THE LEAD

                                                                                                                                                                                                                                                                                        

China-USA Tensions Stoked, Amidst World Turmoil; Push Break-Out to a New Bretton Woods

October 2, 2018
President Donald J. Trump participates in a business event with President Xi Jinping at the Great Hall of the People, Thursday, November 9, 2017, in Beijing, People’s Republic of China. (Official White House Photo by Shealah Craighead)
President Donald J. Trump participates in a business event with President Xi Jinping at the Great Hall of the People, Thursday, November 9, 2017, in Beijing, People’s Republic of China. (Official White House Photo by Shealah Craighead)

The world is in dramatic turmoil; it is not clear when it will be settled. For certain, without the international network of LaRouche collaborators on the scene, it won't be. The mobilization for bringing about a 'New Bretton Woods' of world development relations is critical; and essential to that, is the exposure and defeat of the British factor—the dying and dangerous monetarist, geopolitical system.

Helga Zepp-LaRouche, in discussions with associates in Europe today, described the situation in terms of two forces: the centrifugal force of the collapsing financial/geopolitical system in the West, near to blow-out; while, second, there is the unifying vector towards deliberate development and peaceful relations, expressed by the initiatives of the BRICS, and by the New Silk Road involving China, Russia, African nations, and others, and moving into South America. If problems in the United States and Europe are not solved, it is not clear which way the world will go.

There is a concerted campaign to ruin the United States-China relationship, and in any particular instance, the lines are often unclear in indicating who is immediately responsible. Among the latest expressions of the widening breach between the two nations is China's cancellation of the planned trip of Defense Secretary James Mattis, to go to Beijing in mid-October for the bilateral Diplomatic and Security Dialogue session, begun in June 2017, in Washington, D.C.. The Chinese authorities informed the U.S. on Sept. 27 that there will be no Chinese official available for the meeting this year. Also over the weekend, yet another U.S. military provocation occurred when the U.S. Navy destroyer, the USS Decatur, sailed through the Spratly Islands in the South China Sea, in a show of "freedom of navigation."

The enemy British crowd is throwing everything into the fray, with or without precision. One worrisome turn of events involves U.S. Ambassador to China Terry Branstad, former governor of Iowa and a longtime personal friend of President Xi Jinping, beginning with Xi's first visit to Iowa in the 1980s. Yesterday Branstad had a guest column in the Des Moines Register criticizing China for taking retaliatory tariff actions against what Branstad called Trump's "fair" use of tariffs against China, which are to "re-balance trade." Branstad said China is "bullying" the U.S., and harming American workers, farmers, and businesses.

Branstad also denounced China for having run a paid insert, called "China Watch," in the Sept. 23 issue of the Des Moines Register, criticizing the Trump tariff policy. President Trump, in his Sept. 25 press conference, called this "election interference by China," implying that farm voters are being encouraged to vote for anti-Trump candidates. Branstad went further, saying the Chinese Communist Party, which controls the media in China, took advantage of the U.S. "free press" by running propaganda in Iowa.

The kicker in this Branstad deployment, is that the front page of the very China Watch issue Branstad and Trump call objectionable, features a photo/review of the new book on Xi's love for Iowa, and his friends there, namely Branstad. (The book is, "Old Friends: The Xi Jinping-Iowa Story;" see review, EIR May 18, 2018 issue).

An immediate antidote to these maneuvers, and to the outright coup-operation aimed at the Trump Presidency and nation, is to get out the powerful briefing given by Barbara Boyd Sept. 29, to a Detroit LaRouchePAC town hall event, "Search and Destroy vs. Advice and Consent: A New Low in the War on Trump, But Also a Turning Point—Organize!" It is being specially prepared for circulation internationally, for example in Europe, where there is nearly nil insight into what the election of Trump stands for, in the way of prospects for change worldwide.

                                                                                                                                                                                                                                                                                        

SUPPORTING MATERIAL


Trump Announces Trade Negotiations/Agreements Picking Up Steam

President Donald Trump managed to hold a nearly hour-long press conference on trade agreements at the White House Monday, before allowing reporters to switch to questions on his Supreme Court nominee. The pace of U.S. negotiations of new trade agreements, replacing the unfortunate NAFTA and the failed Trans-Pacific Trade Partnership of previous administrations, is clearly accelerating.

The President's immediate announcement concerned the U.S.-Mexico-Canada Agreement (USMCA), which he called "a new deal to terminate and replace the NAFTA Agreement," and "the biggest trade deal in American history," affecting $2.4 trillion in trade and 1.4 million American jobs. Actually, Canada is agreeing to join the previously negotiated U.S.-Mexico agreement, which promises — if approved by Congress and the other parliaments — to increase auto and industrial employment in the United States, and improve wages and labor conditions in the Mexican auto sector. The new U.S.-Canada agreements as such are of minor significance — including a possible sunsetting after six years of the Investor-State Dispute Resolution Mechanism attacked by labor and fair-trade advocates, and a small (3.5%) additional "opening" of the Canadian dairy products markets.

The primary benefit, is that the inclusion of Canada in the agreement wins the GOP's votes in Congress for the much more substantive Mexico-U.S. side of the agreement. As to Democrats, both they and labor leaders like AFL-CIO President Richard Trumka were extremely cautious about even appearing to welcome the deal: "Too many details still need to be worked out before working people make a final judgment on a deal" [trumka]. Richard Neal (D-MA) slyly called it "a new NAFTA", a derogatory branding.

The South Korea-U.S. (KORUS) trade agreement signed six days ago appears to have one clear result: To lower Korean steel exports to the United States. The level agreed to is 70% of what those exports were in 2016, which was 2.9 million tonnes or $2.2 billion; that level was steady in 2017, and has declined in 2018 due to new U.S. tariffs; but not by 30%. So, here is further aid to U.S. steel production and employment; South Korea was the second-leading exporter of steel to the United States behind Canada, although a lot of both is said to have been Canadian and Korean companies' re-exporting steel produced in China.

Trump also told the conference that new trade negotiations are underway with Japan, having been initiated three weeks ago, he said, by Japanese Prime Minister Shinzo Abe. He said that Abe had told him at that time, that more Japanese automotive production will be moving to America. Negotiations are initiated at a low level with India, and may progress quickly.

On China, the President claimed its economy was in difficulty  — which "I don't want" — and said, "They want to talk; I don't think it's time to talk yet. We want them to keep helping us with North Korea." His usual strong praises of Chinese President Xi Jinping were not in evidence, although he said that Xi is aware of the policy changes he, Trump, is trying to push, "because he's a pro, and I'm a pro."

China on Sept. 29 actually cut its tariffs on more than 1500 products, facilitating machinery imports. This was said to bring China's "average tariff" on all imports down to 7.8% from 9.8%; the U.S. "average tariff" during Trump's presidency has risen from 2% to 8.2%, according to Bloomberg Global Data. 

                                                                                                                                                                                                                                                                                        

Related