US Economic Terrorism, Trade Wars Have Consequences

TEHRAN (FNA)- Iran’s Foreign Minister Mohammad Javad Zarif couldn’t be more accurate when he described new US sanctions against Iran as "economic terrorism," warning of “consequences" if the US keeps up its pressure against the Iranian nation.

In his words, "If the United States decides to cause so much pain on the Iranian people by imposing economic warfare, by engaging in economic terrorism against Iran, then there will be consequences. We don't differentiate between economic war and military war. The US is engaged in war against us, and a war is painful to participants. We have a very clear notion that in a war, nobody wins. In a war, everybody loses, [but] the loss of some will be greater than the loss of others."

This is not the first time that the US is torching the international order and it won’t be the last.

The US is no longer playing an internationalist role it used to play in trade and finance, security and environment. This new policy has had profound effects on global security and prosperity, while friends and foes bear the consequences.

Courtesy of the Trump administration, the US has torn up many international pacts. It has walked out of the nuclear arms control treaty with Russia, called the Intermediate-Range Nuclear Forces treaty, even if it risks sparking a new nuclear arms race.

To this end, Trump cares little if in his ruinous trade war with China there are also losers on both sides of the Pacific, or global markets grapple with a tariff war that seems to benefit no one or protectionism in the form of tariffs on Chinese goods is actually hurting the US economy, companies, and consumers. He likewise doesn’t care if the International Monetary Fund is warning that his trade wars and economic terrorism could sink business and financial market sentiment, derail global energy supply chains, and subtract the projected recovery in global growth.

Regrettably, Trump's one-man foreign policy, executive orders, disruptions, and measures against the rules-based international order are not limited to trade wars and economic terrorism. Under pressure from Washington, Japan and Russia are yet to formally end their World War Two hostilities. Japan refuses to conclude a peace treaty with Russia, which depends on the fate of the islands of the South Kuril Ridge. Tokyo refuses to guarantee that after a deal is reached the islands won't be populated by US military personnel.

In this hostile environment, if you think that's all there is to it, you are mistaken. The 11th Ministerial Meeting of the Arctic Council on May 6-7 in Rovaniemi, Finland, was all about "scientific collaboration, cultural matters, and environmental research trade" before the Trump administration pushed it off the cliff.

Secretary of State Mike Pompeo showed up and trashed the party by a brash speech plagued with lies and baseless accusations against Russia, China, and Arctic countries. He even threw the kitchen sink at the participants to make sure they didn't reach a formal Ministerial Declaration at the end of the long-anticipated meeting.

These are just some of the recent examples that discern how the Trump administration is doing everything it can to uptick the international order through diplomatic vandalism. They put in view how the US has become a rogue state and trashed its own leadership and engagement in international affairs. The US government is increasingly playing a confrontational role in the world, making sure countries do not get along with each other on any issue of regional and international concern.

This provocative policy is designed to maintain unipolarity and prolong geopolitical tensions in the Middle East as well. The disorders and distrusts the core axis of this policy has created, or the way regional institutions and treaties have been made obsolete, will only worsen in places like Iraq, Syria, Afghanistan and Yemen.

The official Washington should realize that in this hostile environment, other countries won’t sit on their hands. They will adopt a similar confrontational strategy toward the US and its wasteful agendas in trade, security, and energy. It makes no sense for other countries to conduct their activities in accordance with international law, regional security arrangements, and trade agreements, if the same shared commitment doesn't exist in Washington.

In response to Trump's decision to bin the nuclear deal and impose sanctions, Iran has warned to end its compliance with two particular obligations of the 2015 nuclear deal in coming weeks. Russia has slapped economic and financial sanctions on American businesses and officials, and might restart low-yield nuclear tests. China has imposed tariffs on American goods and might cut off rare earth minerals exports to the US as a countermeasure in the escalated trade conflict. Others are also imposing their own tariffs on American goods.

