Pick Your Poison: Trade War or Nuclear War?

We are back once again with “Damnit Donald”, chronicling the absurdities and scrapes which have characterized every day of Donald Trump’s presidency.

An Update on the Shutdown

A temporary funding agreement signed on Friday, January 25 ended the longest government shutdown in American history. This measure funds the government for three weeks, allowing employees to finally be paid, and does not include any money for the border wall.

Since December, the Democrats had insisted that Trump temporarily reopen the government before they will consider discussing border wall funding; while it took five weeks, Trump eventually realized that they would not concede while the government remained shut down.

Another factor in his decision was the toll reported by various government agencies, including air travel and law enforcement, when employees refused to come into work.

On Friday night, the House and the Senate unanimously passed a bill to temporarily reopen the government, which Trump signed. This comes three days after he adamantly said, “We will not Cave!” and one day after he insisted on a “prorated down payment” on the wall as a compromise. No down payment was made.

Trump said he was “very proud to announce” the agreement in his Rose Garden speech, not admitting defeat. He tweeted: “I wish people would read or listen to my words on the Border Wall. This was in no way a concession. It was taking care of millions of people who were getting badly hurt by the Shutdown.”

He also hinted – although “hinted” is used loosely here, as we all know Trump’s degree of subtlety – at the alternative course of action he has as his disposal. “As everyone knows I have a very powerful alternative but I’m not going to use it at this time.”

He could exploit his position as Commander in Chief to call a state of emergency, thereby bypassing Congress and allocating military funds for the southern border wall. According to CNN, this document has already been drafted, involving up to billions of dollars.

In a comment just short of a threat, Trump said: “We really have no choice but to build a powerful wall or steel barrier. If we don’t get a fair deal from Congress, the government will either shut down on February 15 again, or I will use the powers afforded to me under the laws and the Constitution of the United States to address this emergency…We will have great security.”

However, such action would provoke constitutional uproar and legal challenges. While Trump is unpredictable at best, a state of emergency appears unlikely.

This is seen as a victory for the Democrats, especially for Speaker of the House Nancy Pelosi, who only came into this post three weeks ago. She said, “Our unity is our power – and that is maybe what the President underestimated.” Democrats have praised her refusal to back down.

When asked if there will be another shutdown, Pelosi said, “I can’t assure the public about anything that the President will do, but I do have to say I’m optimistic.”

Trump is also optimistic, although on the opposite front. “I think we have a good chance…We’ll work with the Democrats and negotiate and if we can’t do that, then we’ll do a – obviously, we’ll do the emergency because that’s what it is. It’s a national emergency.”

In his speech in the Rose Garden, Trump thanked the employees, who he called “incredible patriots”, for their “devotion in the face of this recent hardship.” He assured them that they would receive their missed pay cheques in full, and as soon as possible.

Trump finally caved when he heard stories of law enforcement officials unable to do their job properly, according to an administration official who spoke with Reuters on the condition of anonymity. He had also been facing pressure from Republican lawmakers to end the shutdown. Even in December, Republican Senate majority leader Mitch McConnel warned him that the Democrats would not give in.

There were also major issues in the travel industry – hundreds of flights in New York and Philadelphia were grounded or delayed because air traffic controllers were calling in sick. 26,000 IRS workers were called into work last week to deal with the impending tax season, but over half refused to go in.

Over the past five weeks, 800,000 federal workers were either furloughed or forced to work without pay, accounting for about a quarter of the federal government. Many turned to unemployment assistance, food banks, and other support. For context, an estimated 40% of adults do not have the funds to cover an unexpected $400 expense; two missed paycheques is incredibly straining.

FBI Director Christopher Wray called the shutdown: “mind-boggling”, “short-sighted”, and “unfair”.

The southern border wall was a campaign promise, and it has been a point of contention since the beginning. Trump says it is needed to prevent illegal immigration and drug trafficking, while the Democrats argue that it is ineffective, costly, and immoral. His vision of its design is quite enlightened: “The walls we are building are not medieval walls. They are smart walls designed to meet the needs of front-line border agents and are operationally effective. These barriers are made of steel, have see-through visibility, which is very important, and are equipped with sensors, monitors and cutting-edge technology, including state-of-the-art drones.”

