New measures from China to North American New Tariffs
China has not remained indifferent to the trade war that the president of the United States has initiated, striking first with the introduction of new higher tariffs on steel and aluminum that he carried out a few weeks ago without consultation. On its part, Beijing, as expected and announced, will place new import tariffs on meat, fruit and other products from the United States. Several analysts had predicted that the Asians would respond with measures that would affect the agricultural products of the United States. Eight will be the products on which China's Customs Tariff Commission will increase the import rate, including pork, by 25%.
A new tariff of 15% was also placed on the importation of 120 products from the United States, including fruit. The tariffs are executed in response to the 25% increase that Trump ordered to steel imports, and 15% to aluminum import. Even so, Trump dreams that Beijing will increase imports of planes, automobiles, soybeans and natural gas.
Why has this war started?
According to the President of the United States, the first commercial attack was produced as a result of the pressure created by China to steal intellectual property, technology transfer and trade secrets. The measure sticks perfectly to Trump's protectionist slogan: American First used during his campaign and has among its tasks to reach fair agreements for the United States. It’s important to recall that was one of the reasons why Trump decided to leave the Paris Agreement.
However, analyst Mariano Turzi, like other experts, considers that it is not a commercial conflict, but a hegemonic one. China has become the second most thriving economy in the world and therefore, has gained space in politics; its technological development may in a couple of years exceed the United States. American political advisers have seen the threat of losing their position as world leaders. Hence the concern to tackle China before it displaces them. According to Turzi, this is not part of a commercial war or a fight between two economic models, but between two drivers.
The United States as a policy seeks to protect American technology, fundamental to the economic future of the nation. "We do it to combat the growing threat of a nation that is an economic enemy," Trump said. According to the US authorities, the United States closed 2017 with a stratospheric trade deficit of 375,000 million dollars with China.
But China has a less impulsive strategy than Trump's. So far, it has imposed tariffs on 128 American products intending to reduce the purchase US agricultural products, including pork, a product highly demanded by the Asian giant nation. The move has stroke a key sector for Trump and the consequences could be seen during midterm elections, where states like Kansas and others will see their income seriously affected.
The good part of the economic shock between the two powers could be an opportunity for other competitors: EU, Russia, India and Latin American countries such as Brazil and Argentina. The impact of the commercial war unleashed by Trump can be seen in the fall of the dollar, particularly because of the fear that the protectionist measures of the American leader offer. Ironically China is the largest holder of US treasury bonds, which accentuates the dollar instability and reinforces the euro.
HuaChunying at the time made the Chinese position clear: They will not accept economic intimidation and US hegemony. The Asian chancellery has considered arrogant and ignorant the officials and advisers to the president who believe that through pressure can stop the Asian nation push. China reiterated again that they want mirror tariffs: if they tax us, we tax them the same. “What it cannot be tolerated is that our cars are subject to a 25% tariff and that we tax theirs only a 2%”, he said.
The commercial war between the two powers has also affected the stock market. Wall Street fell 2.9% and according to economists, it is possible that it will continue to sink if the latest Chinese measures have an American response.
In the ‘90s Bill Clinton used the same strategy with Japan coming out victorious. But on this occasion, the Asian country is very different. China geographically is superior to Japan; in addition, its geostrategic position in the area is privileged. China is the natural manufacture of many North American products and supplies for the North American industries, including the technological one. Do you want to check it out? See the back of your iPhone and read where it was made from.