Donald Trump Enters South China Sea Debate as he Slams China as Currency, Trade Manipulator

Accusing Beijing of manipulating its currency, unfairly taxing U.S. products and militarizing the South China Sea, Donald Trump has lashed out again at China.

Tweeting on Sunday evening, the U.S. president-elect said: “Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into.”

“Their country (the U.S. doesn’t tax them) or to build a massive military complex in the middle of the South China Sea? I don’t think so!”

A tweet-heavy weekend followed this. A threat of a 35 percent tax on products sold in the U.S. by any domestic business that moved operations overseas was placed by Trump on the social media platform. The real estate mogul had campaigned on a platform of boosting business and American jobs.

Trump also broke almost four decades of U.S. foreign policy that has acknowledged Taiwan is part of China, Trump strained relations with China on Friday by accepting a congratulatory phone call from Taiwan’s President Tsai Ing-wen, and the tweets on China also came amidst that controversy.

Beijing has made clear its dislike of pro-independence Tsai as China considers Taiwan a renegade state that can be retaken by force at any time. While blaming Taiwan for the “petty action”, China lodged a diplomatic protest with the U.S. over the call during the weekend. However it is not clear if the protest was made directly to Trump’s transition team.

The South China sea is at the centre of a raging controversy in Asia which China, as well as other Asian countries, claims as its own and the U.S. and China are locked in a battle of wills over the maritime region and hence the reference to the South China Sea is particularly sensitive.

China’s claims of historical rights to the region were not founded on evidence and were counter to international law by the Permanent Court of Arbitration in The Hague  in July. The South China sea is a key international shipping route. Chinese efforts to create man-made islands on top of atolls and reefs, as well as its large-scale fishing in the disputed areas were found to be illegal by the court.

China has refused to recognize the court’s authority. Meanwhile, the U.S. had continued to assert its right to conduct naval patrols in the area

On the other hand, Trump has also threatened U.S. companies that move their business operations overseas and still try to sell their product to Americans with heavy taxes as retribution.

Any business that fired American workers and built a new factory or plant in another country would be slapped a 35 percent tax on products sold inside the U.S., threatened Trump in a series of early-morning tweets Sunday.

Trump campaigned on a vow to help American workers but also to reduce taxes and regulations on businesses.

Trump tweets “there will be a tax on our soon to be strong border of 35 percent for these companies wanting to sell their product, cars, A.C. units, etc., back across the border.”

He says companies should be “forewarned prior to making a very expensive mistake.”

(Adapted from CNBC)

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Categories: Economy & Finance, Geopolitics

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