He picked a fight impossible to win, threatening to impose an additional $100 billion in tariffs on Chinese imports.
A White House statement said “(i)n light of China’s unfair retaliation, I have instructed the USTR to consider whether $100 billion of additional tariffs would be appropriate (and) to identify the products upon which to impose such tariffs.”
“I am committed to enabling American companies and workers to compete on a level playing field around the world, and I will never allow unfair trade practices to undermine American interests.”
Beijing responded proportionately to Trump’s imposition of $50 billion in tariffs on its exports to America, a statement by its Global Times (GT) saying:
“China will remain unwavering in opening up to the rest of the world, but not all foreign companies can be the beneficiaries of China’s new round of high-level opening-up measures.”
“We believe companies or US voters who serve as staunch supporters of US President Donald Trump will not only fail to share the dividend of China’s reform and opening-up, but also become the first target group as China stages counterattacks against US trade tariffs.”
A separate GT statement said “China’s counter tariffs are a spectacular way of standing up to America’s bullying tactics, not only for itself, but for other countries threatened by the US’s new trade policies.”
“China has shown a great deal of restraint for now, but if the US persists in this trade war, China is ready to fight to the end.”
If trade war develops, both economies will be harmed, the global economy as well.
Trump accused Beijing of “unfair retaliation” for responding proportionately to US-imposed tariffs.
Chinese tariffs on US soybeans and other food imports would hit the US farm belt hard. China is Nebraska’s top export market, Iowa’s second most important one abroad.
National Pork Producers Council CEO Neil Dierks explained that “(e)xports are extremely critical to the financial well-being of our producers,” China a key export market, importing over $1 billion in pork products from America.
The amount pales in comparison to $14 billion in US soybean exports to China – 25% tariffs to be imposed if Trump follows through on his threat, the commodity accounting for 75% of US agricultural imports.
US corporate interests bear responsibility for the huge, increasing trade deficit with China and other countries – offshoring their operations and jobs to low-wage countries.
Tariffs aren’t the way to change things. Trump’s vow to reduce America’s trade deficit this way is wrongheaded.
As long as foreign-made goods and services are cheaper than US ones, the trade deficit will grow.
According to a Chinese idiom, America is “lifting a rock only to smash its own feet.”
The country is also the largest foreign buyer of US Treasury securities, valued at around $1.2 trillion. If sold in volume, US and other financial markets would feel the fallout.
America and China are the world’s largest economies. According to an African proverb, when elephants fight, the grass gets trampled.