Trade Deals with China

On Thursday, January 31, US Trade Representative Robert Lighthizer met with Chinese Vice Premier Liu He, concluding two days of high-level trade talks in Washington DC. No deal was reached, but Xinhua news agency reported that China’s trade delegation called the talks “candid, specific and fruitful”, saying that they made “important progress”.

China agreed to purchase an additional five million tonnes of soybeans and followed through on this promise on Friday. Trump said this would “make our farmers very happy”, as they had suffered from the loss of their largest customer. In 2017, China imported over thirty million tonnes of soybeans; analysts say these numbers may never be reached again.

Lighthizer told reporters that America’s goal is to make China’s commitments “more specific, all-encompassing and enforceable.” Lifting tariffs was not part of the talks.

Trump says he plans to meet with President Xi Jinping in the coming weeks, although no specific plans for the meeting were announced. However, he is optimistic that they could reach “the biggest deal ever made.” US trade negotiators will visit China in mid-February for further discussion.

The US and China are involved in a trade war which led to $360 billion in new tariffs last year. On December 1, Trump met President Xi in Buenos Aries, agreeing to a 90-day truce in which there would be no escalation in tariffs. That deadline expires on March 1, when the White House will enforce a tariff increase from 10% to 25% on $200 billion worth of Chinese goods. Economists say this would be a big blow to the global economy, as these are the world’s two biggest economies.

Lighthizer said at the Oval Office meeting: “At this point, it’s impossible for me to predict success but we are in a place that, if things work, it could happen.” This conclusion is as convoluted as Trump’s tend to be.

There are two major issues related to the trade discussions: intellectual property protection and forced technology transfer. While Chinese negotiators discussed these core issues in the initial talks, they did not propose a compromise.

One potential outcome is that China will purchase more American products, including natural gas and agricultural goods, which would help to reduce the deficit. Last month, Treasury Secretary Steven Mnuchin told CNBC: “They put on the table an offer of over $1.2 trillion in additional commitments. But the details of that still need to be negotiated. … This isn’t just about buying things. This is about opening markets to US companies and protecting US technology. Those are very important structural issues to [Trump].”

This would be a strategic move on China’s part; by extending an olive branch, Trump could claim a victory while Chinese interests are maintained.

The US is accusing China of stealing technology patents, copyrights, and trade secrets in IP to boost its economy. China denies this. Last Monday, the US Department of Justice charged Huawei with stealing trade secrets from T-Mobile and violating US sanctions against selling to Iran. Huawei denies this.

Al Jazeera’s Adrian Brown noted: “It remains to be seen whether a deal can be done between the two sides if Meng remains under house arrest in Canada pending extradition to the US.”

Nuclear Arms Treaty Falls Apart

This weekend, the US government announced its withdrawal from the nuclear arms control treaty due to alleged Russian non-compliance. Their withdrawal officially takes effect in six months, giving Russia a window of time in which to save the treaty. Instead, they followed suit, withdrawing the following day.

US Secretary of State Mike Pompeo said: “We have raised Russia’s non-compliance with Russian officials — including at the highest levels of government — more than 30 times. We have provided Russia an ample window of time to mend its way. Tomorrow that time runs out.”

In early December, the US said they would give Russia sixty days to destroy any weapons which they claim violate the treaty; that deadline expired on Saturday.

NATO Secretary General Jens Stoltenberg said Russia was “in material breach” of the treaty, saying that NATO “fully supports the US suspension [and] notification of withdrawal from the treaty.”

In a written statement issued by the White House, Trump said that Russia has violated the treaty “with impunity, covertly developing and fielding a prohibited missile system that poses a direct threat to our allies and troops abroad”, while the US has “fully adhered” to it.

He said on Friday that he is open to negotiating a wider agreement, possibly one which includes other countries: “I hope that we’re able to get everybody in a big and beautiful room and do a new treaty that would be much better. Certainly, I would like to see that.”

The Intermediate-Range Nuclear Forces Treaty (INF) bans ground-launched cruise missiles in the range of 500 to 5000 km. It was established in 1987, following the Cold War.

Nuclear weapons experts at the Carnegie Endowment for International Peace said that US withdrawal from the INF treaty will likely be counterproductive.

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