The U.S. and the EU are working toward zero tariffs. What does it mean for the U.S.-China trade war?
「 believe, will enter a stage of extremely low, even zero-tariff. That will be a disastrous suppression and blow to China. 」
Trump might go full force with China on trade. What is his endgame?
「He has greater visions, part of which are never mentioned publicly. But his considerations have gone beyond trade and economy. 」
Can Russia and the U.S. be friends after all?
「Restoring the relationship with Russia would help the U.S. to focus on its main threat. So during Trump’s first term, restoring the relationship with Russia remains a great challenge. 」
Welcome to《 Zooming In》. I’m Simone Gao. The Western media has drawn numerous comparisons between Ronald Reagan and Donald Trump, from their unconventional rise to presidency to their unorthodox approaches in dealing with current affairs. On the surface, President Trump is not fighting the same war that Reagan did. For Ronald Reagan, it was the Cold War. For President Trump, it is the ongoing trade war. However, at the core of both wars is the unresolved ideological difference between the free world and the communist regime. In this episode, we’ll draw a deeper comparison by focusing on several deterministic factors for winning a war. What are these factors? In our view, they relate to U.S. strategic global alliances, the American people, and the president’s willingness to seize the day and make bold moves. Reagan did this and he made history. Will history repeat itself? Let’s take a look.
In 2013, former first lady Nancy Reagan told USA Today: 「As prime minister, Margaret had the clear vision and strong determination to stand up for her beliefs at a time when so many were afraid to ‘rock the boat.’ As a result, she helped to bring about the collapse of the Soviet Union and the liberation of millions of people.」
Donald Trump does not have an Iron Lady to help him in his trade war against China. European nations are upset with him for imposing steel and aluminum tariffs and for threatening to impose tariffs on auto exports.
President Trump demonstrated his willingness to single-handedly level the global trade playing field. On July 24 he tweeted, 「we are the『piggy bank』 that’s being robbed.」He is on a mission to end that.
Europe took notice of his tenacity, similar to how they noticed Ronald Reagan’s tenacity in pursuing his policy. History again repeated itself; On July 25, European Commission President Jean-Claude Juncker met with President Trump. They agreed to work toward「zero tariffs」 and start a new phase for the U.S.-EU relationship.
Trump: 「We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods. Thank you. Thank you. Thank you. We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans. Soybeans is a big deal. And the European Union is going to start, almost immediately, to buy a lot of soybeans. They are a tremendous market. Buy a lot of soybeans from our farmers.」
Jean-Claude Juncker（E.U. Commission President）: 「When I was invited by the president to the White House I had one intention, I had the intention to make a deal today, and we made a deal. 」
The latest change in the U.S.-EU relationship shows that China’s strategy of rallying Europe against the U.S. failed. Right before that, the Chinese yuan depreciated against the dollar. As of July 25, the yuan closed at 6.78 and lost 6.9% in three months. What does all this mean to China? I discussed these questions with former Peking University Professor of Economics David Xia.
