The Russian news agency Sputnik spoke with the chairwoman of the Schiller Institute Helga Zepp-LaRouche on April 5, concerning the two-day summit which was to begin the next day between Presidents Xi Jinping and Donald Trump.
An article based on the interview was posted on April 6, together with the recording of the entire conversation. We publish further quotes below.
On the fact that Trump has accused China of raping the U.S. economy and of manipulating its currency, and has threatened to impose high tariffs on Chinese imports, Zepp-LaRouche was asked what positions both leaders could take.
“I don’t think that Xi Jinping will react to the campaign tone of the candidate Trump, because now Trump is President. And I think if they put on the table the idea that China would invest in the infrastructure in the United States, Trump himself has announced the need to have a $1 trillion program to reconstruct the American infrastructure. There was recently a conference in Hongkong where Chinese economists estimated that the real requirement is $8 trillion. Now, the way how to reduce the trade deficit is if there would be direct Chinese investment in infrastructure, maybe not immediately, but indirectly; maybe one would have an infrastructure bank, where China could put its investments in, or some solution like that.
“But I’m convinced that they will absolutely come out of this summit with results beneficial to both countries.”
Another question was on how else Trump could reduce the trade deficit and improve relations between the two countries.
“Well, Trump has recently mentioned several times that he wants to go back to the American System of economy, the system of Alexander Hamilton, of Lincoln, of Henry Clay, and it is actually that system which made the United States great following the War of Independence. And that was a highly protectionist system. Alexander Hamilton created the United States by creating a National Bank, a credit system, and for example, the German economist Friedrich List pointed to the difference between the American System of economy and the British System of economy, meaning that the American System which was created by Hamilton basically says the only source of wealth is the creativity and productivity of the labor force; as compared to the British System which says you have to buy cheap and sell expensive, and control trade, and keep labor costs as little as possible.
“So, if you actually look at what China has been doing with the Chinese economic miracle of the last 30 years, it is much closer to the philosophy of Alexander Hamilton, than it would be to the system of globalization and so-called “free trade.” Because I think that the Chinese system of free trade is not exactly the same one what the British and the Americans under the Obama and Bush administrations have been thinking about.
“So, if Trump says, OK globalization led to an outsourcing productive jobs and I want to recreate the American economy, well, that’s the way how to reduce the trade deficit, because the reason why there’s a trade deficit is because many of the products in the last 16 years of the Bush and Obama administration became increasingly less competitive, for example the car industry. The reason why you have more cars imported, from Japan, Korea, Germany, than the other way around, is because these cars are better than American cars.
“And what America has to do, what President Trump has to do — and I think that’s what he intends to do — is to reconstruct the American economy on the highest productive level. The infrastructure is only the precondition, but then there will be other areas, like in the nuclear fission, but especially the development of fusion technology, space cooperation with other countries, so there are many areas where you can leapfrog into the most productive areas in the economy, and I think that’s what Trump intends to do.”