It’s not surprised to see China’s retaliation toward President Trump’s insatiable tariff plan. China proactively prepared and responded its retaliatory action against metals levies hours after Trump’s fresh tariff plan.
A New Treat to So-called ‘Friend’, Trump Targets at ‘Made in China’ 2025 Plan
In less than 15 days from Trump’s steel and aluminum duties announcement, he furthered the step by imposing tariffs on $60 billion of Chinese imports and pledged there’s more on the way. Ironically, he still insisted that U.S. and China were still “Friends” and said:
“I have tremendous respect for President Xi. We have a great relationship. I view them as a friend.”
Not only China, the opponents are rooted in the U.S. technology industry, auto and retail industry. The immediate economic impact of the tariff war on U.S. and China is believed not be as destructive as people fear, according to
Former Treasury Secretary Lawrence Summers, however, the long-term impact will depend on how the Chinese government interprets the intention behind Trump’s policies.
The true intention of Trump, reported by Bloomberg, is aiming at ‘Made in China’ 2025 plan – the timeline that China may take the lead in global high-tech industries. Correspondingly, Beijing also stated that the ten high-tech industries that U.S. may impose tariffs on China are coincidently the same with main proposals of ‘Made in China’ 2025 plan released by Chinese government.
Such inference was proofed by U.S. Trade Representative Robert Lighthizer: “These are things that if China dominates the world, it’s bad for America.”
That is to say, behind the so-called “national security” and “intellectual property rights,” the United States is anxious about the insurability of a new generation of technological dominance.
“We’ll neither scared nor hide”, China Respond
China has taken the action to beat Trump at his own game, and would impose about $3 billion worth of tariffs on U.S. imported goods with specific levies adjustment as mentioned above.
To hit back Trump’s incongruous argument, China has released a list of 128 U.S. products as potential retaliation targets on March 23. The list includes fresh fruits, dried fruit and nut products, wine, modified ethanol, American ginseng, seamless steel pipe and other products which will impose 15% tariff when exporting to China, while a 25% tariff will be imposed on U.S. pork and recycled aluminum goods, according to the official statement.
Seek for Solutions to Relief Tariff Differences
Perhaps neither of the two countries wishes to escalate the situation because it has more to lose in a trade fight. Soon after a week of harsh words from both countries, a negotiation for improving U.S. access to Chinese markets has quietly proceed between China and the U.S.
The negotiation is led by Liu He, China’s top economic adviser in Beijing, and U.S. Treasury Secretary Steven Mnuchin and U.S. trade representative Robert Lighthizer in Washington. According to a Treasury spokesman: “They also discussed the trade deficit between our two countries and committed to continuing the dialogue to find a mutually agreeable way to reduce it.”
The positive message from U.S. Treasury Secretary has slightly recovered the confidence of investors. A surge in US stock can be seen on March 26, after a massive rout when Trump announced metal tariffs;and the Dow Jones Industrial Average also bounced back and closed at 24,202.6.
No one wants to see the full-blown trade war between the world’s two largest economies, at least both of the two parties has stepped out to relief the tension. We hope more negotiation will proceed in the following days.