In June, Washington continued its efforts to reach “tariff deals” on terms favorable to itself with two of its most important trade and economic partners: the PRC and Japan.
The “Tariff War” Tool in US Foreign Policy
Here, it seems pertinent to note that electoral battles in today’s “free world” bear almost no relation to the democracy they themselves proclaim, in its original sense, as a means of popular expression. When any and all means are considered acceptable to achieve the ultimate goal of winning or retaining power, including the use of meaningless slogans and the peddling of promises known to be impossible to fulfill.
Specifically, questions arise regarding every word in the MAGA slogan, questions that D. Trump, of course, will not answer. Because he apparently belongs to the rare breed of statesman who genuinely believes what he publicly says, that is, he trusts the intuitive-semantic “subtext” of the MAGA abbreviation. Which, in reality, represents nothing more than an attempt to “unwind the ground beef of history.”
For the US, this metaphorical “ground beef” is the result of quite objective political and economic processes throughout the entire post-war period. In this respect, the “tariff war” represents an administrative – that is, external – and almost inevitably crude, surgical intervention into these processes with the inherently unattainable goal of “returning everything to how it was. This accounts for, firstly, the already apparent negative consequences of the “tariff war” for the American economy itself and, secondly, the serious problems that have arisen in the negotiations aimed at its favorable conclusion for the US through the reaching of these very “tariff deals.”
However, the current US administration seems to attribute a universal character to the word “deal.” Specifically, it denotes the concluding element of two additions recently announced in the US to the ancient military strategy of “I came, I saw, I conquered.” Now, it ends with the elements “quickly left the battlefield” and “made a deal.”
Let us hope, however, that Washington will not abuse this strategy, which at first glance appears quite rational. While in the current conflict situation in the Greater Middle East it may lead to some positive results, in the Indo-Pacific region, where Washington’s focus of interest is shifting, the use of such a strategy is fraught with extremely serious negative consequences. For everyone.
Meanwhile, the factor of this aforementioned “shift” constitutes the backdrop to the difficult process of reaching a ‘tariff deal’ with the PRC, that is, with the leading country of the Indo-Pacific Region and the key geopolitical opponent of the US.
Has a “Tariff Deal” with the PRC Been Reached?
It is unlikely that we can answer the question posed above with sufficient certainty. Every contact between authorized representatives, whether in the form of a direct meeting or a phone conversation between them, is reported very sparingly at the official level. Forming an impression of the outcomes of the meetings in Geneva and London, held in May and June with a month’s interval, requires the use of the unofficial “information cloud” that inevitably arises in connection with these notable events in the relationship between the two leading world powers.
Adding to the difficulties is a noticeable divergence in the commentary each side provides on the same events. On June 26th, two weeks after the aforementioned meeting in London, President D. Trump, during an event at the White House, stated that Washington and Beijing had “just concluded a trade agreement.” The following day, Xinhua News Agency, citing the PRC Ministry of Commerce, reported that “trade and economic delegations confirmed the details of the framework agreement reached in Geneva and during the June 5th phone call between the leaders” of both countries.
As a reminder, the main outcome of the Geneva talks was a three-month postponement of the implementation of ‘mutually destructive’ tariffs, which the parties had announced in April at the height of the “tariff war.” Reciprocal concessions in the form of Washington lifting the ban on exports to the PRC of certain (though not the most advanced) electronic industry products, and a counter-cancellation of the ban on exports to the US of rare earth metals (which threatened a disaster for the same industry), were likely outlined during the aforementioned phone call between D. Trump and Xi Jinping. The specifics of the fundamental agreement reached were then discussed in London and, at the end of June, apparently took on a more definitive form during subsequent meetings of working groups.
At the same time, it should be noted that we are talking about extremely important, but still separate and fairly narrow areas of bilateral trade. And unlike the emotional statements about a ‘deal reached with China’ that are already common for the US, Beijing, it seems, views it only as an initial stage on the path to restoring a favorable atmosphere in trade and economic relations in general. In particular, the doubling, introduced on June 4th of this year, of the previously existing 25% ad valorem (that is, depending on the current value of the goods) duty rate on steel and aluminum imported into the US, is viewed as another serious problem. The White House statement on this decision says that the issue itself was raised even during D. Trump’s first presidency.
Therefore, the Chinese experts are correct in their assessments of the place of the discussed ‘deal’ within the framework of bilateral trade and economic relations, the prospects of which remain unclear.
Tokyo and Washington Continue to Hold “Fruitful Negotiations”
This is precisely, and invariably, how Japan assesses each of the ’rounds’ of negotiations with the US that began in mid-April on the very same topic of a “tariff deal.” These are also conducted both in direct contact and by telephone, and their total number is apparently approaching a dozen. Taking advantage of a suitable opportunity in the form of the regular G7 summit held in Canada in mid-June, even the leaders of both countries joined them. With the same “outcome,”, however.
And it is still unclear on what the optimism of Economy Minister R. Akazawa, who represents Japan at the negotiations with the US, is based, who believes that it will still be possible to conclude it by July 9th. That is, by the deadline of the three-month ‘pause’ on the introduction of those “mutually destructive tariffs,” which the American president does not intend to extend beyond the aforementioned control date.
The main problem remains the disagreements on trade in automobiles, that is, on the main component of Japan’s exports to the US. According to D. Trump, “They bring millions and millions of cars to us, but they don’t want to buy ours.” Meanwhile, the very fact that the date of July 9th is approaching is negatively affecting the automobile industry in Japan.
Once again, let us note the important domestic political component of the “tariff” problem and its already apparent negative consequences in relations between Tokyo and its key ally. This problem only exacerbates the already poor position of the ruling Liberal Democratic Party, as well as the current cabinet, on the eve of the upcoming July 20th election to replace half of the members of the upper house of parliament.
To conclude this text, it seems appropriate to add a remark of the most general nature regarding ancient warnings against trusting various kinds of “voices in the head. ” If self-proclaimed “prophets” listen to them individually, this mainly does not affect the space around them. But such trust is fraught with particularly negative consequences if it is observed in individuals vested with high authority.”
Vladimir Terekhov, expert on Asia-Pacific issues
