When I was growing up I use to play the card game War with my siblings. Each player would turn over one card at a time and the person with the highest card won the pile. The goal of the game was to get all the cards in the deck to win. When my son attended summer camp one year, one of his counselors taught him how to play Egyptian War. This was a far more complicated version of the traditional War card game, with many more cards being turned over before someone won the hand. That meant winner ‘take all’ potential with mistakes quickly swaying the game in one players favor. As I have been reading about the latest tariffs and potential for trade wars, I was struck by the contrast between those two cards games and the similarity to the ‘game’ being played by the Trump administration.
As with traditional War, Egyptian War always has winners and losers. However, each play has higher stakes and so when mistakes are made, that favors the other side. The question is, in the potential trade wars that we may engage in today with tariffs, will there be mistakes that could tilt the outcome in a way we don't expect? There have long been complaints that China has used unfair tactics with American companies in their negotiations to allow US companies access to the China market. If companies complained or made waves, they could simply be barred from the Chinese market, an economy of over 1.4 billion people and growing. That is more than four times the population of the US! However, one of the big issues of US trade with China is the very large trade deficit which China reaps at over $375 billion in 2017. That means that $375 billion dollars that US citizens and companies earn in the US and pay taxes on, is then spent in China and the Chinese do not reciprocate by spending the same amount of money in the US. You would think with a population four times the size of ours, the Chinese could spend a little more in the US, right? How come that is not happening? We repeatedly hear that the world is a global economy and trade barriers need to be removed but is China playing the same game that we are? Is that why the trade deficit is so big between our countries? Is that why American companies ‘pay to play’ in China has been at the cost of US intellectual capital? Has China been playing Egyptian War while the US was only thinking we were playing the traditional “War” game? Maybe Trump has figured out that the Chinese are playing Egyptian War and the US needs to play it too?
DISCLOSURE: CB is often broken, wrong, off by days, months, years, decades, eras and eons. Author asserts that reader who is reading blog, does so at their own risk. Opinions expressed in the article are solely those of the author!