It was the United States that started a sanctions war with Russia in an attempt to “punish” it for Ukraine, US election meddling, and other invented “wrongdoings.” Now it needs Russian weapons for its military, but cannot buy them legally as a result of its own policy. US foreign-military advisers, as well as Special Operations Forces (SOF) personnel involved in clandestine operations, need the weapons for specific missions, and they want them promptly and in the quantities they need. How does the US solve this problem? It decides to manufacture these weapons domestically without any permission, agreements, licenses, or anything. It needs nothing of the sort. It believes that intellectual property (IP) rights should be respected everywhere in the world but the United States — the country that gets what it wants while conveniently forgetting  all the international rules and norms. This is a prime example of the egregious violation of Russia’s IPR by the United States.

As the National Interest put it, “So US Special Forces Command, which oversees America’s various commando units, has an idea: instead of buying Russian weapons, why not build their own? That’s why USSOCOM is asking US companies to come up with a plan to manufacture Russian and other foreign weapons.” The goal is to “develop an innovative domestic capability to produce fully functioning facsimiles of foreign-made weapons that are equal to or better than what is currently being produced internationally,” according to the USSOCOM Small Business Innovation Research proposal.

Indeed, the US Special Operations Command (SOCOM) has hired contractors to build US-made analogs to Russia weapons: the 7.62x54mm PKM light machine gun and the 12.7x108mm NSV “Utes” heavy machine gun. Defense contractors in US-friendly countries, such as Ukraine and East European nations that once belonged to the Warsaw Treaty Organization, have a different reason for their inability to provide alternative sources. Producing the weapons in the US is the best way to solve all the problems related to logistics and supply chains. It guarantees the homogeneity of the parts. Naturally there is no talk of paying licensing fees or royalties to Rostec, the Russian State Corporation to Facilitate the Development, Production, and Export of Advanced Technological Industrial Products. And if the production goes well, why not sell the US-manufactured Russian weapons abroad, all the while lecturing other countries on the importance of respecting copyrights? Meaning American copyrights.

The Drive cited SOCOM’s  2017 contracting announcement, which stated, “Foreign made weapons lack interchangeability and standardization which hinders field and depot level part replacement.” It further explains that “Developing a domestic production capability for foreign like weapons addresses these issues while being cost effective as well as strengthens the nations [sic] military-industrial complex, ensures a reliable and secure supply chain, and reduces acquisition lead times.”

One way to counter Russia’s legal claims and accusations of intellectual-property theft is to say that these guns only “resemble” PKMs and NSVs, but are not direct copies thereof! This prompts the question — why can’t Chinese producers or those accused by the US of IP theft in other countries do the same? This isn’t stealing — there are just a few occasional similarities, but it’s all homemade and there is nothing to worry about. Will the US accept such “explanations”?

There are more examples. Kalashnikov USA, a Florida warehouse, is producing “Made in America” AK- 47 Kalashnikov automatic rifles. SOCOM also is seeking American companies to sign contracts to produce AK-47s and ammunition. Russian medium and heavy machine guns, as well as 14.5mm aircraft guns, are included in the this solicitation. Naturally, the Americans may want to produce the magnificent Kalashnikov AK-308 automatic rifle that was showcased at the Russian Army-2018 exhibition that took place in August.

Indeed, the US-backed groups in Syria would attract less attention if they carried Russian, not American, arms. A lot of fighters in conflict-ridden countries are familiar with Russian weapons. It’ll be much harder to see exactly who is behind them if they’re carrying Russian weapons.

While the US imposes sanctions on China for legally buying Russian weapons, it is illegally producing them and its companies are encouraged to continue, with no threat of sanctions from the government.

US National Security Adviser John Bolton was very kind to issue a warning on Oct. 31 at an Alexander Hamilton Society event that China is most likely stealing Russian intellectual property in order to sell copycat weapons systems for a lower price at some point in the future. Thank you for sharing this valuable information, Mr. Bolton! Just one little question to clarify, what is the US doing building Russian weapons illegally? We get it, Mr. Bolton, this is just another example of the pot calling the kettle black.

So, the United States is blatantly violating Russian intellectual property rights. It could have done everything officially and bought a license, for instance, but it has not. This kind of behavior will inevitably tarnish the US reputation worldwide. But Washington is making an effort to get its hands on the best. This unseemly practice confirms the fact that Russia is the global leader in the production of weapons of unparalleled quality that are in high demand worldwide, including in the United States. This is the best advertisement for the Russian defense industry anyone could dream of.

