Asia

Commentary: Trump’s renewed trade war with China is just getting started

However, for a true resolution to occur from Washington’s perspective, China must go past just buying more stuff from the US and move off its current path. Sure, China doesn’t want tariffs from the US, but it’s hard to see any substantive behaviour China will change to keep the US from its course of retaliation beyond tariffs, such as investment restrictions and export restrictions targeting China’s ability to make advanced semiconductors.

Analysts point to China having another 10 per cent levied against it while Canada and Mexico each had 25 per cent as evidence that Mr Trump is setting the stage for a future trade deal.

It does not.

Michael Cunningham of the Asian Studies Center at the Heritage Foundation told me that Mr Trump will likely have to act against Beijing multiple times during his presidency.

“I wouldn’t say Trump went easy on China by just having 10 per cent tariffs. He worked out deals with Canada and Mexico to pause their tariffs, but the tariffs on China went ahead as planned, and he has said multiple times that additional tariffs are forthcoming,” Cunningham said.

“Doing so sends a message that he’s serious, which gives him negotiating leverage, without getting too far ahead of his team’s ongoing review of US-China trade that presumably will help inform future tariff plans,” Cunningham added.

Barbara Weisel, former Assistant US Trade Representative, offered a different perspective.

“Trump has made clear he is prepared to make a deal with Xi, with whom he believes he has a special relationship, although the tit-for-tat may go several rounds,” she told me. 

“Ultimately, whether we will see a prolonged US-China tariff war may depend more on whether China is interested in playing Trump’s game. China could choose to test how little it can offer to buy Trump off or, instead, up the ante exerting its own leverage on the US.” 

Source: CNA

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