David P. Goldman: Southeast Asians Prefer U.S. and Japan to China but Need ‘Alternative to One Belt, One Road’

The portrait of late communist leader Mao Zedong is seen behind a Chinese military honour guard as they wait for the start of a welcome ceremony for Cambodia's Prime Minister Hun Sen outside the Great Hall of the People in Beijing on May 16, 2017. Hun Sen is on a …
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Economist and Asia Times columnist David P. Goldman joined SiriusXM hosts Rebecca Mansour and Joel Pollak on Monday’s Breitbart News Tonight to discuss President Donald Trump’s trade negotiations with China and other Asian nations.

As Goldman explained, the Trump administration has been at pains to portray this process as an intense “negotiation,” while the president’s critics and much of the media warn about a looming “trade war.” The stock market seemed to render its verdict on Tuesday having one of its best single-day performances ever, reversing weeks of losses due to “trade war” apprehension:

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“The problem you have with tariffs is that after so many years of China dominating high-tech trade by means fair and foul, the global supply chains are so hooked up to China that to separate this out is really like separating Siamese twins,” Goldman mused.

“It’s a very costly and difficult thing, and if you simply slam down tariffs to make it very hard for people to import things from China, this would disrupt a very large number of U.S. businesses, particularly tech,” he continued. “So the initial reaction was panic and one of the worst days we’ve had in years – worst weeks, rather; last week was a free fall on Thursday and Friday.”

“Clearly, that’s not what the administration wants,” he said. “They want the Chinese to make concessions that would go a long way to meeting our requirements.”

Goldman saw President Trump accomplishing that objective with his customary style of opening negotiations very strong and seeking to rattle the other side before working out a favorable compromise. He observed that the appointment of National Security Adviser John Bolton, who has “said some extremely tough things about, for example, Taiwan and North Korea,” could have been either a deliberate or inadvertent part of Trump’s cage-rattling strategy.

Goldman said, contrary to belligerent rhetoric from a few officials, China does not want a trade war and will likely follow its ancient tradition of “bribing barbarians who appear on their border” to appease Trump.

“Their long-term goal is to dominate the world economy by being first in high tech and by controlling this huge region of trade and investment they call ‘One Belt, One Road,’ which is really the Sinification of the whole Eurasian continent,” he explained.

Goldman added that China is well aware it faces a serious image problem with prospective economic partners.

“Everyone hates them,” he argued. “They don’t have to be demonized. They’re going to the Europeans and saying, ‘The United States is starting a trade war. Why don’t we do a free trade zone?’ They won’t get anywhere because no one trusts them.”

“I was just in Southeast Asia,” he said. “I talked to a number of Southeast Asian leaders who said, ‘Why don’t you and the Japanese, you Americans, come to us and give us an alternative to One Belt, One Road? We don’t like the Chinese. They’re rotten to deal with. We’d much rather deal with Americans and Japanese, but you don’t have an offer on the table.’”

“The Chinese are formidable, clever, hard-working, disciplined people,” Goldman added. “They’ve achieved economic miracles. They’re not supermen. We can beat them if we do the things America does best. I think the president has made a great start. He’s got the Chinese scared, and he’ll get an improved deal. But I want to emphasize it’s only a start. It’s more emphasis on defense than on offense. I’m looking for the offense.”

Goldman described the “offense” measures as proactively investing in the research and development of cutting edge technology, as the United States historically has done, to maintain a technological edge militarily and economically over China.

Goldman found the current moment to offer a unique opportunity for hitting China while it is on defense, notably due to the crisis caused by its client state, North Korea.

“The Chinese do not want destabilization of the Korean Peninsula. They don’t want starving refugees in North Korea pouring over their borders if the North Korean regime crashes. They don’t want a war. They figure they can get what they want in peacetime, and they want to make sure that Kim Jong-un is on the program. He’s going to be meeting with President Trump, of course,” he said.

For these reasons, Goldman found it a “reasonable guess” that the Chinese government has summoned Kim Jong-un to Beijing to “tell him not to be crazy,” as speculation about a mysterious train arriving from North Korea holds.

Goldman found it unlikely that America and South Korea will be able to persuade North Korea to give up its nuclear weapons program entirely.

“They point out that Qaddafi gave up his nuclear program in 2009. In 2011, American-backed rebels butchered him. As a matter of regime insurance, they’re going to keep it, but they agree to stop testing in public, to stop threatening people, to stop saber-rattling, and just be quiet for a while and maintain the status quo,” he predicted.

Goldman judged that at the present moment, China probably needs the U.S. more than the U.S. needs China.

“They’re hoping to be in a position where they’ll need us a great deal less as they develop their trade relations through Asia,” he said. “Intra-Asian trade is growing much faster than Asia’s trade with the rest of the world. It’s not simply China selling us toasters and TVs, as they did ten years ago. It’s China selling high-speed trains to Thailand and Singapore and so forth. I think they’re trying to get to the point where they can really break free of dependence on the U.S., but at the moment, they still need us.”

Goldman applauded President Trump for taking China on at what could be the last moment in which the United States has significant leverage.

“I think he’s used a blunt instrument, and it’s a dangerous thing to use a blunt instrument. I think what he’s done is incomplete. There’s a lot more to do. But I applaud him for being the first president since Reagan to lay the law down to China and call them out on their misbehavior.”

Listen to the full audio of the interview above. 

Breitbart News Tonight broadcasts live on SiriusXM Patriot 125 weekdays from 9 p.m. to midnight Eastern or 6 p.m. to 9 p.m. Pacific.

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