The EPA creates a large free-trade area (FTA) with no tariffs whatsoever, encompassing almost a third of the world's GDP and 600 million people. Now that the deal has been signed, it will also apply to the UK during the two-year Brexit transition period that will begin in March 2019. 

The “mega-trade” deal will affect 40% of global trade (up to 70% in high-tech sectors). A drop in prices is likely to boost spending and spur growth. The European Union annually exports more than $100bn (£75bn) in goods and services to Japan. EU agricultural exports could increase by up to 180%.

The Japanese computer, electronic, and automobile industries are all expected to benefit. The prices for Japanese cars will decline in Europe, as import tariffs are gradually reduced to zero. The EPA includes modern provisions that apply to property rights (IPR), labor protections, a procedure for settling accounts, and a commitment to the Paris Agreement on Climate Change — the one rejected by the United States. 

The news about the signing of the EPA contrasts starkly with the tariff wars launched by Washington. On July 15, President Trump called the EU a “foe” that takes advantage of the US in trade. The United States rattled international markets by threatening a trade war with China. Washington imposed 25% tariffs on $34 billion of Chinese goods, and Beijing was quick to retaliate. Henceforth EU officials and Japan will present a united front against US tariffs on steel and aluminum. In turn, China is offering to join forces with the EU in an effort to stand up to the US trade policy.

The United States had been in talks with Japan and other Asia-Pacific countries on the Trans-Pacific Partnership (TPP) trade agreement before President Trump made the decision to unilaterally withdraw.  Washington has abandoned the talks on the Trans-Atlantic Trade and Investment Partnership (TTIP) and insists on rewriting NAFTA. 

Meanwhile, the EU and Japan continue to discuss the Strategic Partnership Agreement (SPA), the EPA’s political twin, which will soon be finalized.  The SPA will consolidate all areas in which the parties are politically engaged into a binding agreement to facilitate those joint efforts on such issues of mutual concern as North Korea.

Brussels and Singapore have committed themselves to promoting the ratification of their 2014 trade and investment deal by the end of 2018.  The EU plans to launch FTA negotiations with Australia and New Zealand, making that alliance the driving force that is propelling the global process of integration.

The Comprehensive Economic and Trade Agreement between the EU and Canada (CETA) took effect in September 2017.  The eleven remaining TPP partners, including Australia, Mexico, and Vietnam, signed the agreement, which has been renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in March, leaving the US on the sidelines. The deal applies to a market of nearly 500 million people.  America could be a big loser, forgoing a boost to its GDP of 0.5% (worth $131bn). If those eleven join the EU-Japan agreement, the world will drastically change.

There are other examples of regional integration happening in the world. Despite Western sanctions, Russia is part of that process. The Russia-led Eurasian Union has an FTA with Vietnam and is negotiating similar agreements with several countries, including India, Iran, Indonesia, and Singapore. In May, another milestone event took place that was undeservedly left out of the media spotlight.

China signed a free trade agreement (FTA) with the Eurasian Economic Union (EAEU) in Astana, Kazakhstan. This turns the EAEU-China into a unified zone that sits between Europe and Japan. Goods can be transported from Japan to China by sea and then via train through Kazakhstan, Russia, and Belarus directly to the borders of the EU. The two trade entities could easily agree to make this happen.   Russia’s Northern Passage could also become a trade route for shipping goods from Japan to Europe and vice versa.

A new world order is emerging without the US. Washington’s prominence is waning as the global integration process gains traction while America marches out of step.  The US just cannot imagine a world it does  not dominate. It made the fundamental mistake of adopting a policy of arms twisting, insisting that others dance to its tune or else. Now other actors are shaping the economic and political world map while the US is gradually losing its status as the global leader that is essential to any integration process.

After earlier negotiations this month appeared to avert a clash, the Trump administration is back to full trade war mode. With fiery language, the US president and his trade advisors said they have run out of patience with what they claim to be “predatory practices” by Beijing.

For its part, China quickly hit back, condemning “unacceptable blackmail” by Washington. Beijing said it will not hesitate to respond in kind with counter-tariffs on American exports.

