The sharp rise of the Dow Jones Industrial Average since Donald Trump’s election as president in November 2016 is something he and his supporters often cite to show how he has helped the economy — and how, despite his divisive style, Trump’s tax cuts and regulation reductions have been good for America. But the president’s bluster about trade wars and the important U.S.-China relationship has so far fueled only chaos.
There’s been global fallout since the previous Saturday, when Trump asserted that Chinese President Xi Jinping had caved in his trade war with the U.S. Trump said he’d cut an “incredible” deal in which China would drop a 40 percent import duty on American cars in return for the U.S. dropping a planned increase in tariffs on $200 billion of Chinese exports.
Initially, markets around the planet were thrilled by the news. But as it became clear that Xi had only agreed to a 90-day truce on trade issues — not remotely what Trump claimed — investors panicked. The Dow has fallen by 2,000 points from its 2018 high, wiping out nearly all of its gains for the year. Adding to investors’ worries: the news that Meng Wanzhou, chief financial officer of the giant Chinese tech firm Huawei, had been arrested by Canadian authorities at the U.S. Justice Department’s behest, reportedly because of Huawei’s breaking sanctions by doing business with Iran.
Given that she is the daughter of Huawei’s founder, Ren Zhengfei, who is revered in China for creating a tech behemoth that is a legitimate rival to U.S. firms, Beijing’s sharp reaction to her arrest was no surprise. But the arrest only underscored the valid reasons that Washington has for being upset with China’s trade practices. China tramples on laws and agreements it doesn’t like, not just by trading with international sponsors of terrorism and subsidizing exports but by aggressively stealing intellectual property and business secrets from U.S. tech firms. Trump has a case when he says his predecessors let Beijing get away with awful behavior.
But it’s his problem now. He has stated that “trade wars are great and easy to win.” It’s easy to declare nonexistent wins. It’s far more difficult to stabilize the strategically vital relationship between Washington and Beijing with the care and thoughtfulness it demands — and the world needs.
Editorial by The San Diego Union-Tribune
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