A trade war to redress the dignity deficit

A couple of weeks ago I talked about ‘The Lighthizer doctrine,’ and I said that “Donald Trump came to office with a vision of a raging global trade war … [and Robert Lighthizer] … has testified that his goal is to bring manufacturing back to the United States.” Now an article in the South China Morning Post says that “US President Donald Trump’s strategy is to make the trade war with China “unprecedentedly large” and “unbearably painful” for Beijing, and he will not back down before victory, former White House chief strategist Steve Bannon said in an exclusive interview … [and] … Bannon said the aim was not just to force China to give up on its “unfair trade practices” – the ultimate goal was to “re-industrialise America” because manufacturing was the core of a nation’s power.

Bannon, who claimed to have helped Trump draw up the trade war plan,” … [told 599797b8f1a850e8128b5a1d-750-563the SCMP that] …  “in the past, tariffs had been limited to imports of between roughly US$10 billion and US$30 billion but the sheer magnitude of the more than US$500 billion in question this time had “caught Beijing off guard” … [and, he said] … “It’s not just any tariff. It’s tariffs on a scale and depth that is previously inconceivable in US history,” … [and] … He said Beijing had relied on “round after round of talks” to take the momentum out of the US punitive measures, but the delaying tactics would not work.” But, Mr . Bannon said ““They always want to have a strategic dialogue to tap things along. They never envisioned that somebody would actually do this.”

Steve Bannon “said there was little difference within the US political elite – either Democrat or Republican – on the issue of international trade, and in his first meeting with Trump in 2015, both men agreed that the Washington and Wall Street establishment would “side with China” in the upcoming trade war … [therefore] … Factory_Near_ClevelandThe two decided to change the international trade regime to “dramatically reduce [the US] trade deficit” and to re-industrialise America, especially the so-called rust belt states.” About a year ago I discussed this strategy, especially the notion that good, honest hard working Americans (and Canadians and Germans, too) lost their “metal basing” jobs to Chinese and South Korean and Filipino workers who would do the same hard, dirty work for less money. I contended then, and I still believe that the South Koreans et al don’t just work cheaper, they also work smarter and Big Labour in Europe and North America literally priced its members our of the market when they refused to welcome increased automation.

Mr Bannon told the South China Morning Post that President “Trump would “never back down in the trade war [with China]”, even though the president anticipated downloadthe policy would face “massive resistance domestically and internationally” … [and] … He accused “Western elites” of working with Beijing to make themselves rich. “Our factories got shipped out of here. Wall Street made a fortune. The private equity made a fortune. Right now President Trump’s focus is on stopping it.”” If only it was that simple … but the fact that  Mr Bannon and Mr Lighthizer and President Trump might know that the whole business is a lot more complex than that doesn’t alter the fact that it’s a very good story that a lot of people, tens of millions of Americans, want to believe.

Steve Bannon also said that “Washington should also retain some ability to “cut off” some key parts of the supply chain with China when necessary – as it did in the case of Chinese telecommunications giant ZTE … [the article noted that] … Trump banned sales of American technology to the company in July, almost bankrupting it and putting up to 100,000 highly paid Chinese jobs in danger before lifting the ban. … [and, he said] … “It is very important to the Chinese audience [to remember] the case of ZTE. The central theme of Made in China 2025 is that the Chinese are trying to get off the supply chain – the component parts of the supply chain – of the West. The Chinese are very vulnerable there. Their government should never allow them to get into a situation with all this aggressiveness in their trade policies.”

Mr Bannon concluded with some remarks that I believe both Chinese and Canadian leaders must understand: “in the end,” he said “the trade war and US tariffs were about more than the economy and rebuilding American manufacturing … [but, he explained] … “The elites and the media are trying to convince you that this inexpiable leaving of the factories and jobs is but a law of physics. The opposite is actually true – it is the human action which did it. It can be reversed and it will be reversed” … [and] … “[The] tariff is about human dignity and human pride … Not everyone wants to work for an insurance company.”

That last bit is what former Prime Minister Stephen Harper meant when he said, earlier this year, that the movement which President Trump leads will outlast him. The president and Mr Bannon understand America better, I think, that do Xi Jinping and I. They have found and tapped into that “dignity deficit.”

There is dignity in this …

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… but there is none in this …

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… and President Trump and Robert Lighthizer and Steve Bannon all understand that basic fact. Xi Jinping and Justin Trudeau and the Laurentian Elites need to understand it, too, and they need to understand that what President Trump is doing might be long term  strategic nonsense that will hurt America as much as it will hurt Canada and China,  but it is tactically brilliant in the immediate term because it appeals to a raw emotion: pride.

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