Anything But China

America's new motto is 'Anything But China'. Considering the dominating personality of the US President Trump which is more consistent with the US’s image of Inspector, the present day US seems to be quite against Chinese hegemony in manufactured goods which dominates not only the US markets but the whole world ignoring the fact that it is the US who allowed China to create manufacturing hegemony to just keep dollar as only global exchange and reserve currency. However, a lot of water has gone through the rivers, and China aspires to become the new Inspector of the world and the US is not liking this!

President Trump started a trade war against China in 2018, which couldn’t achieve much for the US. However, in this, he seems to be determined to tame China by imposing high tariffs on Chinese goods. In response to the US tariffs, China announced retaliatory tariffs against the US to counter the 2nd April announcement of the US President and has been caught red-handed. The US has increased the tariffs on Chinese goods to 125%. The US has retaliated against every country that has increased tariffs against the US when it pushed a 90-day pause button on the implementation of the reciprocal tariffs. However, if the world sustains this shock, it will accelerate the de-dollarisation movement, and this movement will gain momentum as the US has indirectly announced that it doesn’t want to be the big brother of inspector of the world!

The US has some issues in its domestic economy and society, which it seems to be fixing through reciprocal tariffs. Not only the domestic economy, but the US is also trying to change the global economic scene and geopolitics for the next few decades. However, time will prove its effectiveness as the US is no longer the US of the 20th century, when hardly any country beyond Europe had many aspirations. In this changing world order, China leads the pack, and this is sending jitters in the USA!

It should be noted that China directly holds about $800 billion of the US treasury bonds, and there are conspiracy theories that say that China holds more than a trillion dollars of the US bonds, of which it holds indirectly through different entities. Not only this, but the US has a national debt of $37 trillion, and $7 trillion needs to be refinanced this year. This is also an important angle in the whole episode, which is unfolding. So China seems to have gained huge importance in the Trump administration, and the policy orientation of the US has undergone a complete 180-degree shift, and its geopolitics and foreign policy are aimed at countering China. The Trump administration looks to be determined to bell the Chinese dragon. Maybe, a tariff of 125% on Chinese goods is a step in that direction!

Dr Rajeev K Upadhyay