Monday, May 14, 2018

Right Time, Wrong Industry? Ryan Lorig


Donald Trump and Chinese President Xi Jinping made headlines this week when Trump tweeted about relief and eased sanctions for Chinese telecommunications equipment maker, ZTE Corp. Trump said the firm needed “a way to get back fast,” in order to ease trade tensions between China and the U.S. This comes after the U.S. Commerce Department banned U.S. firms from supplying ZTE Corp with valuable parts needed to manufacture the cellphones. However, this move opens the gate for criticism that the President has put Chinese business ahead of American jobs, something that would greatly tarnish Trump’s legacy and his intentions going forward. I think this move allows Trump to finagle his way out of a tense conversation with China’s top economic advisor in a meeting set for Tuesday May 15. But I do think that Trump supporters and Republicans alike will be frustrated by this move, seeing it as Chinese corporations winning the mini-trade war that was brought about by Trump’s tariffs on steel months ago. Many of his supporters would perhaps see this as a weak move, one that contradicts with Trump’s personality and history in negotiations. I, however, think this is a gradual step off the ledge in a trade war with China. Sure we all want jobs to remain in the United States and for American workers to be the ones getting our hard earned money, but in reality, we just cannot compete with China and the rest of the world. Globalization is not only affecting small countries that trade within themselves, but it’s affecting large industries in powerful countries that cannot produce goods as cheaply as another country, as evidence here by the U.S. and Chinese steel industries. While I do not know the answer to sustaining both economies and steel industries, I think this move by President Trump is an appropriately timed de-escalation of the potential trade war with China, however, it may not have been the appropriate industry.

https://www.bloomberg.com/news/articles/2018-05-14/trump-s-china-u-turn-emboldens-democrats


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