Markets in Asia, Europe and America tumbled, with companies and investors panicked by the prospect of a full-blown trade war between the world’s two largest economies, and the uncertain repercussions from such a titanic clash.

Trump is gambling big time. He is betting that China will be the “first to blink”, as the New York Times reported. That’s because the Trump administration reckons that with China’s huge trade surplus, Beijing has much more to suffer financially if it goes toe-to-toe with the US in a trade showdown.

“China has a lot more to lose than we do,” said Trump’s trade advisor Peter Navarro, who is a hawk when it comes to dealing with Beijing. Navarro, like Trump, has continually accused China of ripping off the American economy and workers through alleged unfair trade practices and theft of intellectual property from US tech companies.

During his election campaign, Trump fired up voters with tirades slamming China for “raping America”. Recently, the president railed against “China taking $500 billion out of our economy every year”.

But typical of Trump, the emotive charges and figures are not what they appear to be.

For a start, the US economy has been running a chronic trade deficit with the rest of the world for the past four decades. That’s largely because of a structural change in American capitalism whereby US companies and investors bailed out of the country to set up in cheaper labor territories, such as China.

To accuse China of being the problem is a deceitful distraction from the way American capitalists have historically cheated US workers with layoffs and downsizing. One of those capitalists profiting very nicely from setting up in China is Donald Trump’s daughter Ivanka whose clothes business profits from manufacturing in China and exporting to the US, thereby contributing to the American trade deficit.

Another issue is that whatever complaints the Trump administration may have about trade with China it should settle those disputes through the legal mechanisms of the World Trade Organization. If Trump thinks he has a case against unfair Chinese practices then he should trust the multilateral trading authority. Otherwise it’s a recipe for international chaos and a slippery slope to conflict, as history has shown.

But, as with many other facets of this administration, there is a contempt for multilateralism, and a resort to high-handed unilateralism. Rules, laws, what’s that? As one White House official was quoted recently as saying of the Trump’s administration’s attitude towards the rest of world: “We’re America, bitch!”

Trump is playing hardball with China in the belief that its bullying will see Beijing cave to its demands for rectifying trade imbalances. The Americans are trying to solve their structural, inherent flaws by strong-arming China into making concessions. Because China’s $500 billion annual exports to the US are about four-fold what the US sells to Beijing, Trump is betting that his Mad Max approach will scare into submission.

Trump’s browbeating manner is also grandstanding for his voter base in rustbelt states, who might feel a patriotic surge in sticking it to the Chinese. Mid-term congressional elections in November are no doubt on Trump’s mind to get the Republican vote out.

However, the president’s best laid plans are in danger of veering into a political train wreck.

Beijing has said it will not back down to intimidation. In an editorial in the Global Times, which reflects government thinking, the tone was combative: “It is US arrogance to believe that a trade war will exhaust China. But the boot is on the other foot. Trade is mutually beneficial to both the US and China. Scuppering bilateral trade would cause similar suffering to both sides.”

The options at Beijing’s disposal could wreak havoc for the US economy and Trump’s political future. Trump’s inability to see that speaks to his and his advisors’ petulance.

If China goes ahead with threats to impose counter-tariffs on US agricultural products, such as soybeans, corn and meat, the impact on farm states like Iowa, Idaho and Illinois across the mid-west will be severe. Voters from these states were crucial to Trump getting elected to the White House in 2016. By taking the US into a trade war with China, Trump will end up hitting his own political base hardest.

Another repercussion is higher retail prices for consumer goods like televisions and footwear imported from China, if Trump slaps on punitive tariffs. That will inflate consumer prices and crimp household budgets, especially among the lower-income population, who again tended to vote for Trump. Net result is that the fragile American economy would likely tank from cash-strapped consumers, who are already living on the edge. 

The far-reaching injurious effects of a trade war seem to have escaped the Trump administration’s planning. The president seems to have been carried away with a hubristic notion of American power and an irrational ideological hostility towards China. It’s all very well for him and his rich advisors to antagonize China over perceived wrongs. What about ordinary Americans though? So much for the famed deal-maker. Trump’s short-term recklessness betrays someone who is playing tiddlywinks instead of chess.

