Tencent's "First Line" author Wang Danwei from New York
"This is not a trade war."
US President Trump signed a presidential memorandum on March 22nd in the US East, which will impose large-scale tariffs on goods imported from China and restrict Chinese companies from investing in the United States. The scale of Chinese goods involved in taxation can reach 60 billion US dollars.
In the White House, Wilbur Ross, who played a pivotal role in trade policy, said in an interview with the US media that raising tariffs on China was not a trade war but a beginning to solve trade problems. The decline of US stocks on the day is the market's reaction to uncertainty, not the exclusion of tariff increases.
Wilbur, who is extremely dissatisfied with the existing trade agreement, told Tencent that "the United States has been sitting at the negotiating table for a long time."
In Wilber's eyes, how to use existing conditions to cover up the weaknesses of the United States and formulate new trade rules that are beneficial to the United States is more important than arguing for you in existing rules.
But in the eyes of most economists, taxation does not help improve Americans' livelihoods, but may harm the interests of most Americans.
Have the opportunity to find Trump at any time
Wilbur, who had not yet become the US Secretary of Commerce, "China" and "trade" is what he often talks about. Before entering the White House as Trump cabinet, Wilbur, who is nearly 80 years old, works at WL Ross & Co, a private equity fund located in the prime location of the Manhattan Financial Center.
Wilbur loves collecting, and his company's works of contemporary artists from all over the world are everywhere. The most prominent position in his own office is a painting by a Chinese artist, Liu Bolin. In August 2016, Wilbur said before Tencent's "First Line" in this painting, this painting always inspired me to think about China.
In Liu Bolin's paintings, the Chinese army, air, land and air force three women's team flag guard team in the square, Liu Bolin, known as the "city invisible man", dressed himself as a worker's image, between female soldiers.
"You see the female soldiers in the paintings flourishing. What's interesting is that they don't have weapons. The squares of the artists are standing on the ground like a construction site."
Wilbur believes that this is a microcosm of China's rapid economic development. It is both vibrant and somewhat sloppy in some details. Any economy will encounter difficulties in its transformation, and the structural problems in China's transformation are business opportunities in the eyes of Wilbur.
Wilbur has the title of “Reorganization King†in the United States. He is good at reorganizing bankrupt companies in different industries. He has successfully revitalized steel, coal, telecommunications, multinational investment companies and textile companies after reorganization, and he has profited from it. .
In 2005, Wilbur invested heavily in China's troubled textile industry. In a dialogue with Tencent's "First Line" in 2016, Wilbur said that he is closely watching how the Chinese government handles overcapacity, especially for China's steel industry.
At the end of 2016, the 79-year-old Wilbur ushered in another career peak. Wilbur, who had endorsed Trump in the early days of the election, was nominated as the Minister of Commerce by the new president, becoming the oldest politician in the history of the United States.
The origins of Wilbur and Trump can be traced back at least to the 1980s. At that time, Trump's casino business in Las Vegas, USA was poorly managed and was on the verge of bankruptcy. After several rounds of negotiations with Trump on behalf of the investors, Wilbur decided to let Trump continue to control the casino.
The next friendship or private exchange between the two is not known, but what is certain is that they have a lot of ideas in the business field, and Trump is the person Wilbur can pick up on the phone. In 2016, when Trump and Hillary were in the right to fight, Wilbur repeatedly publicly praised Trump. He told Tencent that "the first line" said that Trump is very presidential.
Formulating new trade rules that benefit the United States
Rather than saying that such public praise is a bet on the risk of a politician, it is better to say that Wilbur seeks political support for his business judgment. Wilbur, who has been in the trade and commodities industry for decades, is not a trade protectionist. What makes him uncomfortable is the existing trade rules.
At the Davos Summit in January 2018, Wilbur took the lead for the upcoming Trump speech and told the global elites present, "Don't take it out of context and listen carefully to the president's speech."
During the meeting, Wilbur once again said to Tencent's "First Line" that he likes trade. All the policies to be introduced in the future are aimed at changing the current trade agreements that are unfavorable to the development of the United States. "These trade agreements have a common feature: the United States made major concessions in the initial stages of their drafting and negotiation, but the implementation did not meet the standards."
Trump’s speech was exaggerated and bold, and Wilbur’s statement was low-key and sophisticated. In the eyes of Wilbur, Trump also does not oppose international trade. "In the face of public speech, Trump sometimes has to dramatize his own meaning, but from the policy details and technical point of view, what I just said is I really talked about when I was an economic consultant to Trump."
For example, Wilbur said that there is a structural problem in the current WTO (World Trade Organization). The United States is the only country in the world that has no VAT (Value Added Tax). This item caused the US company to lose 15% to 20% on the books.
After the signing of the presidential memorandum on March 22, Wilbur said in an interview with the US media that he knew that the market would react greatly, but this will not be the end of the world. "The $60 billion of goods will come to the economies of China and the United States. Said to be a slap in the face."
But before that, in the United States, 45 industry associations representing the interests of the US retail, technology, agriculture and other consumer goods industries urged the Trump administration not to impose tariffs on products imported from China on March 18, otherwise it would damage American business and consumer interests.
At the Global Market Initiative IGM Forum at the Booth School of Business in Chicago, 43 top economists also publicly warned that taxation does not help improve American livelihoods, but may harm the interests of most Americans.
However, when Trump signed the memorandum, he said that there will be more policies. In the face of local industrial products that may be hit, 000,061, aerospace, technology, etc., Wilbur said that there is no progress without sacrifice.
Trump’s main basis for the tariff decision came from the “301 investigation†launched last year. In August 2017, the US Trade Representative Office issued an announcement to officially launch an investigation into China with the aim of finding out whether “the Chinese government’s policies and measures are unreasonable to the US’s trade interests in terms of technology transfer, innovation and intellectual property protection. Discrimination or damage."
The 301 investigation originated from Article 301 of the US Trade Act of 1974. This provision authorizes the US Trade Representative to initiate an investigation into “unreasonable or unfair trade practices†in other countries and may recommend the US President to impose unilateral sanctions after the results of the investigation.
Chad Bowen, a senior researcher at the Peterson Institute for International Economics in the United States, said that in this investigation, the US government is both a police officer, a prosecutor, a jury, and a judge.
Wilbur, who is extremely dissatisfied with the existing trade agreement, told Tencent that "the United States has been sitting at the negotiating table for a long time."
IP (intellectual property) is the most favorable card in the United States, but in fact IP is also a barrier in nature, and trade treaties often follow.
The trade war is about the current situation, and the two countries are vying for the resources they have had, and ultimately they will lead to self-reliance or a victory. In the eyes of Wilbur, how to use IP to incite the existing system, cover up the weaknesses of the United States, and formulate new trade rules that are beneficial to the United States may be more important than the competition in the existing rules.
(Editor: Cui Chen HX015)
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