The phrase trade war is often used by the press to attract more readers or get more clicks. However, it is our view that the US is not engaging in a trade war but developing a strong negotiating position and in the process, while pointing to historical facts and numbers (data points to a massive trade deficit of $500 billion with China) the President is setting his sights on China and Germany, while turning a blind eye to Canada, Mexico, Japan and other favored relationships. White House chief economic adviser Larry Kudlow downplayed trade war fears and suggested that negotiations are the ultimate aim.
The US trade deficit was a useful tool in the post WW2, Cold War Era, but now it is a policy that has negative implications for the US and very positive implications for German and China. NAFTA in, regional relationships in (read Japan) but Germany out. Our research points to the most difficult relationship to be with the Germans and Chancellor Merkel. China and the US have shared ultimate goals, the US and Germany generally do not.
China and the US will spend the next 5 years in deep discussions, hashing out details and focusing on the trade deficit, but all out trade war, this will surely not take place. And this is not an issue of win or lose, both countries need to work with each other as the US pulls out of the global management position it held since 1945 and China finds its way as a very powerful and new second Super Power……China has arrived on the global stage.
The US trade talks with her allies and less important trading partners will be heated for the next decade, President Trump will start it off, but others will follow as a New World Order of trade and geopolitics take hold in a post-Bretton Woods Era.
Look for more audio visual presentations from our studio in Shibuya, Tokyo and articles on Classiarius.net.