As it turned out, foreign policy changes along with circumstances. In most cases, many countries cannot control the behavior of Washington and its economic terrorism, trade wars, diplomatic shenanigans, and insecurity arrangements and policies, but they can always choose how they respond to them. Many are responding in kind.

Trump launches new round of attacks on Europe

By Hossein Ziaee*

Following a three-month-long truce in the trade war between the world powers on the two sides of the Atlantic Ocean (declared after European Commission President Jean-Claude Juncker and US president struck an unexpected deal and averted an all-out trade war following a meeting at the White House), Donald Trump launched a new round of attacks on Europe in a recent interview with CBS, American English language commercial broadcast television.

Apparently, Trump is, in no way, willing to leave this trade war incomplete and abandon the behind-the-scene goals – to dissolve the EU – he pursues by waging it.

In his recent interview, he repeatedly described European treatment of the US as ‘hostile’ and said nobody in the world mistreats the US worse than Europeans do. 

Trump’s remarks, more than anything else, are indicative of his strong resolve to end US strategic partnership with Europe.

In fact, he seeks to, by widening the political gap between the US and Europe, have more freedom in pursuing his protectionist policies on international level without fulfilling Washington’s international commitments stemming from the US alliance with Europe following World War II (1945).

In other words, Trump’s insistence on its unilateralism in international arena and efforts to stay away from Europe, indicate that he is following much more dangerous objectives, which is a matter of serious concern for Europe. 

A poll conducted by one of Germany’s largest insurance institutions, known as R+V, showed that more than 70 percent of the Germans maintain that Trump and his foreign policy, particularly toward Europe, is the biggest threat to them.

In his interviews with German Media, the country’s Minister of Foreign Affairs, Heiko Maas, always maintains that the only way Europeans would be able to counter Trump’s intimidating manner and policies is through maintaining their integrity and unity and mounting all-out resistance against him.

Maas explicitly announced that, in the trade war with the US, Europe should not give in to Trump’s threats, stressing that “we should remind Trump” that he cannot lead the EU toward dissolution and disintegration.

In fact, this latest remark by Maas implicitly discloses the main goal pursued by Trump’s continued war against Europe: The dissolution of the EU.

Since coming to power as US President, Trump has adopted organized aggressive and hostile approaches toward Europe relying on a policy based on fueling the trade war against and promoting racism in the continent to prepare the grounds for the dissolution of the union at any cost.

Europeans have, however, strongly resisted such policies by staging demonstrations and maintaining their unity and integrity. In case they continue their resistance, the White House will have to retreat and stop such efforts.

*Hossein Ziaee is a freelance journalist.

The dangers of Trump’s worldwide trade wars

By Ameen Izzadeen

Trade between nations makes them interdependent and lessens the propensity to war. The more trade any two nations have, the more peace will there be between them. Building peace is one of the goals of the World Trade Organisation, the premier international body set up in January 1995 to ensure free and fair trade between nations.

But instead of peace, we are now witnessing a world war or, to put it more precisely, a world trade war. Unlike in shock-and-awe hot wars, in economic wars, killer weapons such as bunker-busting missiles, banned white phosphorus, depleted uranium and napalm bombs are not used. Yet economic wars kill – kill millions. In Iraq during the decade-long United States-sponsored international sanctions, one million Iraqis, half of them children, died due to lack of medicine and food. Asked about the deaths of 500,000 Iraqi children due to sanctions, the then US Secretary of State Madeleine Albright said, “This is a very hard choice, but the price… is worth it.”

The present world trade war has nothing to do with the WTO. Rather, it was solely the work of one man, Donald Trump, who appears to be thriving in chaos. Unfortunately, he is also the President of the United States and is increasingly proving that he is a misfit to govern a country that has produced great statesmen such as George Washington, Abraham Lincoln and Thomas Jefferson, to name a few.

The tentacles of his trade war have reached many fronts – China, the European Union, Canada, Mexico, Russia, Iran and, this week, Turkey, for he thinks trade wars are good and winnable.
Sounding more like a trade-war version of an Adolf Hitler, than a knee-jerk protectionist, Trump tweeted on March 2, 2018: “When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore--we win big. It’s easy!”