蕭茗（Host/Simone Gao）：「這輪新的人民幣貶值您覺得是中共政權所為嗎？它給中美貿易戰帶來了什麼樣的影響？ 還有，川普和歐盟主席宣布謀求美歐之間零關稅。中共政權要如何應對呢？」
「 Do you think this new round of Renminbi depreciation was a move of the Chinese communist regime? What impact has it had upon the ongoing U.S.-China trade war? And Trump and the European Commission president announced they would work towards zero tariffs. How will the Chinese regime deal with that?」
「 Over the years, the value of Renminbi has been related to China’s real economy, its external economic environment, risks in its financial system, and money supply. So, as I criticized, this approach of the Chinese government — over-issuing currency — will certainly depreciate Renminbi significantly. This depreciation is a sure trend in both the middle and long term. Right now it’s so obvious in the short term that some doubt it is a move by the Chinese government. However, I don’t see much need for the regime to do so. What it might do at most is leave the currency uninterrupted. As we know, if Renminbi is depreciated too much, the authorities may use its foreign exchange reserve, say, in large amounts, buying Renminbi and selling U.S. dollars, to keep its currency stable and appreciated to a certain degree. But right now, there’s no such need. Yes, generally, depreciation will contribute to exports amid the U.S. trade war with China. However, we face a situation in which that method might not necessarily bring about huge interests as expected. It’s known that America’s stance means it will slap high tariffs on $500 billion dollars’ worth of Chinese imports. Therefore, China, by devaluing Renminbi, alone cannot successfully promote its exports in a usual sense. More importantly, President Trump and European Commission President Juncker issued a statement following their summit that both sides would remove trade barriers, tariffs, and any subsidies, thus creating a free trade zone with 『zero tariffs』，and 『zero subsidie』. Mind you, the total population of the two regions is 830 million, nearly 12 percent of the world’s population. And their GDP combined consists of 50 percent of the world’s. With such a titan free economy for free trade zone, if added up with Japan and some other trading powers, the majority of global economies, I believe, will enter a stage of extremely low, even zero-tariff. That will be a disastrous suppression and blow to China. Therefore, the Chinese regime will never change the dynamic, with such a minor scheme — depreciation.」
Coming up, what is China’s true economic and political status? Does President Trump see an opportunity President Reagan saw 32 years ago?
蕭茗（Host/ Simone Gao）：中國真實的經濟、政治現狀，比西方媒體感覺到的還要動盪得多。32年前，當里根總統洞察到蘇聯經濟多麼脆弱的時候，他毫不猶豫，採取了非常大膽的一步，使整個世界格局發生了天翻地覆的變化。那麼，歷史會重演嗎？讓我們首先重溫一下歷史，看看20世紀80年代中期究竟發生了什麼。
China’s true economic and political state is much more turbulent than what the Western world perceives. 32 years ago, when President Reagan gained insight of how vulnerable the Soviet Union’s economy was, he didn’t hesitate to make a decisive move to bring down the whole thing. Will history repeat itself? Let’s first revisit what happened in the mid 1980s.
1983年3月，里根總統宣佈了戰略防禦計畫（SDI）， 該計劃很快成為談判的目標。 1986年10月，里根和戈爾巴喬夫在冰島會談。 戈爾巴喬夫在軍備控制的幾乎各個方面都提出讓步，但條件是美國必須放棄戰略防禦計劃。 里根拒絕了戈爾巴喬夫所提的條件，會談不歡而散。但是，會談使里根得出一條關鍵性結論：蘇聯懼怕美國的戰略防禦計畫。隨後，里根將這個計畫的預算增加了兩倍，很快導致了美蘇軍備競賽的終結，以及蘇聯的解體。 今天，當川普總統對500億美元、然後可能2000億美元，甚至可能5000億美元的中國商品徵收關稅時，他是否發現了一個類似於32年前里根總統發現的那個機會呢？
In March 1983, Reagan announced the Strategic Defense Initiative (SDI). SDI soon became the target of negotiations. In October of 1986, Reagan and Gorbachev met in Iceland. Gorbachev proposed concessions in nearly every area of arms control but under the condition that the U.S. would give up its SDI program. Reagan refused the conditions and walked away with an important insight — that the Soviet Union feared his program. Reagan then tripled America’s SDI budget, which soon brought the arms race to an end and led to the collapse of the Soviet Union. Today, when President Trump put tariffs on 50 billion dollars of Chinese goods and then possibly 200 billion and then possibly the total of 500 billion, does he see an opportunity similar to the one Reagan saw 32 years ago?
In the West, we hear news about China on a daily basis, but we still don’t see the turbulence building behind China’s Great Firewall.
On July 25, the yuan fell to its lowest of the year after Beijing announced that it would pursue a more vigorous fiscal policy. Despite the policy-driven stock market bounce in 2018, China’s economic thermometer ——「the Shanghai Composite index」has been trending downward through June 2018.
