China is all set for a trade war with President Donald Trump. Or any other kind of war he wants. Experts say the Pooh Bear is bluffing. His economy is on the verge of collapse to start with. Even so, they’ll “fight to the bitter end of any trade war,” the foreign ministry promises.
China ready for war
China is ready for a trade war, just bring it on, they bluster. Any tariff Trump lays down will be answered “tit-for-tat” with one of their own. Starting with a bump on “agricultural imports from the U.S.” The communists announced that one “within minutes of a new 10 percent U.S. levy on Chinese imports that came into effect on Tuesday,” March 4.
It “adds to existing tariffs both from Trump’s first term and those announced last month.”
Insiders note that Xi Jinping’s “latest retaliatory measures are an opening swing, not a direct punch.” The rhetoric “shows some strength, and it has the potential to sting parts of the United States, but also leaves room to negotiate or escalate if necessary.”
China is probably bluffing when foreign ministry spokesperson Lin Jian declared “we advise the U.S. to put away it’s bullying face and return to the right track of dialogue and co-operation before it is too late.”
The main strategy appears to be “hitting Donald Trump where it has the potential to hurt.” China thinks that “targeting farmers” will produce some political leverage because they’re “some of his core supporters.”
Don’t worry, Trump assures the agricultural sector, there are others who will buy their produce. Including new businesses setting up shop inside the U.S. to avoid tariffs of their own.
Painful prices
Until now, the Chinese have been one of the biggest customers for U.S. “produce such as chicken, beef, pork and soybeans.” Starting March 10, they’ll have an extra 10-15 percent tax added, reducing demand.
“The tariffs are broadly negative for US agricultural markets. It is going to have a bearish influence on prices. There are enough corn and soybean supplies in the world for China to make a switch.”
It will take more than pressure on the soybean market to break Trump’s economic will. “Beijing may hope that this will apply some pressure on the Trump administration ahead of any potential negotiations.”
It’s not destined to end well for China. The latest announcements “raise the prospect of an all-out trade war between the world’s top two economies.”
They’re talking tough but they really want to avoid an all out trade war at all costs. They were hoping for a phone call from President Trump which never came.
According to Even Pay, an analyst with Trivium China, “China’s tariffs impact a limited number of US products, and remain below the 20 percent level. This is by design. China’s government is signaling that they do not want to escalate, they want to de-escalate.“
