Just when we thought we had a happy ending to this story regarding China and a potential trade war, both sides seemed to have hardened their positions and waiting for the other side to move.
President Trump has continued his talk of tariffs, which is really angering a lot of our allies, who all threaten to retaliate with tariffs and taxes of their own.
To ease tensions and prevent a trade war, China agreed to purchase billions of dollars of American products, including agriculture, and lower the trade deficit between the two countries. But, as of right now, it would appear Trump is not happy with the deal. He’s still threatening the Chinese with a tax on billions of dollars of imports from China.
“Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink. Despite the potential negative repercussions for both economies, the risk of a full-blown China-U.S. trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly,” said Cornell professor Eswar Prasad.
Is President Trump really willing hurt our relationship with a prominent ally in China, who has the second largest economy in the world? The answer appears to be yes. He seems more than willing to wreck whatever relationship is necessary to keep American industry at the forefront and recover some of the billions of dollars lost in unfair deals.
Peter Navarro, who is the director of the White House National Trade Council, confirmed as much on Fox News when he stated China hasn’t been that good of a friend to us.
They’ve been aggressive in the South China Sea, threatened to steal intellectual property, went behind our backs to supply North Korea with goods after committing, in public, to join in the sanctions, and according to the president, has raked us over the coals in regard to trade for many decades.
“That’s a relationship with China that structurally has to change. We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this,” said Navarro on “Sunday Morning Futures.”
Trump is still considering more tariffs on $50 billion worth of China’s exports and another $100 billion they would consider taxing to make up for the massive deficit. If this goes through, China threatens taxes and tariffs of their own and to cancel any of the new trade deals that have been hammered out.
It appears to be a tit for tat stare down between the two world’s economic superpowers. No one knows if Trump is serious about imposing tariffs or is just using the tactic for positioning. So far, he has been able to successfully get many countries to come to the table willing to renegotiate deals just to stay in the good graces of the U.S.
President Trump has long believed that other countries have taken advantage of American industry and reap far more benefits from trade than we get in return. It was one of many economic promises he made during the campaign.
Tariffs and a trade war would be bad for the world’s economy and for consumers, who would be required to pay more for tariffed items to cover the increased cost.
We’ll continue to cover this story as it develops.