The first punches in a trade fight that China doesn’t want have been thrown, and now Xi Jinping is poised to match Donald Trump blow for blow.
The first punches in a trade fight that China doesn’t want have been thrown, and now Xi Jinping is poised to match Donald Trump blow for blow.
The next flurry of jabs may be imminent. In his announcement of tariffs on Chinese goods on Friday, Trump vowed additional duties if China retaliated — which Beijing immediately did. An announcement on U. S. restrictions on investments from China will follow in the next two weeks, according to Trade Representative Robert Lighthizer.
Analysts increasingly expect the confrontation to be a war of attrition as the two sides confront the chasm between them. While China has shown a willingness to make a deal on shrinking its trade surplus with the U. S., it has made clear it won’t bow to demands to abandon its industrial policy aimed at dominating the technology of the future.
“The Chinese view this as an exercise in self-flagellation, meaning that the country that wins a trade war is the country that can endure most pain,” said Andrew Polk, co-founder of research firm Trivium China in Beijing. China “thinks it can outlast the U. S. They don’t have to worry about an election in November, let alone two years from now.”
The two nations moved to the brink of a trade war on Friday after the Trump administration announced new tariffs on imports would take effect from July 6. A 25 percent tariff will be imposed on $34 billion in goods imports, with further duties on another $16 billion in imports under consideration. In response, China said it would charge tariffs of the “same scale and intensity” on goods from the U. S., adding that all trade commitments made during the previous weeks of negotiations are now off the table.