Yet, in this accounting, the real pain hasn’t even begun. China’s ultimate trade weapon is its massive holdings of US Treasury bonds. With nearly $1.2 trillion-worth in holdings of US federal debt, China is by far the world’s largest creditor for Washington. US-based news outlet Bloomberg calls it Beijing’s “nuclear option”.

“It can just stop buying US Treasury debt,” warns Bloomberg. “China is the world’s biggest Treasury investor, keeping US borrowing costs low, helping us buy more stuff from China. Ending this symbiotic relationship just when US budget deficits are soaring would devastate the US economy.”

Bloomberg adds that such a “doomsday” option “could blow up” China’s economy too. It compares the abysmal scenario to “mutually assured destruction”.

Arguably though, such mutually devastating economic consequences for China are moot. It has the alternative sphere of Eurasian economic integration and the new Silk Roads it has busily been building with Russia and others over the past decade.

If Trump pushes Washington’s belligerence too far with Beijing, the economic ramifications will be wide-ranging and dire for the globe.

China may just survive to trade another day with the rest of the world.

But one thing seems sure. With its chronic debts, deficits and dodo-like dollar, America will be ruined beyond salvation. Ruined by a president who brags about his “art of the deal”.

Flanked by two giant television screens and bathed in a sea of blue light, President Xi Jinping chose his words carefully. But at the end of his speech at the Boao Forum on the idyllic island of Hainan, there was no doubt who they were aimed at.

Amid the promises and anti “Cold War” rhetoric, there was one overriding theme that Xi weaved through his keynote address to a packed audience of global leaders.

Slicing through the jargon, it was that China was a safe and reliable partner while the United States was not.

Making his first public speech since the escalating tit-for-tat trade dispute with the US, he talked about further opening up the world’s second-largest economy at what has become known as Asia’s Davos.

“China’s door of opening up will not be closed,” he said in the stunning southern China resort on Tuesday. “Human society is facing a major choice to open or close, to go forward or backwards.

“In today’s world, the trend of peace and cooperation is moving forward and a Cold War mentality and zero-sum game thinking is outdated,” he told the forum. “We must [always] refrain from seeking dominance [by rejecting] power politics.”

Planned tariffs

Obviously, the last reference was directed at US President Donald Trump. During the past two months, he has targeted Chinese imports and announced planned tariffs amounting to US$50 billion amid concerns about a spiraling trade deficit and intellectual property rights issues.

Last week, Beijing hit back with similar proposed duties on an array of US products and vowed to stand its ground in a row that threatens to spill over into the broader global economy.

Against this backdrop, Xi talked about “respect” and “dialogue” to solve problems and the dangers of building “barriers” when it comes to trade across the planet.

“We need to treat each other with respect and as equals, respect each others’ core interest and major concerns, and follow a new approach to state-to-state relations featuring dialogue,” he said. “We live in a time with an overwhelming trend towards openness and connectivity.

“[We must] stay as determined as ever to build world peace, contribute to global prosperity and uphold the international order,” he added.

But within the broad brushstrokes, there were layers of substance and promises.

Xi pledged to lower imported car tariffs this year, and open up further the financial and insurance industries, which indirectly address complaints by Washington in the simmering trade spat.

“China does not seek a trade surplus. We have a genuine desire to increase imports and achieve a greater balance of international payments under the current account,” he said, according to a translation of the speech reported by the state-owned news agency Xinhua.

“[We will] quickly relax restrictions on foreign shareholding, especially the restrictions on foreign investment in the automobile industry. And we hope developed countries will stop imposing restrictions on normal and reasonable trade of high-tech products, and relax export controls on such trade with China,” he added.

Apart from “significantly” lowering import tariffs for cars and other products, Xi also guaranteed a crackdown on intellectual property rights infringements.

This has become a crucial issue and not just in the White House. Global companies feel they have been cajoled into handing over detailed tech specs, or IPR, before they can get a business foothold in the country.

“[In 2018,] we will reorganize the State Intellectual Property Office to strengthen law enforcement,” Xi told the forum.

Foreign-funded enterprises

“We encourage Chinese and foreign companies to carry out normal technical exchanges and cooperation to protect the legitimate intellectual property rights of foreign-funded enterprises in China,” he added.

Still, most of these promises have been made before after a succession of working papers, which are probably gathering dust in an anonymous gray government building in Beijing.

Last year, the European Union Chamber of Commerce in China spelt out its frustration with Xi’s administration with two, succinct words: “promise fatigue.”

