Record tariffs: trade war between US and China?
Most of the new tariffs announced by Washington last week are coming into force today, Wednesday. After China refused to withdraw its counter-tariffs, the US has upped the tariff rate for Chinese imports to a record 104 percent. Beijing vowed that it would "fight to the end" if necessary. Europe's press speculates on the consequences of a trade war between the biggest players in the global economy.
Why Beijing won't cave in
If Trump believes he can force a deal like this, it just goes to show how little he understands about Chinese history and culture, writes the Süddeutsche Zeitung:
“To this day, China's colonial period, in which Western powers subjugated and colonised the country in a series of opium wars, is collectively referred to as the '100 years of shame'. ... Back then the country vowed never again to be humiliated by other nations. This principle still defines its political self-image today. ... If Trump now wants to bring China to its knees with announcements of further tariffs, he is pushing for nothing less than a national loss of face. ... China is more willing to accept economic damage than to accept a symbolic defeat on this scale.”
A threat to world peace
Waging a trade war against China is a very risky provocation, warns Mediapart:
“The White House wants to deal a blow to the regime in Bejing by weakening Chinese growth. ... But it was hardly feasible that China wouldn't retaliate. Any political weakening will prompt China to embark on a headlong nationalist onslaught, which would inevitably end in the occupation of Taiwan. If Donald Trump's policy leaves Bejing with nothing to lose, things will get very dangerous indeed. This all-out trade war is no trifling matter. It starts a battle which is all about bringing the other side to its knees. So it goes far beyond a game about tariffs and trade. It puts world peace at risk.”
Xi is not prepared for this
The Spectator sees China as the weaker party in this this trade war:
“It is suffering the lingering effects of a property collapse (responsible for a quarter of the economy), heavily indebted and saddled with massive over-capacity. Few companies are making money and Xi's efforts to export his way out of trouble, with heavily subsidised renewable energy tech leading the way, is especially vulnerable to tariffs. While it is true that Beijing has been preparing for trade hostilities, it is unlikely to have anticipated tariffs on this scale. ... For all the bravado coming from Beijing, the Chinese economy is highly vulnerable and will come off worse from the slugfest that is now gathering pace.”
China more than capable of defending itself
The world's second-largest economy is well positioned for a tariff dispute with the US, says The Irish Times:
“China has diversified its export market in recent years so that while the US remains its biggest market, its share of Chinese exports has fallen substantially. And its manufacturers are so dominant in some sectors, that American retailers will struggle to find alternatives in the short term. ... Many countries, including some in the EU, are hoping that market turmoil will generate enough domestic political pressure for Trump to change course. Beijing is putting the alternative strategy to the test by taking the fight to Trump and preparing to face the consequences.”
Trump has already failed
The American people won't forgive Trump this shock, Spotmedia predicts:
“The tariffs won't exist for long. According to experts, there are three possible scenarios: Trump negotiates and lowers the tariffs. He capitulates and withdraws them completely. Or Congress intervenes and changes the legislation. A combination of these options is also possible. Either way, Donald Trump's term in office has failed and he has turned a large part of society against him. He will never be forgiven for making the American economy vulnerable and for jeopardising the prosperity, stability and prospects of millions of people.”
Europe could be hit by dumping
De Standaard also ponders the consequences for Europe:
“America continues to be China's main export destination. Millions of Chinese work in companies whose main customer is the US - these companies are now potential casualties of this trade war. ... The US economy is much less dependent on exports than China's. ... For Europe, the main risk is that China will dump all the products here that it cannot sell to America at rock-bottom prices, squeezing European businesses out of the market in the process.”