Trade War Tok

Ben Wildsmith

I can’t think of a time when world events seemed so inexplicable.

The arrival of Donald Trump 2.0 in the Whitehouse seems to have left the world without a clear grasp of what’s going on.

Some of this is a deliberate tactic. By ‘flooding the zone’ with endless shocking directives, Trump keeps everyone guessing which ones are for show, and which he means to pursue seriously.

All policies are open to be reversed, or ‘paused’ once they have fulfilled their initial purpose of outraging supposed political elites.

The trade war with China, though, cannot be exited easily. If Trump can be said to hold a principled position on anything then opposition to imbalanced trade with China is it.

Consistent

He has been consistent on the matter since the 1990s and, back then, he had a valid point that America was selling access to its market too cheaply.

Times have moved on, though, and that access has created, over 35 years, an absolute dependency on Chinese manufacture. China makes 70% of the world’s batteries, 80% of smartphones, and 90% of processed rare earth minerals. America’s prime exports to China are soybeans and sorghum.

The Trumpian theory is that cutting China out will force manufacture back to America, thus reinvigorating the post-industrial heartlands that voted for him. The problems with that are fairly obvious and seemingly unsurmountable.

Americans don’t want to work in factories, and certainly not for wages that would make them competitive with those in China. Such a workforce would need to be trained from scratch and new supply chains established. China is restricting US access to rare earth minerals, over which it holds a near monopoly, so good luck there.

Ludicrous

Overlooking the situation, a restrictive trade war in the internet age seems contrary to nature. Money can be moved at the press of a button and information exchanged in real time from anywhere on the planet. Trying to operate a fortress economy under these circumstances is ludicrous, and this has not been lost on Tiktokers from both sides of the conflict.

‘Trade-War Tok’ has seen Chinese people speaking directly to their counterparts in America. As American and European firms cancel contracts with Chinese factories, some have taken to Tik Tok and opted to ignore non-disclosure agreements with former customers.

Whether these factories really are producing goods for Hermes, Gucci and other iconic brands is unknown. It could be that the factories just produce fakes…. but, the line they are pushing is plausible enough to have caused uncertainty amongst American influencers and consumers.

The factories claim that they make the high-end bags, shoes and accessories before sending the finished article to Europe to be badged. Furthermore, they are offering to sell the same stuff directly to American consumers at a price that is cheaper than the labels offered before tariffs were imposed.

Ripped off

The implication is that American consumers are being perpetually ripped off, not by China, but by the brands who symbolise aspiration in American culture. In one video, a smiling man explains the mark-up that western brands put on the goods he produces before advising his American audience, ‘You don’t need tariffs; you need a revolution.’

Nothing in Trumpworld is straightforward or easily explained. Tik Tok was supposed to have been closed down in the USA, after its Chinese owners refused to sell to American buyers. That closure has been serially blocked by the Trump administration for reasons that have not been adequately explained.

Cynics have suggested that surges in the value of the president’s meme coin have coincided with decisions to override Tik Tok’s closure.

If Trump’s presidency has any purpose at all beyond enriching the first family, then losing the trade war to China would seem to be fatal to those ambitions. China has a command economy, a pliant workforce, a manipulated currency, and hegemony over most of the stuff America needs.

It will win the trade war. The question that remains is whether the president is concerned about that or not.