Indeed, what actual concrete steps are taken after this speech will be closely followed by the movers and shakers in the audience, including Christine Lagarde, the managing director of the International Monetary Fund.

“I read much of that speech as being about cementing China’s regional leadership as an open country fostering free trade and development,” Jim McCaughan, the CEO at Principal Global Investors, a global leader in institutional asset-management, told Bloomberg Television. “The idea that there is going to be a quick fix on this is unlikely.”

Sounds like another dose of “promise fatigue.”

atimes.com

It appears that President Trump is going to get his much-desired trade war with China. Citing the country’s harmful intellectual property and innovation policies, President Donald Trump on Thursday announced the pending imposition of tariffs on $60 billion worth of imports as well as restrictions on Chinese investment. Trump may have painted his bullseye on Beijing, but much of the pain from this opening salvo is sure to be felt closer to home. As a result of these measures consumers and businesses will be forced to pay higher costs for needed goods while the economy will be deprived of foreign capital.

Notably, this collateral damage is unlikely to be in the service of any great victory, with the Chinese providing no indication that they are prepared to do anything other than dig in their heels and retaliate in kind. Although Trump may not be able to read the trade tea leaves, Wall Street had no such difficulty, dropping over seven hundred points following the administration’s announcement.

So far the White House’s action has all the hallmarks of a blunder.

Even those who the move is meant to help think the administration’s approach is a mistake. A senior member of the U.S.-China Business Council—a group which represents U.S. firms doing business with China—warned earlier this week that tariffs “do more harm than good in bringing about an improvement in intellectual property protection for American companies” operating in China and that a more narrowly focused effort would be preferable.

Other groups sure to be caught in the U.S.-China crossfire have also registered their concerns with the National Retail Federation, whose members sell many products imported from China, noting that Trump’s tariffs will “punish ordinary Americans for China’s violations.”

Then there is the small matter of the retaliation that seems sure to follow. Indeed, amidst reports that the Trump administration has not provided Chinese officials with a requested to-do list of items that could de-escalate the matter, Beijing may not see any other option. If so, China faces a number of possibilities for its hit list. Perhaps the most obvious target would be farm products, which would both hit a major U.S. export and Republican-leaning voters in agricultural states. Soybeans in particular appear to be a prime candidate, with roughly one-third of those grown in the United States—approximately $14 billion worth in 2016—destined for China. Aircraft is another strong possibility, accounting for $15 billion in U.S. export revenue and inflicting bipartisan pain given Boeing production facilities in both deep blue Washington state and crimson red South Carolina.

American firms may not profit from a trade war with China, but both Airbus and Brazilian farmers have to be salivating at the prospect.

None of this is to deny that legitimate grievances with Chinese government policy exist. Beijing is among the world’s foremost practitioners of policies which force technology transfers as a condition for doing business in the country and its record of safeguarding intellectual property rights is far from stellar. Few observers would argue that these are not real and ongoing issues.

Unilateral measures, however, appear unlikely to accomplish their desired goals, with China having shown no great willingness to adopt reformist measures in response to unilateral foreign hectoring or punishment. In contrast, complaints brought through the World Trade Organization (WTO) have prompted Beijing to adopt more market-friendly policies in numerous instances. Furthermore, unlike the United States or European Union, China has never ignored WTO rulings that found its practices to be in violation of their member obligations. While it appears the Trump administration will supplement its tariffs and investment restrictions with a WTO complaint against China, the process is sure to be more fraught than would otherwise be the case given its latest moves.

Another possibility for resolving matters would be for the United States to revisit its stalled negotiations with China over the conclusion of a Bilateral Investment Treaty. Meant to address many of the issues that currently plague U.S.-China economic ties, the treaty could help not only to resolve current tensions but also serve as a venue for working through future issues that may arise.

Instead of these more low-key approaches, however, President Trump—a veteran of the entertainment industry with a flair for the dramatic—has opted for a game plan designed to burnish his tough-on-trade credentials but which lacks an exit strategy. Trump’s stated belief that trade wars are easy to win may be quickly put to the test. So far this has all the makings of a quagmire. Let’s hope the president reconsiders before it’s too late.

nationalinterest.org

A trade war solely on economic terms would be politically and legally problematic for Trump. But not if it could be couched in resolving a global security problem with «rogue state» North Korea and its historic ally China.

