US President Donald Trump said he could introduce a state of emergency due to the increasing momentum of a trade war with China. He stated this on the sidelines of the G7 summit, which takes place in French Biarritz.
“In many respects there was an emergency. I believe that I could declare a state of emergency, taking into account the fact that they steal, seize and steal our intellectual property from $ 300 billion to $ 500 billion a year, and for many years now we have been losing, in total, about a trillion dollars, ”CNBC quoted Trump as saying.
During a press conference following the results of the 45th G7 summit, he noted that China “has no choice but to agree.”
Recall that on August 23, the US president took the trade war with China to a new level, announcing that existing duties on Chinese goods worth $ 250 billion will be raised from 25% to 30%, and a new duty on goods from China of $ 300 billion, which is planned enter from September 1, will not be 10%, but 15%.
At the same time, talking with reporters, Trump recalled his “excellent” relations with Beijing.
“In fact, now we get along well with China and maintain a dialogue. I believe that they need a deal much more than we do. Fees are very beneficial to us and bring billions. Before that, we didn’t receive 10 cents from China, so we’ll see what happens next, ”the US president said.
During his bilateral meeting with British Prime Minister Boris Johnson, Trump rejected the possibility that other G-7 leaders would persuade him to end the trade war with China.
“I think they respect the trade war. It has to happen. China ... I can only speak on behalf of the United States and I don’t know how it does with Great Britain and other countries, but, from the point of view of the United States, what China is doing is outrageous. From year to year, past presidents and administrations allowed the Chinese to appropriate hundreds of billions of dollars with impunity and invest them in their country, ”Trump said.
“Things are going well in our country. We had terrible trade agreements, and I'm putting them in order. Undoubtedly, the most serious situation is with China, ”the US president added.
In the United States, the state of emergency makes it possible for the executive branch to independently make decisions that are harsh, said Andrei Sidorov, head of the department of international organizations and world political processes at the Moscow State University’s faculty of world politics, in a conversation with RT.
“The country already has more than 30 emergency modes for a variety of reasons, and the very first of them, which is extended every six months, is associated with sanctions against Iran from 1979. Its introduction will give Trump more opportunities to oppose China without looking at Congress - decisions will be made faster that will allow new measures to be introduced against China, ”the expert explained.
Economic emergency
Speaking about the introduction of a state of emergency for economic reasons, Trump has in mind the application of the Law on International Extraordinary Economic Powers (IEEPA).
This federal law, passed in 1977 by Jimmy Carter, gives the president the right to regulate international trade after the declaration of a state of emergency in response to any unusual and extreme threat to the United States that comes from all or to a large extent from outside.
Under his terms, Trump may declare the state of affairs in trade with China “an unusual and extreme threat to national security, foreign policy, or the economy of the United States.” This will give him the right to block transactions and freeze the assets of companies in order to counter this threat.
Thus, the US president can put pressure on American companies, forcing them to return production facilities and jobs from China to the United States.
Recall that Donald Trump is actively using the introduction of the emergency mode to solve political problems - in the spring of this year, he already introduced such a regime to receive funding for the construction of the wall on the border with Mexico, bypassing the US Congress.
On August 20, Donald Trump called on American companies, in particular Apple, to transfer production from China and leave this country.
“I can help American companies like Apple for a very short time until they do what they have to do: probably leave China, because this (help. - RT ) will last a very short time. If I didn’t help them, they would have big problems, ”Trump said.
Trump will not be able to force American companies to leave China with this step, since it is impossible to instantly transfer mass production, says Yuri Rogulev, director of the Franklin Roosevelt Foundation for the Study of the United States at Moscow State University.
“I think that this can’t be done even in two presidential terms ... I think Trump’s statements are related to the fact that over the past year the US economy is brewing and thus tries to forestall these events. The US president deliberately escalates tensions so that he will not be accused of recession because of his decisions, ”Yury Rogulev commented on the situation in an interview with RT.
In turn, Andrei Smirnov noted that the US executive has many ways and tools to put pressure on American companies, as a result of which they will leave China.
“Any enterprise is somehow connected with state orders. If Trump wants to, then he has opportunities for this, but this, of course, will quarrel him with business, because the income of business elites will be reduced, ”Smirnov said.
"Fears deterioration"
On August 26, Chinese Foreign Ministry spokesman Geng Shuang said during a press briefing that Beijing would take the necessary retaliatory measures if the US further increased duties on Chinese goods. He added that threats to the Chinese side will not work.
- Shoppers in a mall in Pennsylvania, USA.
- Reuters
- © Mark Makela
“This step by the USA is a serious violation of the agreements of the leaders of the two countries in Osaka. I must say that threats and intimidation will not work with China ... If the United States actually takes this step, then China will continue to take the necessary measures to ensure its legitimate rights and interests, ”RIA Novosti quoted the diplomat as saying.
The spokesman for the Chinese Foreign Ministry added that Washington and the Trump administration neglect the rules of multilateral trade and undermine the interests of its participants by their actions, disrupt the production and supply chains, which leads to negative indicators of economic growth.
“We urge the United States to refrain from misjudging the situation and stop erroneous actions,” he said.
China, for its part, has introduced additional duties totaling $ 75 billion for more than 5 thousand items of American goods, which will come into force on September 1.
For ordinary Americans, it is important how much Chinese products rise in price, because stores for the middle and lower segments of the population are crammed with Chinese products, said Andrei Sidorov.
“Trump fears a worsening economic situation. Today, he presses for the Fed not to increase interest rates on loans, because in this case, commercial banks around the world will raise rates after them. The US president wants loans and the dollar to be cheap - this increases the competitiveness of American products in world markets, ”the expert explained.
Trump, in order to win in 2020, must maintain the growth rate and the level of employment that currently exists, added Andrei Sidorov.
“Of course, complications may arise after the election, since the American economy is now very overheated, which can lead to a sudden collapse,” the expert concluded.