On the same day, a Reuters article revealed that 4000 high net worth investors rushed to banks and occupied them. Management teams from four private equity firms under Shanghai Fu Xing disappeared over the last month. As a result, investors cannot redeem their investments. Fu Xing has $30 billion in assets under its management, one of the largest players in the Chinese market. This is only the latest example of ownership and management disappearing with investors’ money. A general observation is that China’s macroeconomic status does not support the high-yield promises made by these private equity firms. The bubble will burst in the future.
On July 13, news broke that many public places took down Chinese leader Xi Jinping’s posters from their lobbies. By the following week, news spread that the elites and some high CCP officials established an agreement to take down Xi Jinping from his position. Although Xi embarked for Africa as scheduled, indicating he is not in immediate danger of being deposed, the consensus is that he encountered strong resistance within the party.
Also in July, Chinese inspectors announced Changchun Changsheng Biotechnology, China’s largest vaccine maker, had violated safety standards. A rough estimate indicated that a quarter of a million faulty vaccines had been administered to children. This news went viral on Chinese social media, as news like this continues to erode public confidence on food and service safety. Desperately, parents in China took their concerns to the U.S. embassy website to seek support.
蕭茗（Host/ Simone Gao）：民眾的抗議，政治謠言的傳播，無不讓中共面臨的壓力與日俱增。事實上，強勁的經濟增長已經成為支撐中共統治合法性的唯一來源。如果貿易戰能夠擊破這一假像，中國可能會發生劇烈的政治變革。難道川普現在面臨的是32年前里根遇到的相同的局面？讓我們來聽一聽夏業良教授的看法。
Public outcry and political rumors all point to the mounting pressure the Chinese Communist Party faces. In fact, strong economic growth has been the only source of legitimacy for the Communist Party’s rule. If the trade war undermines that, China could go through drastic political changes. Is Trump facing the same situation that Reagan did 32 years ago? Let’s hear from David Xia again.
蕭茗（Host/ Simone Gao）：「川普現在準備好了再給2000億的中國商品加關稅。您覺得他真的有可能最後給所有中國商品加關稅嗎？如果這樣做，他最終想達到的目的是甚麼？」
「Now Trump is ready to place tariffs on an additional $200 billion of Chinese imports. Do you believe he is likely to impose tariffs on all Chinese products? If he does so, what would be his final goal?」
「 In fact, Trump has shown almost all his cards. The purpose of his doing so is to deter China or give it a harsh warning, hoping China will not take any confrontational, retaliatory responses. In that case, tensions will naturally ease up. But, if China vows tit-for-tat responses, a trade war will escalate so that both sides will endure significant losses. As I repeatedly stressed, America’s strength wouldn’t be critically undercut. But China wouldn’t be able to endure consequences of this war. Some have doubts: Given his background as a businessman, does Trump only care about commercial interests? I don’t think so. He has greater visions, part of which are never mentioned publicly. But his considerations have gone beyond trade and economy. As an admirer of President Reagan, I’m convinced Trump is no less capable when compared with any of his predecessors in terms of international patterns and strategies. So, give him time and opportunity. And we’ll see he’ll come to greater accomplishments in many fields. 」
蕭茗（Host/ Simone Gao）：「面對川普施壓，中方一再使用激怒川普的方式做回應。您覺得習近平對中美貿易戰到底持什麼態度？他會在國內外的雙重壓力下進行根本性的改變嗎？」
「 Because of pressure from Trump, Chinese authorities repeatedly responded in a provoking manner. What’s Xi Jinping’s attitude towards the U.S.-China trade war? Will Xi make a fundamental change under pressure, both domestic and abroad?」
「 Well, Xi Jinping — it’s said — received only an elementary education. He’s a fake doctorate degree holder. Further, his character is somewhat reckless, unlikely to listen to others. So, he’ll be stubborn and stick to his ideas until his collapse. Despite pressure, resistance or challenges from within the party over his dictatorship or personality cult, he has renewed another purging campaign and restored his grip on power. Recently, support for his personality cult and dictatorship has resumed. He chose this moment to visit the Middle East and African countries as scheduled, marking his confidence over his control of power. He had to make sure there’s no danger or crisis in store for him before his visit. However, many hope that Xi will choose to follow President Chiang Ching-kuo as an example towards constitutional democracy. Under huge pressure, domestic and abroad, will he do it? My answer is very definite: Never.」
Coming up，How can improved U.S.-Russia relations help the U.S. in its trade war with China?
