“This fall in trade will also hit the lowest income earners hardest: the Americans who rely on low-cost goods and services.”
Not one to shy away from controversy, Donald Trump has attempted to use the COVID-19 crisis as a new ‘marketing opportunity’ for his presidential campaign by using language to scapegoat his biggest rival: China. The goal? To prove that he is ideologically and economically stronger than his foe, with promises to revive the United States’ manufacturing industry and regenerate the American economy. Given his position of power his language has the potential to dictate the behaviour of millions. There is no doubt that there are real and tangible economic consequences to Trump’s language.
Trump began to voice his protectionist stance back in 2016 when he planted the seed that the United States has an over-reliance on China. This has only gained traction since the beginning of the current crisis. From the onset of the virus, he has been vocal in criticising China for their role in the outbreak, labelling it the “Chinese Virus”.
Some deem it factual and fair. Others fear it is an offensive racial slur that creates intolerance towards Asian – Americans and disdain towards China. The suggestion of blame has resulted in an escalation of geopolitical tension between China and the US. Adding fuel to the fire, Trump tweeted: “Asian Americans are very angry at what China has done to our country, and the World… I don’t blame them!”. This sparked a retaliation from Chinese official Geng Shuang: “We urge the US to stop this despicable practice. We are very angry and strongly oppose it [Trump’s tweet].” Further confrontational dialogue has been used between the two countries.
The unexpectedness of Coronavirus makes the damage to these two global economies very severe. ‘Making America Great Again’ requires economic prosperity, low levels of unemployment and high levels of business confidence. Before COVID-19 data suggested that Trump was succeeding in achieving this. However, any progress that had been made has been diminished or even erased.
A change of tactic was needed. Trump has used targeted language against China to provoke American citizens in believing that China is punishable for the Coronavirus. He promises if re-elected he will rebuild the American economy – without the assistance of China. This plays into long-held US worries about being dependent on fluctuating world markets, and is the cornerstone of an isolationist policy that will be detrimental in the long-run for both the US and world economy.
Have Trump’s tactics been a catalyst for the decline in the Chinese economy?
There is certainly evidence to suggest so.
China’s National Bureau of Statistics reported that the Chinese economy contracted six point eight percent from January to March 2020 – the first time in 30 years. A contraction in the Chinese economy translates to high rates of unemployment, low level of business confidence and Yue Su from the Economics Intelligence Unit suggested there would be “permanent income losses.”
With this in mind, it is clear China is entering economic uncertainty – a challenge they have not had to face for decades. Although much of this is not directly attributable to the comments made by Trump, as China, like the rest of the world, is facing a pandemic, it can be argued that Trump’s isolationism is exacerbating the problems.
Evaluating the economic impact shows there is clear detriment to the Chinese economy. By targeting China, Trump is aiming to discourage American citizens from purchasing Chinese goods and instead buy locally. For Trump, this is beneficial as it will help to stabilise the US economy and achieve economic prosperity, and will incentivise his base as he heads towards November.
The protectionist policies continue; Trump has already banned Huawei from purchasing computer chips from technological giants LAM, based in Silicon Valley. This supported his narrative to American public that allowing Huawei technology into the country could result in privacy breaches and threaten their national security. There has been little protest to the ban.
A risky strategy?
Playing the blame game is economically risky for all countries involved. China has not been afraid to express their disgruntlement towards the United States. A spokesperson for the Chinese commerce minister said “[China will] take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises.”
China too is seeking to reduce its reliance on the US; forming trade alliances with other nations strengthens them as the trade war heats up. For Trump, and his economic goals, this could be problematic: China is the third largest export market for the States and a reduction in demand could result in many job losses in the US. The fall in trade will also hit the lowest income earners hardest; the Americans who rely on low-cost goods and services.
More equitable outcomes could be achieved. China’s desire to change trading partners could lead to the identification of new markets, diversify trade and provide reciprocal benefits to emerging economies. This ultimately changes the trade patterns of the global economy. By implementing this divide and conquer tactic, China is looking to diminish the influence the United States has over its allies – including the United Kingdom. Even optimistic appraisals of the US economy are likely to suggest that without a significant shift away from isolationist policies this trade war is unlikely to strengthen the US economy.
Is China the lifeline for Trump’s presidential campaign?
The numbers speak for themselves.
Donald Trump’s approval ratings show that people are discontent with his handling of Coronavirus. The increase of hostility towards China is an effective method of distracting voters. In January 2020, Trump’s approval rating peaked at 49 percent. By the end of May, his ratings had fallen to 39 percent: their lowest level in years.
Additionally, Trump’s actions have not been ignored. There have been repercussions from China as foreign minister Wang Yi claimed that China will reach full modernisation and ‘win the war’ against the US. Further the United States’ economy has contracted four-point eight percent in the first quarter and it is not guaranteed that the recovery from Coronavirus will be a swift one.
Trump’s adoption of negative language towards China has impacted the credibility, success and economic prosperity of not only China but also the people of the United States. The current trajectory indicates that Trump seems to be inflicting more self-harm in light of the fast approaching election in November: appealing to the protectionist characters of his voter base is a risky strategy that might well backfire.