fter months of build-up, Donald Trump has finally imposed 25 percent tariffs on $34 billion of Chinese imports. The trade war between the world’s two largest economies just got real.
On Air Force One, Trump told reporters that the tariffs would be imposed at just after midnight on Friday in Washington (so noon in Beijing). He added that another $16 billion of tariffs on Chinese goods could follow in “two weeks,” and that his administration was ready to go with additional tariffs of $200 billion and $300 billion. In total, these levies could eventually effect $550 billion in Chinese imports.
Presumably, whether these measures will be enacted will depend on China’s reaction to these initial tariffs. Ever since Trump first floated the idea of imposing tariffs on Chinese imports back in March, China has declared, again and again, that it will respond in kind with tariffs of its own on American imports.
While meeting last month in Beijing with a group of CEOs from mostly American and European multinational companies, Chinese President Xi Jinping had some unusually ominous words, apparently in reference to Trump’s threats. “In the West, you have the notion that if somebody hits you on the left cheek, you turn the other cheek. In our culture, we punch back,” Xi said.
Yesterday, China’s Ministry of Commerce had yet more harsh words for Trump, declaring that if the US did impose tariffs, China would not bow to the threat of blackmail and instead be forced to retaliate.
— Haidi Lun 伦海迪 (@HaidiLun) July 5, 2018
So far, China has not yet said how exactly it plans to retaliate, but after the tariffs were imposed, the Ministry of Commerce released another statement, charging the United States with breaching World Trade Organization rules and igniting “the largest trade war in economic history.”
The ministry said that while China has promised not to fire the first shot in this war, it will now be forced to retaliate in order to defend its core interests.
While most believe that the trade war is bad for the world-at-large, opinion remains divided on which country will actually come out on top. In the past, Trump has said that trade wars are “good and easy to win.” However, Beijing has some rather significant advantages in the conflict.
We once starved 30 million of our own citizens so the grain requisition paperwork would look good. Bring it, comrade. https://t.co/DlbnwQn1Fm
— The Relevant Organs (@relevantorgans) July 5, 2018