在中美之間不斷升級的貿易戰中，川普總統在赫爾辛基會見了俄羅斯總統普京。 兩位領導人在之後的聯合新聞發布會上稱這是一次成功的會談。 但是川普總統因其言論涉及俄羅斯幹預2016年大選之事，立即招致民主黨黨員和共和黨黨員的批評。川普說，他「不知道為什麼會是俄羅斯幹涉大選」。 第二天，總統說他說錯了，他本意是想說：「我看不出什麼理由為什麼不會是俄羅斯。」
Narration: Amidst the escalating trade war between the U.S. and China, President Trump met with Russian President Vladimir Putin in Helsinki. Both leaders called it a success during their joint press conference afterwards. But President Trump immediately faced criticism from both Democrats and Republicans for his comments relating to Russia’s interference in the 2016 election, where he said he「didn’t know why it would be Russia that interfered」. The next day, the president said he misspoke and meant to say,「I don’t see any reason why it wouldn’t be Russia.」
He later tweeted,「I’m very concerned that Russia will be fighting very hard to have an impact on the upcoming election. Based on the fact that no president has been tougher on Russia than me, they will be pushing very hard for the Democrats.」
Because of ongoing Russian cybersecurity threats, many were surprised when President Trump invited Putin to the White House.
7月16日，在一檔CNN電視節目《The Situation Room》中接受主持人沃夫·布利哲採訪時，參議員蘭德·保羅為總統進行了辯護。
In a July 16th interview on the Situation Room with Wolf Blitzer, Sen. Rand Paul defended the president.
Senator Rand Paul ：「I think that it is a good idea to have engagement. And I think that what is lost in this is I think that there’s a bit of Trump derangement syndrome. I think there are people who hate the president so much that — this could have easily been President Obama early in his first administration setting the reset button and trying to have better relations with Russia. And I think it’s lost on people that they are a nuclear power, they have influence in Syria, they’re in close proximity to our troops in Syria, they are close to the peninsula of North Korea, and they have some influence that can help us there. Another thing that’s lost — and people forget this completely — the Russians tried to help us stop the Boston Marathon bombing. We actually did help them stop a terrorist attack in St. Petersburg because of communicating and exchanging information.」
蕭茗（Host/ Simone Gao）：重塑美俄關係確實會在多個方面幫助到美國，包括敘利亞問題、伊朗問題、和朝鮮問題。不過，從另一個角度上看，同樣也會在美中貿易戰中助美國一臂之力。雖然俄羅斯對美國構成威脅，但中共當局對美國的威脅則大得多。所以，針對俄羅斯和中國，川普究竟會採取什麼策略？他是否會達到自己的預期目的？以下是我對資深政論家文昭先生的採訪。
Indeed, resetting U.S.-Russia relations could help the United States in a variety of areas, including Syria, Iran, and North Korea. But looking at it from a different angle, it could also help the U.S. in its trade war with China. Although Russia still poses a threat to the United States, the Chinese regime is a much bigger one. So what exactly is President Trump’s strategy towards Russia and China? And can he accomplish it? I spoke with senior political commentator Wen Zhao about it.
