Escalating trade war. End of globalization?

 TRADE WAR WITH CHINA, TWO EDGED SWORD

MANY WILL SUFFER ECONOMIC DECLINE

Last week we witnessed The U.S. again threatening China with trade sanctions for doing business with Russia. The U.S. is now claiming that Russia is prevailing because some are not willing to cut off trade as demanded by the U.S. This goes for India, China, and even Germany, which if it loses its Chinese business, after losing its Russian business, will be in dire straits.

When Trump imposed tariffs on imported Steel and Aluminum it was because it was becoming clear that the U.S. was about to lose its domestic steel and aluminum manufacturing, a series security issue.  Then Trump was criticized for negotiating with China for reciprocity on tariffs. Tariffs would be imposed on China if China had tariffs on U.S. products, the goal was not to eliminate trade but to fight for fair trade.

We now see that trade and economic sanctions are no longer about fair trade but an attempt to damage the economic viability of anyone who does not submit to U.S. demands. This is usually in a bellicose and openly hostile attitude that in many other cultures is an insult and a cause for rejection, just for the attitude.

Sanctions have had great effects on the EU which is now entering a recession, particularly Germany, the premiere manufacturing country in the EU. They do near 40% of their trade with China and if they lose that business, it will usher in a depression. 

The United States has restricted silicon chip sales to China, and the chip business in the U.S. is not only losing much of its business with China, but China has now begun manufacturing their own chips and underselling the U.S. makers. 

Trump negotiated a trade deal where China promised to buy U.S. grain to lower the great trade deficit, China has now dropped U.S. grain in favor of grain from  more friendly countries like Brazil and Russia. 

The U.S. is also threatening India and Brazil for not obeying the U.S. instructions on who they should trade with, it is a losing battle of whack-a-mole that will most likely end in reduced economic activity.

Whether we want to admit it or not the U.S and much of the world is dependent on manufactured products from China and a growing list of other countries. At the same time these countries can very well get along without anything that the U.S. makes, even military equipment. The reality is that U.S. no longer has the leverage it once had, and is now resorting to threats of domestic agitation or violence. A desperate attempt to hold its position of world leader when it no longer has the manufacturing base or even the unity at home to enforce these demands.