It seems more than a coincidence that the US war of words with Communist North Korea should escalate at the same time that Trump is making moves to hit China with sanctions over alleged trade malpractices. This week, Trump ordered an investigation into allegations of Chinese theft of American intellectual property rights and, more widely, unfair trade policies which supposedly give China’s exports an advantage over US goods.

The trade investigation ordered by Trump could result in the imposition of steep tariffs on Chinese exports to the US. The US administration has already reportedly begun ratcheting up trade barriers on Chinese aluminum and steel products. If the Trump administration goes further in slapping on commercial sanctions, Beijing is warning that a full-blown trade war could erupt between the world’s two biggest economies.

China has also warned that there should be no linkage between the Korean security crisis and the trade disputes with the US. «North Korea and trade are different issues,» said China’s foreign ministry spokeswoman Hua Chunying. «Using one issue as a tool for exerting pressure on the other is clearly inappropriate.»

Trump, however, has repeatedly linked the two issues. He has openly remonstrated with Chinese President Xi Jinping «to do more» to rein in China’s North Korean ally over its development of nuclear weapons and ballistic missiles. And Trump has explicitly referred to America’s $500 billion annual bilateral trade with China as leverage on Beijing to take a tougher line on Pyongyang. China has rejected claims that it is not doing enough to restrain North Korea’s weapons program. It points to the recent UN Security Council vote earlier this month to hit Pyongyang with tighter economic sanctions, for which Beijing claims it will bear the biggest cost in terms of lost trade with its east Asian neighbor.

Following the latest round of new UN sanctions, the war of words between Washington and Pyongyang reached alarming levels last week. Trump threatened North Korean leader Kim Jung-un that his country would «face fire and fury the like of which the world has never seen» if it continued with missile tests banned by the UN. North Korea hit back saying that it was drawing up a plan to fire four mid-range ballistic missiles near the US territory on the Pacific island of Guam, where 7,000 American military forces are based.

Even US media and politicians were perturbed by what they saw as Trump speaking recklessly off the cuff. Fears of all-out war breaking out reverberated across the US, the Asian region and the world. China and Russia urged for calm diplomacy. Over the weekend, President Xi entreated Trump in a phone call to prioritize peaceful diplomacy with North Korea.

Also over last weekend, no less than five senior Trump administration officials sought to tamp down anxieties that the world was moving towards a nuclear war. CIA director Mike Pompeo and National Security Adviser HR McMaster both insisted in US media interviews that war was not imminent. Also, in a visit to American ally South Korea, General Joseph Dunford, the Chairman of the US Joint Chiefs of Staff, assured South Korean President Moon Jae-in that diplomacy, not war, was Washington’s priority in dealing with North Korea.

Then in a coauthored op-ed in the Wall Street Journal, Secretary of State Rex Tillerson and Defense Secretary James Mattis wrote that Washington was not seeking regime change in North Korea. Rather, they said, US was engaged in a «peaceful pressure campaign» for denuclearization of the Korean Peninsula.

While all the senior US figures publicly said they supported Trump’s use of harsh rhetoric towards North Korea, their coordinated intervention on the subject suggests a strenuous effort by Washington to dial down the war of words that Trump had unleashed.

So, was Trump simply being a reckless blowhard over North Korea, or is there something else going on?

Perhaps Washington really does not want a war with North Korea at this juncture given the political repercussions. The impact of such a conflagration would be catastrophic. The population of North Korea is about 25 million. Would Trump’s vow of «fire and fury» be prepared to inflict such devastation? The capital of South Korea, Seoul, has alone a population of 25 million, located near the Demilitarized Zone with North Korea. If the latter were to open up its extensive artillery batteries, let alone fire a nuclear missile, the death toll would be colossal. Politically, the US would not be able to sustain such horrific responsibility.

That brings us to the question of why Trump appears to be stoking the crisis with North Korea, if war is not the objective.

Associated Press reported over the weekend that «despite the bluster in public» the Trump administration «has been quietly engaged in backchannel diplomatic communications with North Korea over the last several months». Officially, the two countries do not have diplomatic ties, but they have over the decades since the Korean War (1950-53) used the UN mission in New York as a secret contact point. AP reported that the Obama administration had negligible communications with the North Koreans, but that «the contacts quickly restarted after Trump’s inauguration».

