Monday, 25 June 2018

China and Trump’s Tariffis: Stop, or I’ll Shoot Myself Too

Tom Holland is a spot-on commenter on regional issues, especially China.
In this article he shows how difficult it will be for China to retaliate to the Trump tariffs without also hurting itself.
Good corrrective to all those simply reporting that China will go tit-for-tat.
I noted the other day that one of the ways China is thinking of retaliating is restricting Chinese tourists and students going to America. That's only going to hurt -- maybe infuriate -- individual Chinese.
When last week US President Donald Trump threatened to slap tariffs on an additional US$200 billion of imports from China, on top of the US$50 billion already targeted, the Chinese government immediately promised to retaliate in full proportion. The trouble is that retaliating will be a lot more difficult and painful than Beijing’s counter-threats make it sound.
So far, responding to the US trade actions hasn’t been a great problem. The first round of US tariffs targeted specifically at China is due to go into effect on July 6. On that day, the US will begin to levy a 25 per cent tariff on 818 imports from China, worth US$34 billion annually. When it does, Beijing will immediately impose equivalent tariffs on US$34 billion of goods imported from the US.
And when the US follows up with tariffs on another US$16 billion of imports from China, Beijing will again respond in kind.
If link doesn't work, a pdf file here.