蕭茗（Host/ Simone Gao）：「川普總統重建美俄關系的目的是什麽？ 會讓美國在中美貿易戰中占據有利地位嗎？」
「 What is President Trump’s purpose in restoring relations with Russia? Would it give America any advantage in the trade war?」
「 The Trump administration views China as its primary opponent. Restoring the relationship with Russia would help the U.S. to focus on its main threat. Although it’s still difficult to accept Russia’s annexation of Crimea, from a global strategic perspective, Russia isn’t a real opponent for the U.S. Russia has a population of 146 million, more than twice that of South Korea. Its land area is 170 times that of South Korea’s. However, its economy ranked behind South Korea in 2017. It’s difficult for Russia to make waves. For Russia to become a world power again, it first needs to re-integrate all former Soviet Union countries. This will be difficult to accomplish during Putin’s lifetime. So Russia has a long way to go before it can be considered an equal to the U.S. But Russia is one of the five permanent members of the United Nations Security Council. To push Russia to Beijing’s side is not a wise strategy. Russia interfered with the U.S. election in 2016. The U.S. won’t let go of that even though Russia would not admit or apologize for it. So during Trump’s first term, restoring the relationship with Russia remains a great challenge. 」
蕭茗（Host/ Simone Gao）： 「中俄有可能成為盟友嗎？」
「 Could China and Russia become allies? 」
「Taking a long-term view beyond 10 years, China and Russia lack strategic support to form an alliance. The main reason is that China will find it hard to form close economic ties with Russia. Mutual benefits for China and Russia are only restricted to a few political topics. Geographically, Russia’s neighbors are economically weak, such as Mongolia and North Korea. Northeast China is slightly richer, but in recent years, it is economically shrinking. The wealth level is far behind coastal provinces and many inland provinces. Russia borders with many poor regions, which means that they won’t stimulate economic growth in Russia. Recovery in Russia will continue to depend on Europe. The trade relationship between China and Russia is also very simple. China purchases energy resources from Russia. However, due to its shale oil technology, the U.S. now is a large exporter of oil and natural gas. It becomes questionable from a cost-benefit perspective for China to purchase energy from Russia. After the Crimean crisis, China and Russia signed large contracts to purchase energy. Within China, though, there isn’t agreement on this; some believe that purchasing more expansive energy from Russia, purely based on political motive, isn’t really beneficial to China. Another key factor is population. Because of the long-term recession, the far East population continues to flow to Europe. This causes anxiety for the government since it’s difficult to control. So Russia remains suspicious of China, given its growing population. Lastly, China continues to compete with Russia to gain influence over the countries that became independent from the former Soviet Union. All these factors make it challenging for Russia and China to form a long-term stable alliance. 」
蕭茗（Host/ Simone Gao）：僅僅在30年前，統治著蘇聯這片土地和人民的獨裁者們還坐在談判桌前，與美國面對面談判。那時候，他們看起來非常強大，不可一世。冷戰結束兩年後，蘇聯解體了，里根總統一改前任徐而圖之的外交政策，為那個時代龐大的蘇共政權的垮臺鋪平了道路。如今，川普會為美國再次帶來同樣的榮耀嗎？這一次，俄羅斯將會作何選擇？在譜寫歷史的時刻，人民又會作何抉擇？感謝您收看本期的《世事關心》， 我是蕭茗， 下周再見。
Only 30 years ago, dictators who ruled over the land and people of the Soviet Union sat at the opposite end of the negotiating table with the U.S. They appeared strong and terrifying. Two years after the Cold War ended, the Soviet Union dissolved. Reversing his predecessor’s détente foreign policy, Reagan paved the way for the collapse of the behemoth communist regime of his day. Will Donald Trump achieve the same glory for America again? This time, which side will Russia choose? How will the people choose sides in the making of history? Thanks for watching Zooming In. I’m Simone Gao. See you next week.
Writer：Simone Gao Michelle Wan Jess Beatty
Editors：Julian Kuo Bin Tang Melodie Von
Narrator: Rich Crankshaw
Transcription: Jess Beatty
Translation：Frank Yue Michelle Wan Bin Tang Guiru Zhang
Special Effects：Harrison Sun
Assistant producer：Sherry Chang Bin Tang Merry Jiang
Host accessories are sponsored by Yun Boutique
New Tang Dynasty Television