From King George III to Donald Trump

BY John Gong

Editor's note: Dr. John Gong is a research fellow at Charhar Institute and professor at the University of International Business and Economics. The article reflects the author’s opinion, and not necessarily the views of CHINAPLUS.

Proverb 25:11, “A word fitly spoken is like apples of gold in pictures of silver.”

[Photo: CGTN]

In the city of gold last night, President Xi delivered a sternly worded speech. I wish his gentle tongue can break a bone, as Proverb 25 later says.

Although he was talking to a crowd of leaders and dignitaries from BRICS, African and a few other emerging market economies, the bulk of the speech was squarely directed at Washington, albeit Trump or America were never mentioned throughout the speech.

Xi was apparently trying to appeal to the developing world to build a broad-based alliance to counteract Trump's trade war. He called on these leaders to be resolute in rejecting unilateralism, and said that a global trade war should be rejected because there will be no winner. 

That is the same message that has been promulgated by the leadership of the European Union, Canada, Japan, the IMF and other international institutions.

Yet, what we are seeing from Washington, on the contrary, is an escalation of rhetoric and actions of the trade war. This is going to wreak havoc on the future of the global economy, and probably peace as well.

Since the first hit on 34 billion US dollars worth of Chinese exports on July 6, Trump has ordered another tariff list valued at 200 billion US dollars worth of Chinese exports. This is currently under public review and will take two months to process.

The president has released an official report accusing China of “economic aggression”, which is basically a rehash of Peter Navarro’s preposterous book “Death by China.”

He has dug out an old Department of Agricultural program in the Great Depression era for a 12 billion US dollar hand-out to farmers, a clear signal he is determined to stick with tariffs for some time as his weapon of choice.

Yesterday he put out a tweet, accusing China of “vicious” tactics on trade by specifically targeting US farmers with retaliatory tariffs, a group that he claims he loves and respects.

I am increasingly pessimistic about the prospect of a quick winding down of this trade war. And it appears that President Xi’s speech resonates with this unfortunate sentiment and he is prepared for the long run. He said those who pursue “economic hegemony” will only end up hurting themselves.

Chinese President Xi Jinping delivers a speech titled "Keeping Abreast of the Trend of the Times to Achieve Common Development" at the BRICS Business Forum in Johannesburg, South Africa, July 25, 2018. [Photo: Xinhua]

“Economic hegemony” is a strongly-worded phrase. If memory serves me right, I think this is the first time President Xi used such words to characterize American actions.

This Johannesburg speech is a sharp contrast to his previous much more moderate speech at Boao Forum about the same Sino-US trade matter. Now things are heading in a worrisome direction.

Against this backdrop, China is banking on more economic cooperation within the developing world as Xi suggested. The BRICS block itself represents a huge potential opportunity. Who would have imagined a term coined by former Goldman Sachs Asset Management Chairman Jim O’Neill has grown to such a large entity?

O’Neill coined the BRIC term in 2001 to describe the four emerging powers he estimated would equal the US in joint economic output by 2020. Brazil, Russia, India, and China invited South Africa to join the group in 2010.

Today, the five countries’ GDP is more than 90 percent the size of the US economy. In terms of purchasing power parity calculation, China’s GDP alone has already surpassed that of the US.

Yesterday Columbia University professor Jeffrey Sachs wrote an op-ed on CNN, saying that Trump is taking the US down the path of tyranny. America was founded on fighting tariffs from King George III. Today the whole world is fighting tariffs from Donald Trump! Who is on the wrong side of history?