This raises the suspicion that Trump’s testosterone-charged sparring with Kim Jung-un is a show. Sure, it is a reckless show, given that a miscalculation or stray word could be misconstrued and lead to a military attack, precipitating a wider war involving a catastrophic nuclear exchange. But if the Trump administration has been holding backchannel communications with Pyongyang, as the AP report indicates, then what is the sudden blow-up in antagonistic rhetoric really about?

Trump’s transactional worldview is notorious. He sees everything through the lens of bottomline profit and being a «business winner».

The tycoon-turned-politician probably cares little about whether North Korea has nuclear weapons or not. After all, during his election campaign last year, Trump raised eyebrows when he suggested that Japan and South Korea should acquire their own nuclear arsenal in order to save America money.

What bothers Trump more than anything else is the crippling US trade deficit with China. Last year, the US-China trade imbalance stood at $350 billion in Beijing’s favor, according to the US Census Bureau. For comparison, the US had a deficit with the entire European Union of nearly $150 billion. The US economy has been in the red with the rest of the world since at least the late 1980s, when offshoring American jobs by US corporations became fashionable. The US total trade arrears – importing more than it exports – is around $740 billion, according to official figures. That is a measure of a very sick and poor American economy, which Trump has staked all his supposed business prowess on rectifying.

Blaming the deep, chronic structural problems of American capitalism on China’s «unfair trading» is a politically expedient rallying call for nationalist politicians like Trump. During his election campaign, Trump railed against China for «raping American workers». But the fact is that it is speculative capitalists like Trump who have got rich by offshoring American jobs to cheap-labor places like China over the past 30 years.

President Trump simply can’t overhaul the chronic trade deficit that the US has with China and the rest of the world. Because it is a structural problem inextricably rooted in the moribund state of American capitalism.

Politically, Trump can’t start a trade war with China – or anyone else like Germany and the EU – over mere economic issues. A gratuitous trade war would make Washington run afoul legally with the World Trade Organization. Unilateral American trade sanctions against rival economies looks like a «sore loser» not a «winner».

This is where the Korean crisis seems to be play into Trump’s economic game plan with China. By whipping up that crisis over alleged nuclear security concerns, Trump is trying to put China on the defensive over appearing to not do enough to rein in North Korea. By undermining China as a sponsor of «rogue state» North Korea, the Trump White House seems to be using that as moral authority for sanctioning China’s economy.

Those sanctions would otherwise be seen as American bullying, but if such moves are couched in rhetoric of «punishment» for not doing enough to secure the world against «North Korea’s nuclear madness» then the Trump administration can claim that it is acting «benevolently» on behalf of world security.

Bottom line for Trump is: Stoke North Korea crisis in order to sanction China’s economy – for the purpose of bailing out a failed American economy.

And, in doing so, Trump’s attitude seems to be «never mind the collateral damage of a possible nuclear war». Such is the risk-taking of a wheeler-dealer capitalist like Trump.

Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books

With the release of leaked documents from the TTIP (Trans-Atlantic Trade and Investment Partnership) ‘trade’ deal Greenpeace framed its conclusions more diplomatically than I will: the actions of the U.S. political leadership undertaken at the behest of American corporate ‘leaders’ and their masters in the capitalist class make it among the most profoundly destructive forces in human history. At a time when environmental milestones pointing to irreversible global warming are being reached on a daily basis, the U.S. political leadership’s response is to pronounce publicly that it favors environmental resolution while using ‘trade’ negotiations to assure that effective resolution never takes place.

Those representing the U.S. in these negotiations are mainly business lobbyists who have been given the frame of state power to promote policies that benefit the businesses they represent. The thrust of the agreements is to enhance corporate power through legal mechanisms including patents, intellectual property rights and ISDS (Investor-State Dispute Settlement) provisions that create supranational judiciaries run by corporate lawyers for the benefit of corporations. Shifting the power to regulate greenhouse gas emissions to the corporations producing them precludes effective regulation in the public interest. The position that environmental harms must be proven before regulations are implemented leaves a dead planet as the admissible evidence.

