‘The US trade policy is a mess’ - Brahma Chellaney from the Center for Policy Research

Brahma Chellaney, Professor of Strategic Studies from the Indian think tank the Center for Policy Research discusses the trade tensions between the world’s largest economies, US and China, and how it affects the global trading system.

“We’ve had the pretence of the ruled-based order, but what we are seeing now is that pretence is falling. Both China and the US are pursuing aggressive unilateralism,” Chellaney says. “Both believe in flouting international rules.”

Although the sides decided to put the trade war “on hold” and drop the tariff threats, Chellaney says the lull “will not last for long.” 
While Washington and Beijing agreed on increasing US energy and agriculture exports to narrow the US trade deficit with China, “the real American demand on China is not about the farm produce, it’s about high technology.” The US is “concerned about China’s Made in China 2025 programme,” designed to boost China’s hi-tech industries.

“Trade is not about trade only; it’s about politics. And if the politics is not right for one party, then we will not see fair trade. In the China-US relationship, the Americans still have an advantage,” Chellaney says, as they wield a “greater leverage to get the Chinese to accept their major demands.”

“The US trade policy is a mess because Trump has created confusion on several fronts and in terms of American allies by refusing to permanently exempt the EU, Japan, Canada from steel and aluminium tariffs.” While this confusion prompts “American allies to rethink their relationship with the US,” other countries will seek “to reshape their trade alliances, to form new relationship, to reduce their dependence on certain countries.”

Tune in to see the complete edition of Worlds Apart with Brahma Chellaney.