Trump And The World

Cost For Trump Taking On China Will Land Flat On U.S. Economy

Show me the Mao(ney)
Show me the Mao(ney)
Andrew Mayeda and Saleha Mohsin*

WASHINGTON — President Donald Trump is breaking with recent U.S. convention by portraying China as a rival that wants to undermine American prosperity. But it may take more than an aggressive tone to change the complex relationship between two economies that are joined at the hip.

In a new national-security strategy released Monday, the White House lumped China with Russia as powers seeking to "challenge American power, influence, and interests," and attempting to erode the country's security and prosperity. "We will attempt to build a great partnership with those and other countries, but in a manner that always protects our national interest," Trump said in a speech in Washington.

The new rhetoric contrasts with the more collaborative approach of former President Barack Obama, who courted China as an economic partner even as the U.S. asserted its military power in Asia.

Under his "America First" approach to foreign policy, Trump says he will try to eliminate America's $500-billion total trade deficit by insisting on "fair and reciprocal" commerce with other nations, and strengthen the national security test for foreign investments. At the same time, Trump is juggling the more imminent need of working with China to address North Korea's nuclear weapons program.

The U.S. strategy may convince China to ease some trade barriers, giving U.S. firms more access to the world's second-biggest economy. But it will be difficult to eliminate America's $309-billion trade shortfall with China without deeper reforms to the nature of each country's economy.

The two nations' interests are "increasingly interwoven."

That's because trade flows are heavily influenced by the amount that countries save and invest. When a nation invests more than it saves, as the U.S. does, it will import more than it exports, and finance the resulting current-account deficit by borrowing from abroad.

"China has lots of protections in place, so the U.S. has legitimate issues on market access," said David Dollar, a senior fellow at the Brookings Institution who worked as the U.S. Treasury's economic emissary to China under Obama. "But even if they did everything we wanted, it wouldn't necessarily change the trade balance."

The U.S. and other countries have been pushing China for years to transition from an export-driven, state-led growth model to one more reliant on domestic consumption. For its part, the U.S. could take steps to increase savings, and therefore narrow the trade deficit.

China's official English-language newspaper China Daily sought to play down the accusation on Tuesday, saying in an editorial that the speech still recognizes that the two nations' interests are "increasingly interwoven." Still, the editorial raised the prospect of "exacerbated frictions over trade", with Trump promoting economic strength as indispensable for national security.

Republican plans to cut taxes may undermine Trump's trade goals, by giving a short-term boost to the U.S. economy that strengthens the dollar, making U.S. exports more expensive, said Eswar Prasad, a China expert at Cornell University. "The Trump administration's tough rhetoric on China is a cross-purposes with its own domestic and international economic policies," he said.

Talks between the U.S. and China through their main economic channel have stalled. But the two nations have little choice but to cooperate, given the intertwined nature of their economies, said Michael Wessel, a member of the U.S.-China Economic and Security Review Commission.

"Just look at the iPhone, which is produced in China with a lot of suppliers having moved to China to support production," Wessel said.

While Trump has so far deferred specific measures to crack down on China's trade practices, his administration is considering tariffs on steel and aluminum imports, and probing China's intellectual-property practices.

U.S.-China trade ties are a win-win.

"If the administration chooses a more muscular course, then the Chinese authorities could retaliate or move toward the global moral high ground of using WTO and other existing mechanisms," Nathan Sheets, chief economist for PGIM Fixed Income, who served as Treasury undersecretary for international affairs under Obama. "My hunch is it will probably be some of both."

Under Trump, U.S. policy toward China has shifted to increasingly looking at trade issues through a security lens. Treasury Secretary Steven Mnuchin says he's spending more time on sanctions and national security-related issues as the Treasury accelerates the use of sanctions to cut off North Korea"s ties with the U.S. financial system.

Mnuchin has has urged closer vetting of foreign acquisitions by the security-review panel he chairs, the Committee on Foreign Investment in the U.S., known as Cfius, while maintaining an investor-friendly climate.

Support is growing for strengthening Cfius. On Monday, Defense Secretary James Mattis joined Mnuchin and Attorney General Jeff Sessions in supporting proposed legislation led by Republican Senator John Cornyn calling for tougher security reviews for foreign investors seeking to acquire and invest in U.S. companies, particularly targeting China.

Chinese Foreign Ministry spokeswoman Hua Chunying said Monday, before the launch of that security strategy in Washington, that U.S.-China trade ties are a win-win and that China will continue to liberalize its trade and investment policies.

*with assistance by Yinan Zhao

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The Food Truck, A Sign That The White And Wealthy Are Moving In

In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.

Balboa Park Spring Fling Food Truck festival

San Diego Food Trucks via Facebook
Pascale Joassart-Marcelli

SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.

What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?

But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.

An appetite for gentrification

I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.

In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.

This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.

Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.

Informal street vendors are casualties.

A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.

On paper, this all sounds great.

But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.

This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.

In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

A call for food justice

Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.

Food, it seems, has become the perfect lure.

It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.

In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.

Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.

Upending an existing foodscape

In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.

San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.

Longtime residents find themselves forced to compete against the "urban food machine"

But that doesn't mean objections don't exist.

Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.

All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.

So what happens when new competitors come to town?

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

Starting at a disadvantage

As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.

My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"

San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.

When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.

Going up against the urban food machine

Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.

I argue that investors and developers use food as a tool for achieving the same ends.

When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.

Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.

It's hard to see how that's a form of inclusion or empowerment.The Conversation


Pascale Joassart-Marcelli is a Professor of Geography and Director, Urban Studies and Food Studies Programs at San Diego State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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