China will “fight to the end” to win US China Trade War
Synopsis
If President Donald Trump thought that his tariffs on China would be taken lying down then it seems he was sorely mistaken. After China responded to last Friday's “Liberation Day” tariffs by saying they…
If President Donald Trump thought that his tariffs on China would be taken lying down then it seems he was sorely mistaken. After China responded to last Friday's “Liberation Day” tariffs by saying they would not bow down to “blackmail”. Trump doubled down when he pontificated about putting 100% tariffs on Chinese goods. This comment came in response to China announcing counter tariffs. All signs point to an escalating US China trade war.
China and Europe Fight Back
China's commerce criticised the U.S. for its plans to increase tariffs, calling it "a mistake on top of a mistake" and accusing the U.S. of using blackmail. They warned that if the U.S. continues with its approach, China is ready to "fight to the end."
At the same time, Chinese manufacturers are feeling the pressure as their economy has already been under strain. Many companies are issuing profit warnings, looking to set up factories in other countries, and renegotiating prices with customers to cope with the pressure of the looming trade war.
The European Union has also responded, proposing its own counter-tariffs to push back against Trump's aggressive trade policies. The EU is considering counter tariffs of 25%. While they are pushing for a “zero to zero” approach for free trade with the United States, they feel as if the US is giving them no choice
Trump Not Backing Down
Trump administration officials say the president is staying true to his promise to reverse decades of trade liberalisation, which he believes has weakened the U.S. economy.
Some countries do seem willing to kowtow to US pressure as Taiwan, Vietnam, Argentina and Israel have all indicated they are willing to give in to Trump’s demands in hopes of avoiding the punitive tariffs.
"He's doubling down on something he knows works, and he’s going to keep at it," said White House economist Kevin Hassett during an interview on Fox News. "That said, he’s open to hearing from our trading partners. If they come forward with strong deals that benefit American manufacturing and farmers, I’m sure he’ll consider them." Which side will buckle under the pressure and if a US China Trade War can be avoided remains to be seen.
Sources
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