A doubling of American prices on Chinese products. The Chinese nationalist bloggers comparing President Trump’s samples to a declaration of war. The Chinese Foreign Ministry promising that Beijing “will fight until the end”.
For years, the two largest powers in the world have flirted with the idea of an economic decoupling while the tensions between them have increased. The acceleration of this week, in actions and words, of the deterioration of their commercial relationship made the prospect of such a divorce closer than ever appear.
On Wednesday, the Trump administration expressed its threat to increase the prices on Chinese exports by an additional 50% unless China has canceled its own reprisals on American products from last week. The minimum tax on Chinese imports is now 104% amazing.
With the best leader in China, Xi Jinping, and Mr. Trump has locked a chicken game – everyone does not want to risk appearing weak by making a concession – the commercial fight could become uncontrollable, igniting tensions on other areas of competition such as technology and the fate of Taiwan, the autonomous island claimed by Péijing.
Mr. Trump’s naked tactics make him singular strength in American politics. But in Mr. XI, he faces an adversary who survived the turmoil of political purges of the end of the 20th century of China, and who considers competitive tactics of the United States as finally aiming to reverse the legitimacy of the leading Communist Party.
“Trump has never entered a fight in the bass where the other side is ready to fight and use the same type of tactic as him,” said Scott Kennedy, principal advisor to the Center for Strategic and International Studies, a Washington reflection group. “For China, it is their sovereignty. It is the grip of the Communist Party on power. For Trump, it could be a political campaign.”
The Chinese economy, which was already in a vulnerable state due to a real estate crisis, is now faced with the spectrum of a global recession and a devastating slowdown in trade, its decisive industry and its main growth engine. In a sign of growing malaise in Beijing, Chinese censors seemed to block research on the social networks of hashtags which referred to the number 104, as in the size of American tariffs.
“This is a huge shock for the Chinese-American economic relationship, like an earthquake,” Wu Xinbo, dean of the Institute of International Studies at Fudan University in Shanghai said, about the prices imposed on Wednesday. “It remains to be seen if it is a temporary turmoil or an inevitable long -term trend.”
Admittedly, an American-Chinese decoupling is still far from becoming reality. Chinese and American companies like Tiktok and Starbucks are both still rooted in countries with each other. And Chinese banks remain harnessed from the financial system dominated by the US dollar.
China and the United States are still at the edge stadium, said Kennedy, each trying to force the other to offer an agreement on the folded knee. But spitting could become more dangerous if the Trump administration is understood after Chinese financial institutions – for example, announcing the licenses of Chinese banks in the United States or by quickly making them the international payment system.
By rejecting Mr. Trump’s movements, Beijing presented himself as a victim of unjust American commercial practices and protectionism. Irony is that China has done the same thing, if not worse, over the decades by limiting foreign investments and subsidizing Chinese companies.
Mr. XI himself had no direct comments on the last American rates. On Wednesday afternoon, however, however, shortly after their entry into force, the Chinese state media announced that he had delivered a speech at a meeting with the other members of the Permanent Committee of Politburo, the summit of power in China, as well as other senior officials. In this document, Mr. Xi called on managers to strengthen links with the neighbors of China and to “strengthen the cooperation of the industrial and supply chain”.
A spokesperson for the Chinese Foreign Ministry, Lin Jian, tackled the new prices, claiming Wednesday that China “would never accept such arrogant and intimidation behavior” and that “would retrieve definitively”.
Any fracture between Chinese and American economies will be felt around the world. Business was the basis of the bilateral relationship for almost five decades. Without this, their commitment to other global issues, such as security, climate change and future pandemics and financial crises, would probably trigger.
China has tried to minimize its vulnerability to economic chaos triggered by the Trump administration. He says that he has reduced his dependence on American markets for his exports and that his economy becomes more self -sufficient, in particular with regard to the development of local technologies.
But that the papers concerning serious problems in the Chinese economy, which stagnant due to a collapse on the real estate market. In addition, Mr. Trump’s assault on the global trade system, which includes targeted countries like Vietnam where Chinese companies had opened factories to bypass previous American rates, strikes at the heart of one of the only current economic light points in China.
The repercussions of the commercial disruption will harm in the United States, which relies on China for all kinds of manufactured products, but will do more damage to China, Wang Yuesheng, director of the International Economy Institute of the University of Peking, said.
“The impact on China is mainly that Chinese products have nowhere to go,” said Wang. This will ravage export -oriented companies doing things like furniture, clothes, toys and household appliances along the east coast of China, which largely exist to serve American consumers.
“These companies will be affected very hard,” said Wang.
The threat to China exports aggravates the difficult task of bringing foreign investments, which have undergone an exodus from the cocovio pandemic and the introduction of strict national security laws that have made business in China increasingly difficult.
Xi tried to waded foreign investors, hosting a group of overseas leaders last month in Beijing. In a speech, he said that the development of China was due not only to the leaders of the Communist Party, but also to “the support and help of the international community, including the contributions made by companies financed abroad in China”.
Beijing’s strategy is now to postpone the United States and hope that Mr. Trump will succumb to the internal pressures to reverse the course, said Evan Medeiros, professor of Asian studies at the University of Georgetown who was adviser in Asia of President Barack Obama.
“They know that if they give in to pressure, they will get more pressure,” he said. “They will resist it with the conviction that China can resist more pain than they can.”
Until then, Chinese leaders seem to be giant the country for an extended fight. A sign: influential bloggers have been allowed to weigh on the crisis and suggest ways to retaliate against the United States.
One of them, Ren Yi, a Chinese blogger educated at Harvard who is called the name of the “Rabbit President” pen, listed six potential countermeasures, including restrictions in China on American service companies such as law firms and consulting companies; Cut American poultry and soybeans; And put an end to cooperation with Washington to reduce the fentanyl flow in the United States.
“The trade war,” he wrote, “is not just an economic friction but a” smokeless war “. This must be understood from this point of view. »»
Vivian Wang Pekin’s contributed reports.
