Political Observation - Trump and the Looming Trade War


On March 8 2018, US President Donald Trump signed an order imposing tariffs on Europe, China and Japan - levies on imports of steel will rise by 25 percent and aluminum by 10 percent. However, Trump exempted both Mexico and Canada from the proclamation due to the North American Free Trade Agreement (NAFTA). "The actions we are taking today are not a matter of choice; they are a matter of necessity for our security," Mr. Trump said during the signing ceremony. He considers that the "bad policies and leadership" of his predecessors at the White House are the reason behind the existence of "failed trade policies" with many countries including the EU and China.

It is clear that this new decision of Trump’s appears to be in keeping with his electoral promises, i.e. to take protective trade measures. The United States had a trade deficit of $800 billion in 2017 which made Trump declare on the day he released his proclamation that "foreign trade practices ruined the US steel and aluminum industry." Although Canada is on the list of steel and aluminum exporters to the United States - 15.6%($5.2 billion) of US steel imports in 2017 came from Canada as well as40% ($7 billion) of aluminum imports, Trump turned his ire towardsChina and Europe in particular. This is despite the fact that China ranks 11th in steel exports to the United States with 2.7% ($900 million) and second for aluminum exports at 9.7% ($ 1.7 billion) compared to Canada being first. Europe is at the bottom of the list of steel and aluminum exporters to the US with the exception of Germany. However, the percentage of German exports is relatively small compared to that of Canada’s for instance. US imports of steel from Germany are estimated to be 4.6% ($1.5 billion), while aluminum imports are estimated at 2.3% ($392 million) with the entire EU 2017 exports to the United States estimated at 5.3 billion euros in steel and 1.1 billion euros in aluminium.

In view of these figures and data, it is clear that Trump aims to not only protect the US market or labour force but to impose stiff tariffs and levies on Europe and China, some of the biggest rivals of the US economy in terms of production and export. It is true that America has the largest production forceAnchor in the world, equal to that of China and Europecombined, but in order to insure its continuing dominance over the world, the US has to maintain its control over the economic strength of its international competitors in the near future. It is therefore not strange that Trump considers this decision to be in defense of US national security despite the looming threat of a trade war.

In order to remain the sole world leader, the latest US decision comes as a means to achieve the following:

First: to force steel and aluminum companies as well as car manufacturers and other US companies to invest inside the United States supportingdomestic production of these industries. This measure will increase US production and export capabilities and create more jobs for Americans. This is the best course to avoid paying the new tariffs, or so Trump stated.Donald Trump has already asked the presidents of the top three automakers in the United States to manufacture more vehicles in the country. This happened on January 25 2017 at a meeting at the White House with Mary Barra, CEO of General Motors, Mark Fields, CEO of Ford Motor Company and Sergio Marchionne, CEO of Fiat Chrysler. During the meeting, Trump pledged to make investment in the United States more attractive by loosening regulations and cutting taxes.

Second: force China to meet a number of American demands; this includesreducing the trade deficit with America by increasing US exports to China and raising the Yuan’s (China's currency) value, which the US considers to be 40 percent lower than its real value in the currency market due to the Chinese government intervention. According to a 2015 report by the US Bureau of Statistics, the US trade deficit with China reached $365.7 billion. That is why Trump has recently criticized China, saying, "We have asked China to develop a plan to reduce the current trade deficit between the two countries by $1 billion." However, it is clear that US pressure on China is not only economic; i.e. related to the trade deficit or the devaluation of the yuan. The timing of the tariff decision coincides withTrump’s announcement that he had agreed to meet with North Korean President Kim Jong-un. Hence, the tariff order also serves as political pressure on China to end its support for North Korea or stand neutral. China's continued support for North Korea would weaken Trump’sbargaining position with Kim Jong-un which could lead to an all-out trade war between the US and China. China understood this and its reaction to the Trump decision has been strong as evidenced in a statement released by the Chinese Ministry of Commerce: "The misuse of the 'national security exception' clause by the United States is wanton destruction of the multilateral trade system… and will surely have a serious impact on the normal international trade order."