Trump triggered what is termed by some analysts as the world history’s biggest trade war when he slapped in January a 25 percent tariff on imported steel from China, Europe, Canada and Mexico, prompting tit-for-tat measures from the affected countries. The escalation of the trade war is shaking the foundation of free trade.

Last month he imposed a further US$ 34 billion worth of tariff on imports from China. In retaliation, China also imposed US$ 34 billion worth of tariffs on US goods and warned Beijing would not hesitate to hit back dollar-for-dollar if Trump took further action.

If this was not enough, Trump this week targeted Turkey, imposing punitive duties on that country’s aluminium and steel exports. The measure was connected to Turkey’s refusal release a US preacher, who Turkey says is complicit in the 2016 botched coup attempt against the Recep Tayyip Erdogan government. Following Trump’s punitive measure, Turkey’s economy has taken a beating, with its currency, lira, losing 20 percent of its value.

Adding more chaos to the world trade order, Trump has reimposed sanctions on Iran. Apart from dealing a blow to Iran’s economy, the sanctions have also hit developing nations owing to soaring fuel prices. Last week, the Trump administration also imposed sanctions on Russia over the alleged nerve-agent poisoning of an ex-Russian spy and his daughter in the British town of Salisbury. Russia has described the sanctions as “a declaration of economic war” and warned of a fitting response.

Why is the US waging a trade war? Probably, Trump and his hardline advisors are caught up in a Thucydides trap, a term popularised by American political scientist Graham T Allison. Quoting Thucydides, the fifth century Athenian historian, Allison in a New York Times article last year explained that when a rising power – in this instance, China -- causes fear in an established power – in this instance, the US -- it escalates towards war. Thucydides wrote: “What made war inevitable was the growth of Athenian power and the fear which this caused in Sparta.”

With the world powers being armed with planet-pulverising nuclear weapons which only guarantee mutually-assured destructions (MAD), the US cannot afford a military war with an equally powerful China. Hence the option is the economic war.

Since the end of World War II, the US had been the beacon of free trade. It scoffed at centrally controlled economic policies of the Soviet Union and other communist nations. Be it the historic Bretton Woods talks in 1944, the decision to end the gold standards in 1971, or the General Agreement on Trade and Tariff (GATT) deliberations that led to the formation of the WTO, the US had hit out at protectionism and championed free trade and liberal monetary and economic policies. Many a time, Washington had accused Japan and China of deliberately devaluing their currencies and adopting unfair trade practices.

But today, under Trump, the US sees WTO, which it had helped set up, as a hostile organisation. “The WTO has been a disaster for this country,” Trump ranted in March. “It (WTO) has been great for China and terrible for the United States, and great for other countries,” he said.

Today, instead of the US, it is China which appears to be pushing for more open borders, with its Belt-and-Road Initiative being promoted as a world trade booster.

In China, policymakers, academics and the people see Trump’s trade war as part of Washington’s strategy to check China’s rise and urge the government to take tough countermeasures.

The currency war is, probably, one such countermeasure, though the yuan has suffered a nine-percent drop due to Trump’s trade war salvos. Undercutting the US dollar, countries such as China, Russia and Iran are increasingly doing business bypassing the dollar. China is considering a move to price oil in yuan linked to a gold-backed futures contract. The yuan officially became a world reserve currency in November 2015. Meanwhile, Russia and Iran have signed an agreement to avoid the dollar in their transactions. To overcome hurdles related to US sanctions, countries such as India have decided to buy oil from Iran by paying in local currency.

These developments have posed a serious threat to the US dollar as a world currency. The consequences could be devastating not only to developing countries, but also to the US itself. In addition, a slowdown of China’s economy could generate worldwide tremors or lead to a global recession. Trump should wake up to these dangers.

-Ameen Izzadeen