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Tuesday, May 15, 2018

Trump avoids shooting his own foot

Por qubano22005

Trump's outrages are sometimes inexplicable. His decisions are unreasonable, without logic or coherence. He may be acting consistently according to his “American First" but then he forgets his campaign slogan and proceeds as an entrepreneur, other times ... Either way, there is no explanation for his folly. Now and despite the declared trade war to China, in which billions of dollars are being lost from both sides, President Donald Trump ordered the Department of Commerce to help a Chinese telecommunications company to "be back on business," after preventing access to US suppliers. This poor one is nothing but the well-known telecommunications company and phone manufacturer ZTE, one of the most important in the sector in the Asian giant based in Shenzhen.

Contradictorily, only a few months ago the United States prohibited the Asian company from importing American components because it violated what was regulated by the Department of Commerce, referring to the economic sanctions against North Korea and Iran.

But Donald does not stop impressing us and only God knows what a strange business he’s coming up with. He twitted that he and Chinese President Xi Jinping are looking for the necessary ways to get ZTE back to the market and the strong competitive world of telecommunications. "Too many jobs have been lost in China. The Department of Commerce has been instructed to solve it!", he said on the social network.

The commentary was made just at a time when the United States has imposed strong restrictions on Chinese technology companies, especially to stop the Asian push in this sector, mainly in the telecommunications sector. But, apparently, ZTE's prayers have been heard. The Department of Commerce of the United States will seriously consider whether the request of the Asian company will be answered positively since it has a seven-year ban on doing business with US technology exporters.

ZTE had requested the reconsideration of the restrictions to the Department of Commerce, because the non-access to United States suppliers of essential components such as microchips threatened their survival in the market. Previously, the Asian company got a 1.2 billion dollars fine due to their business with Iran and North Korea.

Donald Trump is realizing the mistake he made when he started the first attack against Beijing in the trade war that has had in the imposition of tariffs its main weapon. After import taxes on solar panels and washing machines, Trump undertook it against steel and aluminum, raising the economic costs of the charges to 50 billion dollars. But Beijing did not remain arm-crossed and counterattacked and wounded the American economy, especially the agricultural sector and two of its key export products to China: pork and soybeans.

Even several economic analysts like Reuters ones predicted an increase in tariffs on cell phones, computers and other products that would make the United States reach the 100 billion dollars, without difficulty. According to the media, Americans would have to appeal to three broad categories within consumption: cell phones (44 billion), computer equipment (37 billion) and voice, images and data recorders (22 billion), to counteract the Chinese attack.

The forecasts have become reality; Trump's trade war has affected the US economy. The current is the time in which economy is too globalized and both buyers and suppliers are interconnected. The restrictions on the Chinese companies have caused the fall of the exports of manufacturers of micro components of the United States and logically, Donald Trump is bandaging the wound of his first strategic economic error.

As foreseen, not only Chinese electronics companies have been lacerated but also the American ones that have to export products like semiconductors, software and other supplies for their assembly in the Asian giant before being commercialized in the world. Meanwhile, other nations that sustain their economies by exporting electronics, say South Korea, Japan and Taiwan, were hit by the impact of the earthquake unleashed by Donald Trump.

Perhaps the president is trying to avoid the economic suicide he started and is trying to get rid of the rope around his neck renegotiating with China and, in return, he is showing himself generous and magnanimous with ZTE. According to Chad Bown, a researcher at the Peterson Institute for International Economics, Trump does not want to shoot his own foot.