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Trade wars inspire competitiveness

by Kerem Alkin

Dec 29, 2018 - 12:00 am GMT+3
by Kerem Alkin Dec 29, 2018 12:00 am

The most critical global issues that left their mark on 2018 are, of course, the trade wars. Reports from Washington-based think tanks pointed out that, especially the U.S., would pressure the rising Asia-Pacific and Chinese barons of capitalism. At the time, as the president of the period when these reports came out, Barack Obama preferred to put its weight in a Trans-Pacific Cooperation Agreement, which would balance China's influence in Asia-Pacific rather than directly entering a trade war with China. President Donald Trump, however, put the "iron-seated-velvet-gloves" methods away, preferring to advance the U.S.' fight against China with "open war" methods.

Though Trump started a major fight with China, what is happening today is the consequence of the last 20 years. With the Atlantic Alliance, both the U.S. and the EU lost their competitive manufacturing capabilities in terms of raw material, labor and energy costs, which resulted in the shift of production to the Asia-Pacific region. At this point, a future where they will be losing power in the world economy is rapidly approaching, and the barons of the capitalist system are now severely strained. Now, being strong in global competition is an issue for every country. At this stage, China, especially in the last 20 years, has succeeded in forming this ecosystem to become the most important producer and exporter in the world.

This is why the trade war the U.S. is trying to sustain with all its power is doomed to fail as long as China continues to produce new solutions with its production, enterprise and innovation ecosystem. The exporters and producers of the leading developing countries, including Turkey, see the trade war as a challenge or an opportunity to make themselves more perfect and more competitive. Not good news for the barons of capitalism.

Trump's target is 'war barons'

The last two phone calls between President Recep Tayyip Erdoğan and Trump continue to create a hot agenda for international diplomacy and relations between the two countries. Even though, following Trump's decision to withdraw U.S. soldiers from Syria in coordination with Turkey, U.S. Secretary of Defense James Mattis' approval of the plan has brought forward its aspects related to international politics, its aspects affecting the U.S. economy should not be neglected.

Since the beginning of the 1990s, when the Cold War was coming to an end, the political and bureaucratic elitists in Washington have carried out a massive money laundering campaign in the defense industry in the shadow of the Truman Doctrine. Starting from the 2001 Afghanistan and 2003 Iraq operations, operation expenses spent in the last 17 years have totaled $8 trillion. According to Trump, this money should have been used and should be used to help the extremely poor population and to improve infrastructure like roads, bridges and electric systems that are falling apart. However, a globalist entity laundered this money with the claim of designing the world.

In U.S., while the lower-income class accounted for 25 percent of the entire population in the beginning of 1960, this level fell to 12 percent both in the beginning of the 1970s and the 2000s. However, during the presidencies of James Carter and both George Bush and his son, this level rose up to 15 percent three times. In order for 5.7 million low-income families and 105,000 children without families to survive, U.S. Congress had to allocate 12 percent of its tax income, amounting to $1.8 trillion.

This figure is less than 20 percent of the $8 trillion that evangelicals pursuing dangerous adventures, the wild-eyed neocons and the political-bureaucratic money launderers settled in Washington spent between 2001 and 2018. In the U.S., children in the midst of poverty bring an additional cost of $672 billion every year because of the inefficient use of resources in the economy. If Trump can eliminate the "war barons" that have settled in Washington over the last 30 years, a historic opportunity will be born for U.S. prosperity.

Of course, if he can withstand the attacks.

About the author
Kerem Alkin is an economist, professor at Istanbul Medipol University. He currently serves as the Turkish Permanent Representative to the Organisation for Economic Co-operation and Development (OECD).
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