A rumor spread when legendary football coach Lou Holtz announced that he was leaving the University of Minnesota to accept the head coaching job at Notre Dame. The rumor? That he had been offered a lifetime contract. When he was asked about it by the press, his response was classic Lou Holtz. He said yes, he had been offered a lifetime contract. But, he added that we needed to understand what a lifetime contract means in big time college football. He said, “It means that I cannot be fired, during the third quarter, of a game in which we are ahead and moving the football.”
Such is a lifetime in big time collegiate football.
In 2017 the 19th Chinese Communist Party Congress removed term limits, effectively giving Xi Jinping a lifetime contract. He promised a new era of Chinese power and world leadership.
But something happened on the way to that grand new era of Chinese power and leadership…a guy named Trump.
Donald Trump had been watching from the grandstands. He saw how the Chinese tricked American business and political leaders. Getting concessions while refusing to play by generally accepted rules of trade. Like Lucy with the football, they lured companies and investors with promises of access to their enormous market, only to pull the football away after they got what they wanted. Citizen Trump saw how they were stealing billions of dollars of our intellectual property every year. All of this was costing us millions of good paying jobs. He could not understand why we let them get away with it.
So, he decided to run for president and do something about it. He won and he has. For the first time in recent history, we have a head coach who really wants his team to win. One who is not so easily intimidated. He has made it clear that he doesn’t want a trade war. But if the Chinese want one, they will get one. It is a trade war they cannot win. A trade war which will have far reaching consequences for their economy.
To get their attention and demonstrate his seriousness, President Trump selected tariffs as his weapon of choice. If the Chinese wanted to trade like a world citizen, they would have to behave like one. If they didn’t, he would impose tariffs on their goods coming into our market at rates that mirror the tariffs imposed on our products going into theirs.
Predictably, the “give us what we want and to hell with everybody else” crowd on Wall Street went ballistic. The reaction on Main Street, however, was more like, “it’s about damned time!” Charging them tariffs similar to the ones they charge us seems only fair to reasonable people. The negative impact on our businesses has been minimal. Walmart’s earnings haven’t been dented. Our farmers haven taken a real hit to the president authorized $14 billion in payments to cover the $12 billion in lost Chinese sales. The money is coming from the tariffs paid by the Chinese.
The placid President Xi thought he could bluff or delay any resolution of the dispute. Xi counted on the on-coming election forcing President Trump to back down. He counted wrong.
Sino experts see the Chinese economy stagnating. Manufacturing and foreign investment are going south. Attempts to manipulate their currency only made matters worse. His inner circle must know that Trump holds the cards. Hoping that a new President would simply surrender after next November is foolhardy. Can they seriously believe that as their first official act, a President Biden or Harris would capitulate? Would anyone bet the economic future of their nation on that?
The Chinese have to trade to grow. We don’t.
To make matters worse, the residents of Hong Kong are demonstrating just how they feel about President Xi’s efforts to impose mainland communism upon them. Xi is now boxed in. Belatedly, he is learning that real free-market capitalism and dictatorial communism are more like oil and water. He is caught between two worlds. We wonder if he can survive in either?
While it may be true that President Xi was given a lifetime contract. His team is falling behind. It’s the third quarter. And he is not moving the ball.
Gil Gutknecht served six terms each in the Minnesota and the U.S. House of Representatives.