The World to Witness more Competitive Pricing of Goods including Cars and Energy in Coming Days

The World to Witness more Competitive Pricing of Goods including Cars and Energy in Coming Days

Des: As the U.S.-China may strike a “trade-deal”, and Trump-Putin think to end the war, competitive price-game of goods will be at the centre of trade and geopolitics.

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Scene 1: Conflicts between tribal groups in different parts of Africa, the latest being in Congo, are increasing as trade war and competition among powerful nations for becoming more powerful, rise.

Scene 2: U.S. President Donald Trump holds a telephonic conversation with China President Xi Jinping, before he takes over the reins of the United States of America for the second time on Monday. Trump terms his conversation with Chinese President Xi as ‘friendly’ and that he thinks he could ‘reach a trade deal’ with China.

Scene 3: U.S. President Trump, delivering his address to World Economic Forum, Davos, through a video link, says he wanted to work towards cutting nuclear arms. He also thought that Russia and China might support reducing their own weapons capabilities.

Trump also, on Thursday, said that he wanted to meet Putin as soon as possible, to discuss ending war with Ukraine.

These geopolitical developments clearly suggest one thing: That the world is taking one step forward and one step backward at the same time.

And while geopolitical relations may improve in some parts of the world, they may remain conflicting in some other parts of the world.

Insurgency in Congo and other African nations  

Insurgent group, M23, has been making rapid advance towards eastern region of Democratic Republic of Congo, and on Friday the rebels were very near to taking over of an important city, Goma in Congo. If the rebels manage to take over the eastern region of Congo, the strength of the rebel group will increase because the region is mineral-rich. A worsening humanitarian situation is all too evident as huge number of people are being forced to flee their homes.

There are also conflicts between nations, apart from civil wars. From Sudan to the Sahel, war has spread across the African continent. Civil wars are on in Congo, Ethiopia, Sudan, Burkina Faso, Mali and others, and foreign actors are remotely involved with their own interests.

As mining activities grow, history shows that mutual conflicts usually intensify. With trade war, particularly between the U.S. and China entering another level after Trump take-over, mining in Africa by China is set to witness an upward trend. Mutual tribal conflict and rebel-government conflict too will witness an upward trend.

Trump-Xi Conversation

Last week’s conversation between Trump and Xi is to be seen from the point of ‘wait and watch’ by both the world leaders and the competing world economies. The two nations clearly can’t openly trust one another.

China is on a huge trade surplus and Trump would like to see a trade balance. Trump would like China to import U.S. goods more, but given the aggressive policy that China has been following, it is on a look out to increase its trade surplus with nations.

Thus, it is very unlikely that trade war between U.S. and China will get slowed. As Trump has threatened of imposing 60% tariff on Chinese imports to the U.S., China would now be studying how far can Trump go on his words. If the U.S. has to adopt a policy of restrictive trade with China, it has to increase its domestic products and productions—which is not possible over-night. Moreover, price game of goods would always be on the side of China given the cheap labour that it has back home.

Fair Trade Practices

While Trump wants of China to follow“fair-trade” practices so that the U.S. “rather have to not use tariff against China”, Trump  calls tariff a "tremendous power".

In any case, the U.S. will impose minimum of 10% tariff on all Chinese imports even if China agrees to balance the surplus trade it now enjoys.

Taiwan is another hot conflict that China and the U.S. mutually have.

That Trump and Xi cannot avoid trade deal is logical. Trade deal will have to get initiated and moved—which is all for sure. However, this does not mean that trade war between the two top economies of the world will cease. Both the nations will seek to expand their trades with other countries and increase their mining and extraction of oil and natural gas.

The Trump-Putin Talks

President Trump has said the U.S. wants to end wars in the world, including those it did not start. Peace is a better situation for increase of trade and economy—and Trump being a businessman wants to see war in trades, rather than war with weapons. In the Russia-Ukraine war, U.S. finance is involved in terms of military and other supports to Ukraine and Trump wants avoid it.

On the other hand, Russia’s domestic economy too has been slowed due to the ongoing war with Ukraine. Further war may spell disaster and Putin clearly wants to make use of Trump’s stand.

It will be a win-win situation for both Russia and the United States. But the U.S. will through its ‘drill baby drill’ policy, engage Russian energy sector in trade war through international price war. If Trump’s energy policy moves on as he desires it, fuel and gas prices will be more competitive in the world.

Gold under our Feet

Trump invited many multinational company owners for his inauguration ceremony. Multinational companies that own oil refineries across nations too had been invited. Oil refineries across the globe will witness more U.S. partnerships around the world. This will naturally increase fossil-fuel car productions. China which has been focusing on electronic vehicle will be forced to be countered on price game of cars. The world, however, would have to be ready for more global warming in the coming years.

To sum up

The coming years are going to intense price competition of cars and fossil fuels. Between electronic vehicles and fossil fuel vehicles, and between other consumer goods of day-to-day use.