U.S. President Donald Trump is once again expected to leave his mark on the agenda of the NATO Summit that is set to start in Brussels on July 11. Trump, who emphasizes that NATO constitutes a heavy burden for the U.S., demands a greater financial contribution from European allies. Advocating that NATO members need to allocate a bigger share for defense, Trump had also instructed U.S. envoys to lobby in the countries, where they are on duty, for the sales of American weapons.
The trade wars Trump started by imposing additional tariffs on aluminum and steel products will, without a doubt, come up on the agenda at the NATO Summit as well. Europeans are concerned about how far Trump will take the trade wars he turned into a “game of chicken.” Of course, a “rising China” is the focus of Trump’s trade wars. The additional tariffs between the two countries started on Friday as of 5 o’clock. The cargo ship Peak Pegasus, which was carrying soybeans, raced against time to reach China before 5. The ship that wanted to avoid the new 25 percent tax lost the opportunity for exemption with a half an hour delay.
Trump wants to bring the growth plan Chinese President Xi Jinping describes as the “Chinese dream” to a standstill. There is massive competition between China and the U.S. in the area of “virtual reality” and “robot” technology. Trump accuses China of “industrial cyber spying” in the U.S. and sculpting international free trade rules unilaterally toward itself only.
China and the U.S. are choosing strategic products that will lead to political results in retaliation to one another. The U.S.’s additional tariffs have reached $50 million in total. While China retaliates against agricultural products, primarily soybeans, the U.S. is mostly choosing technology products. Two-thirds of the agricultural products exported from the U.S. to China consist of soybeans. China, the biggest buyer of American soybeans, imported $14 billion worth of the product last year. It was interesting that China chose products produced in predominantly Republican rural areas. The election area of Mitch McConnel, the leader of Republicans in the senate, is also among these regions. The retaliatory tariffs are expected to lead to a serious loss of jobs in both countries. The impacts that the problems, which will arise from the retaliatory tariffs, will have on the by-elections in autumn is already being discussed.
The trade wars are going to make everyday life difficult for consumers. Therefore, everybody is wondering who, in this game of chicken, will give up and pull back. China does not seem like it will give up and announced that it will respond to each new tariff. As for Trump, he announced that if China expands the retaliation, he is going to increase the amount as high as $500 billion. This figure is equivalent to the U.S.’s amount in imports from China. Its import from China last year reached approximately $130 billion. Thus, the U.S. has a great deficit in trade with China.
The “game of chicken” is a strategic game. The most striking example of this game was a scene in the 1950s “Rebel Without A Cause,” starring James Dean in the lead role. The subject of the tension in the scene audiences watched holding their breath was which of the two young men driving their car toward the cliff at full speed would give up and withdraw from the race. The first one to withdraw from this race, which would end in death, was going to be declared a “chicken” by their friends.
The chickens in the trade wars started by Trump, of course, do not consist of China and the U.S. alone. There are numerous players on the ground like Canada, Japan, Mexico, South Korea and EU countries. The trade wars between imperialist powers, initially between the U.K. and Germany toward the end of the 19th century, led to two world wars – whose outcomes were destructive for humanity – in the first half of the 20th century. Today, the future-oriented power race between China and the U.S. is being dragged toward an extremely dangerous course with the pressure of the internal crisis going on in the world system.