Trade war, day 55: China only third priority after NAFTA, EU

Newsletter

Today, U.S. Treasury Secretary Steven Mnuchin confirmed what was already pretty obvious: The Trump administration is in absolutely no rush to resolve its ongoing trade confrontation with China.

  • “We’ve put [Washington’s foreign trade objectives] in three categories: the first was really [the North American Free Trade Agreement, or Nafta]; the second is dealing with the EU, which we are making progress on; and the third is China,” Mnuchin said, the SCMP reports.
  • The thinking behind the U.S. side’s comfort in a drawn-out approach — that the Chinese economy will be, or already is, collapsing under pressure from the U.S. — was explained in more detail in our trade war roundup yesterday.
  • The Chinese thinking, which similarly leads officials in China to take a patient approach at this time, is that the U.S. is using the trade war as a tool to contain China’s economic rise and is therefore not willing to compromise. This was also explained in our roundup yesterday.
  • More confirmation that this is what Chinese officials think can be found in the People’s Daily today: Noted China-watcher Bill Bishop points out (paywall) a piece (in Chinese) by Long Guoqiang, vice president of the Development Research Center of the State Council — effectively, Long is the equivalent of a high-ranking Cabinet official.
  • Long argues that “strategic containment” (战略遏制 zhànlüè èzhì) is one of the primary American goals with the trade war — along with “interests extortion” (利益敲诈 lìyì qiāozhà), basically threatening trade wars or actually going through with them to force the opening of markets, and “model beatdown” (模式打压 móshì dǎyā), or attacking the Chinese “state capitalism” model of development to preserve American hegemony.

In other trade war and related news:


Previously in SupChina’s trade war coverage:

Trade war, day 54: Trump says ‘not the right time to talk’ with China, as trade conflict looks to extend to at least November