Welcome to the April 7th edition of “News Insight,” where we uncover the news with special guest, senior political and economic commentator Wu Jialong, hosted by Zhang Dongxu.
Today’s focus: Is Trump Blocking All Tariffs to Clean the Foundation of the CCP? Taiwan Needs to Understand More than Just Removing Tariff Barriers! America is prioritizing industrialization again, can Taiwan help? Is this the effect of the economic war launched by the US against China? Did Trump calculate that the CCP would make the wrong move?
The Biden administration acknowledges that the post-Cold War international order has come to an end. Trump’s retaliatory tariffs are interpreted as an attempt to rebuild a new order in the world economy after World War II and reshape global division of labor. This has caused significant drops in the US and Asia-Pacific stock markets. Trump firmly emphasizes that there is no turning back on the policy, with over fifty countries in discussions with the White House, Taiwan proposing five major strategies, and China retaliating with six major measures. What is Trump’s real agenda and bottom line?
During the Biden era, Secretary of State Blinken publicly stated in September 2023 that the international order after the Cold War has ended, and new challenges await in this new era. With the World Trade Organization being manipulated by China, the direction of the economic and trade order remains uncertain.
On April 2nd, Trump imposed reciprocal tariffs, declaring a national economic state of emergency, marking this as America’s “economic independence declaration” and launching an “economic revolution.” Trump stated on the 6th that he had spoken with leaders of many countries, but as long as there exists a trade deficit, no agreement will be reached. Some analysts describe Trump’s actions as a comprehensive “reset,” akin to creating a new version of the Bretton Woods system and reshaping the global division of labor.
▶ Let’s ask Professor Wu Jialong for his observations.
The US declared a national state of emergency, resulting in stock market plunges. Trump insists on his policies with no turning back, urging the nation to withstand this time.
JPMorgan Chase has raised the probability of a US and global economic recession from 40% to 60% this year. Goldman Sachs reports that the probability of a US economic recession has increased from 20% to 35%. However, US Treasury Secretary Benson stated that he does not believe tariffs will lead to a US recession.
▶ Let’s ask Professor Wu Jialong for his insights.
Trump’s imposition of reciprocal tariffs has led to discussions with over 50 countries. However, China’s firm retaliation with six measures differs from its previous stance. Trump quickly tweeted that China is panicking and cannot afford the retaliation. He also indicated on the 6th that no agreement with Beijing would be reached unless the enormous US-China trade deficit is resolved.
Previously, foreign media revealed that the US is restructuring its economic and trade processes, with China attempting to rally other countries against the US. However, it appears that China is retaliating almost unilaterally as of now.
▶ Let’s ask Professor Wu Jialong:
(1) How do you perceive the apparent unfolding of cards between the US and China?
(2) US Treasury Secretary stated that China’s commercial model and economy are the most imbalanced and unequal in modern world history. It’s difficult to change under CCP rule, but Trump’s tariffs disrupt China’s commercial model. What does this signify?
Trump’s reciprocal tariffs are causing ripples, with various commentators and economists in Taiwan sharing diverse perspectives online. The Taiwan government’s response includes injecting 88 billion Taiwanese dollars to stabilize industries and gain public support. President Lai Ching-te has been holding meetings with industry representatives for two consecutive days, presenting five major strategies to the public on the 6th. Taiwan does not plan to retaliate with tariffs and aims to negotiate with the Trump administration, starting with zero tariffs akin to the North American Free Trade Agreement (NAFTA).
▶ (1) Let’s ask Professor Wu Jialong how Taiwan should perceive and respond to these changes. How do you view President Lai’s five major strategies?
(2) The Trump administration should have foreseen the rise of anti-China sentiment in Taiwan and elsewhere under the threat of tariffs. What’s your take on this?
(3) In light of NAFTA, does this imply that Taiwan is willing to closely align with the US on China’s restrictions and tariffs?
Trump has indicated plans to release semiconductor policies. The US Commerce Secretary mentioned that Trump will impose taxes on semiconductors and aims to bring semiconductor manufacturing back from Taiwan to the US. Last week, there was news that TSMC and Intel are forming a joint venture in the US for semiconductor manufacturing.
▶ Let’s ask Professor Wu Jialong how Taiwan should adapt to the global semiconductor division of labor orchestrated by the US, as the US believes the current situation is out of balance and seeks to dominate the global redivision of labor.
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