Monday, December 5, 2016

Mad Man Trump Intentionally Provokes China, China Pushes Back Hard

As we now know, when Donald Trump conducted a phone call with the Premier of Taiwan, in contravention of the US-China “one state” policy, he did it intentionally.  He was demonstrating to China that he is willing to take a hard line over trade and the South China Sea.

Never mind that he changed the policy of the current administration -- Trump is serious in taking a more contentious position with China.

Long Live the Victory of the Korean People's Army and the Chinese People's Army!

Trump says that China “takes advantage of us” when it engages in free trade and sells us things at prices so low that we cannot refuse.  He is apparently ready to confront China economically and militarily, no matter the consequences.  This is a dangerous game.

Now China has hit back – hard.

Today, the Chinese renminbi fell by about 10 percent against the dollar, one of the biggest single-day moves since Beijing allowed its money to partially float.  This is a clear, intentional signal on the part of a China that carefully controls the daily changes in its currency exchange rate.

A one-day 10% reduction in the renminbi versus the dollar is huge.

Such a currency move by a major international trading partner and competitor has serious economic consequences.  The US already has enough trouble competing in international trade, and now Trump’s foolishness has resulted in China reducing its prices even more!

Trump’s recklessness will have adverse consequences for all of America.  We have trading partners, you dunce.  You made our competitive position in world markets even worse!

China is not going to back down.  They have all the trump cards.  They can undercut America and will flood our markets until Trump and Congress raise tariff barriers against them.

The Chinese People Cannot Easily Be Humiliated!

What will the American people say a year from now as American exports fall even more, and China grabs an even greater piece of the international trading pie?  What will they say as prices rise and their meager wages are stretched even tighter? 

What will Americans say as Mad Man Trump plunges the US into another recession

Trying to change the US-China-Taiwan relationship before he is President is radically disruptive to US policy and harmful to American workers.  He will be sadly surprised by both domestic and international repercussions.

If he escalates this offensive into a military confrontation, it could be catastrophic.