Third: regarding Europe, the issue has to do with paying the North Atlantic Treaty Organization’s (NATO) expenses, something Donald Trump has been demanding since he was sworn into office. Trump said at the time that the US would not guarantee protection for some NATO countries if they do not meet their financial obligations within the alliance.Donald Trump recently attacked Europe declaring that it had "taken advantage of the US" especially Germany, the EU's biggest economy, which he called a "bad player" and accused it of being unfair to the US in terms of NATO contributions that are a fraction of what the US pays. "If you look at NATO, where Germany pays 1 percent and we are paying 4.2 percent of a much bigger GDP," Trump said, "That's not fair" adding, "So we view trade and look at the military, to a certain extent, they go side by side." This statement is a reiteration of what Donald Trump tweeted on 18 March 2017, the morning after his meeting at the White House with German Chancellor Angela Merkel: "Germany owes vast sums of money to NATO & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!" the tweet read at the time.

Pending the implementation of the order 15 days after its release, the European Union has pledged to impose stiff tariffs on dozens of US products if Trump does not back down. In terms of US trade deficit, Germany ranked second after China at a total of $74.2 billion in favor of Germany according to 2015 statistics. Its position made the German response to Trump's decision one of the strongest. Brigitte Zypries, Germany’s Minister of Economic Affairs and Energy, said that steel and aluminum tariffs announced by U.S. President Donald Trump would be a burden for German companies. "He has ordered punitive tariffs that do not conform with WTO rules and by doing so is increasing consumer prices and making the work of our companies - both large and small - harder," Zypries said in a statement. For his part, Zhong Shan, the Chinese Minister of Commerce, said on March 11, 2018, that his country would not initiate a trade war with the United States but in case it happens, Beijing is capable of defending its national interests in the face of Washington.

This is a message to the naive, ignorant fools, hypocrites and traitors in the Islamic countries on the occasion of Trump’s decision to impose tariffs on China, Europe and Japan. The steps undertaken by Donald Trump and his decision to impose tariffs on China, Europe and Japan under the pretext of protecting US national security reaffirms that the principle of free trade on which the capitalist system is built is of no value when it comes to maintaining the state's existence and its leadership in the world. This is a clear message to all those (Muslims) who promote the liberal system and the capitalist ideology, followers of the infidel secularists. They must realize that the infidel states do not care about their ideas, laws and values ​​when it comes to protecting their national security or pilfering the wealth of other people or their control over the fate of other nations.

Here is US President Donald Trump imposing tariffs on his closest allies in Europe, without care for Adam Smith's theories nor free trade and NATO's treaty of cooperation. And here is UK Prime Minister, Theresa May, announcing, during her meeting with Saudi Crown Prince Mohammed bin Salman, that UK interests and trade deals are more important than the ‘human rights’ issue in Saudi Arabia and more important than the war, disease and hunger in Yemen. Russian President Vladimir Putin is parading the latest in missiles and submarines made inRussian factories to protect Russia (and its allies) overlooking the nuclear arms reduction agreement with the United States. Trying to presentTrump's tariffs order, or his other decisions, such as the Jerusalem decision or the deal of the century, or his forthcoming meeting with North Korean President Kim Jong-un as individual acts that do not reflect the position of the United States of America is superficial and naïve. It is not what the concept of an Independent state is, its definition, concept, function, the nature of its ruling class or its decision-making circle. Donald Trump is the true and clear expression of American world policy without political subterfuge or diplomatic hypnosis.

While the Kufr states jostle one another to defend their strategic interests, slaughter the Muslims, violate their honour and plunder their wealth in utter disregard for the slogan of “preserving international peace and security” that they have been trumpeting, there are still several naïve reactionaries, obscurantists and Western culture-smitten individuals from among the champions of the Kafir secularism or the “believing secularism” bragging about world peace, normalisation with "Israel" and intercultural and interfaith dialogues.

Doomed are the tongues and hands of those intellectual, media and political perverts and doomed are their likes from among the scholars of the establishment and the theorisers of the police states.


24 Jumada al-Akhirah 1439h

12 March 2018