.

According to official announcements, Chinese President Xi Jinping will give an important speech to world leaders on multilateralism and free trade and hold a meeting with his U.S. counterpart Trump during the G20 Summit.

Let us hope that reason will defeat stubbornness and ignorance this time.

Roy Lu, researcher of APD Institute. Lu covered the 2016 U.S. presidential election till the very end of Donald Trump’s upset victory. He is a political contributor to APD.

（ASIA PACIFIC DAILY）