China Threatens to Destroy U.S. Economy if “Naive” Trump Attempts Trade War
A Communist party-controlled newspaper has claimed that Trump is “naive” if he thinks that he can impose a 45 percent tariff on Chinese imports. The U.S. President-elect’s plan, says The Global Times, will paralyze China-U.S. trade. “If Trump wrecks Sino-US trade, a number of US industries would be impaired,” the editorial argued, and China would likely respond with several “countermeasures.”
- A batch of Boeing orders will be replaced by Airbus.
- U.S. automotive and iPhone sales in China will suffer a setback.
- U.S. soybean and maize imports will be halted.
- The number of Chinese students studying in the U.S. may be limited.
Moreover, the new president would be “condemned for his recklessness, ignorance and incompetence,” the newspaper said. The state-run paper stated that such measures would be a serious mistake. “Making things difficult for China politically will do him no good.”
The potential U.S.-China difficulties emerged last August, when candidate Trump declared during a rally that this planned 45% tariff “will stop the cheating.”
During his campaign, Trump repeatedly targeted China, pledging to reprimand its government with “defensive” actions on Chinese imports and to officially declare it a currency manipulator. He also derided the Trans Pacific Partnership which, according to The Guardian, was supposed to have been “proof positive of America’s pivot to Asia.”
The editorial contradicted Trump, expressing, instead, that declaring China a “currency manipulator” will increase pressure on the appreciation of the yuan, which runs counter to the trend of shorting the yan in the international financial market. They did admit that China’s reputation would be affected by such a public display of disrespect, and that “the trade atmosphere between China and the U.S. will become more tense.”
Paul Haenle, a veteran US diplomat who is director of the Carnegie-Tsinghua centre at Beijing’s Tsinghua University, concurs. He forecasts that such protectionist measures would immediately “inject friction” into already fraught US-China ties as well as harming America’s own economy.
“I think it will be damaging to our own interests, and we will have fallout that will affect our own companies and our own economy, and it won’t be effective. It will not achieve what he is setting out to achieve. So, from that standpoint, he is going to have to moderate some of that rhetoric as he puts together actual concrete policies.”
Trump’s economic policies spring from Peter Navarro at the University of California, Irvine. An account in the New Yorker said Navarro’s views on trade and China were so radical that it’s impossible to find another economist who agrees with them. Navarro has written a number of anti-China books. The one that Trump is reported to have read is titled, The Coming China Wars: Where They Will Be Fought and How They Can Be Won.
Navarro’s overarching premise is that trade is a zero-sum game: one party loses, and one party wins. In Navarro’s extension, if tariffs create a hostile business climate abroad, “American multinationals will on-shore their new factories to cities like Charleston, Detroit, Houston, Savannah, Toledo, Youngstown and Oklahoma.”
Other nations seem to be hoping for a more moderate stand from the Trump administration as the months progress and policies are promulgated. For one, Australia traces its growth since 2008 to China, as China takes one third of Australian exports. If Trump were to achieve his objective to reduce China’s economic growth, Australia might drift into recession. Describing the Trump administration as “a break in the strategic American leadership the world has had since 1945,” The Guardian analyzed that it is going to be “to be interesting to watch Australians make the adjustment to an America in decline.”
Additionally, more South Koreans and Japanese have been vocal of late that they should be nuclear-armed due to their suspicions that they can no longer rely on the U.S. as North Korea refines its missile capacity.