U.S. President Barack Obama is both the most articulate American politician urging action on climate change and the central Liberal proponent of the trade agreements. The apparent paradox isn’t difficult to understand— the trade agreements will be legally binding on signatory states while Mr. Obama’s statement of the problem won’t be. As evidence of global warming mounts the Republican tactic of denial is looking more and more delusional. By articulating the problem Mr. Obama poses Democrats as the solution while handing the power to curtail greenhouse gas emissions to business lobbyists and corporate lawyers.

History is important here: the claim of ‘anthropogenic,’ or human caused, climate crisis universalizes the consequences of capitalist production when the carbon emissions that are causing it can be tied through both history and geography to the rise of capitalism. While the ‘industrial revolution’ began in England, it was the second industrial revolution and more particularly, U.S. industrial production since the end of WWII, that is responsible for the exponential increase in carbon emissions behind global warming. At this stage the addition of China as major carbon emitter can be tied largely to its exports to the West.

The spread of capitalist production makes global warming very difficult to resolve. Were the U.S. and developed Europe the only material greenhouse gas emitters, capitalist logic would be inexorably linked to its product. However, the spread of this production has naturalized it by creating the illusion of the universality of both stuff lust (commodity fetish) and the social mechanisms for producing it. The environmental implausibility of seven billion people driving cars and living in McMansions has given way to the local logic of manufactured wants motivating an entrenched economic order.

The rise of neo-liberal ‘state capitalism’ infers a period that never existed when state and economic power were separate and distinct. It is hardly an accident then that ‘free-trade’ agreements codify the relations of state and corporate power. Following from Bill Clinton, Barack Obama’s sleight-of-hand is to pose the TPP (Trans-Pacific Partnership) and TTIP ‘agreements’ as economic policies when their intent is to cede political control to large corporations. Social understanding is gradually moving from corporations being political actors through campaign contributions to their being political entities that decide public policy through these ‘trade’ agreements.

The real paradox in play is between democracy and capitalism. ‘Trade’ deals are profoundly anti-democratic in that they cede civil control to ‘private’ corporations. Policies that maximize profits for corporations and their owners do so by reducing or eliminating democratic control over civic life. In civic logic ending human life on the planet is Dr. Strangelove-level insanity. In the realm of capitalist logic we all benefit from the stuff that capitalism produces, so what is the problem? The Liberal claim that ‘we’ can have both the stuff of capitalist production and environmental security through ‘smart’ capitalism ignores the ‘private’ control of the public realm inherent to capitalism.

What is made evident by the documents leaked by Greenpeace is that electoral politics are largely irrelevant to the business of ‘governing.’ The U.S. representatives negotiating ‘U.S.’ trade positions no more represent your and my interests than do the business executives selling us products. The public’s role in elections is as consumers of political rhetoric. Hillary Clinton’s willingness to say anything to win election reflects that her ‘product’ is political rhetoric and that it will bear no relation to her actual policies once the ‘sale’ is made. More profoundly, were Bernie Sanders to be elected his ability to govern in the public interest would be bounded by institutions dedicated to supporting ‘private’ interests.

In this sense Mr. Obama’s willingness to articulate positions on climate resolution, economic justice and concern for ‘human rights’ while doing the opposite is his skill as a political ‘leader.’ As long as this system is considered legitimate it will confer political legitimacy back on those elected. The oft heard complaint that elections don’t change anything depends on the ‘anything’ under consideration— the choice between Hillary Clinton and Donald Trump is ‘consumer choice’ politics. The choices not available through electoral politics are: ending the threats of climate crisis and nuclear weapons, placing economic justice as the central role of Western governments, ending wars of choice while de-militarizing the West and creating new forms of democratic participation.

The logic of ‘smart’ capitalism proceeds from the base conceit that people want the stuff of capitalism and that capitalist production is the way to get it. History locates this want as a consequence of capitalist propaganda undertaken in the U.S. in the early twentieth century – it is no more ‘natural’ than a toaster oven. The aggregating logic of capitalist ‘efficiency’ produced the environmental aggregates of global warming and climate crisis. The capitalist logic of more capitalism to resolve the consequences of already existing capitalism proceeds from the premise that manufactured wants need to be met rather than simply not manufactured. Current ‘trade’ deals rely of these manufactured wants as a form of political control by the corporate class. The choice is ours to reject manufactured wants in favor of self-determination. As the capitalist class understands, doing so would end capitalism and the economic order it represents.