Trump tariffs: China counters US with measured opening move

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It will also be far more difficult for Trump to do a deal with China than with Mexico and Canada – and much will depend on what he wants from Beijing.

China is Washington’s chief economic rival and cutting the country off from major supply chains has been a goal of the Trump administration.

If Trump asks for too much, Xi might feel he can walk away and there will be limits on just how far he is willing to be pushed.

The US president is dealing with a far more confident China than he did back then. Beijing has expanded its global footprint, and it is now the lead trade partner for more than 120 countries.

Over the past two decades, it has also steadily tried to reduce the importance of trade to its economy and ramped up domestic production. Today, imports and exports account for around 37% of China’s GDP, compared with more than 60% in the early 2000s, according to the Council on Foreign Relations.

The 10% tariff will sting, but Beijing may feel it can absorb the blow – for now.

The fear will be that President Trump is serious about ramping up that percentage to the 60% he pledged during his campaign or that he will continue to use the threat of tariffs as a recurring diplomatic tool to hold over Xi’s head.

If that happens, Beijing will want to be ready and that means having a clear strategy in case this escalates.


BBC News

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