US v China trade war continues

The share market and Trump approval polls seem to be reacting to the escalating trade war between the US and China.

The Dow Jones dropped 2.34% in Friday trading after a minor mid week recovery from a Monday low.

And the normally Trump friendly but unusually volatile (especially for a tracking poll) Rasmussen has turned against the President after a mid-week boost.

Treasury Secretary Steven Mnuchin acknowledged Friday that President Trump’s threatened tariffs on Chinese imports could kick off a full-scale trade war, but he implied that the administration is in talks with China about resolving the standoff.

“There is the potential of a trade war,” Mnuchin said in an interview with CNBC Friday afternoon. “There is a level of risk that we could get into a trade war,” he repeated.

As the United States and China exchange increasingly antagonistic trade threats, American business leaders, farm groups and some economists worry that President Trump might be going too far.

Given China’s ambitions to dominate cutting-edge technology, he may have to go much further to get Beijing to back down.

Mr. Trump’s threat to sharply escalate the administration’s tariffs on Chinese imports — a threat he reiterated on Friday — shows that neither side has yet gone far enough to persuade the other to compromise. Bigger and broader tariffs may be necessary to get China’s attention.

“The administration, if it’s serious, better be prepared for much more,” said Derek Scissors, resident scholar at the American Enterprise Institute.

China’s leaders sound supremely confident that they can win a trade war with President Trump.

“China is not afraid of a trade war,” the vice minister of finance, Zhu Guangyao, declared at a news conference to discuss possible countermeasures. More than once, he cited the history of the “new China” — which began its extraordinary economic revival four decades ago — as evidence that it would “never succumb to external pressure.”

Washington and Beijing were always set to clash, but such a struggle has been deferred time and time again. We need to accept now that there is no more common ground to preserve, no more common enemy to rally against, and that trade is not the elixir it once was – but rather part of a larger struggle likely to last for many decades.

Considering both nations are on the opposite ends of a regional struggle over issues such as who will dominate the South and East China Seas, Taiwan, the fate of North Korea’s nuclear program and now hundreds of billions of dollars of trade and millions of jobs, we should get ready for the geopolitical and economic reality that is before us.

The facts are obvious: America and China are now enemies. And there is no turning back.

Who will blink first? Both have a lot to lose and it is questionable what they may gain from the escalation.

One significant difference is democracy, or more precisely, US elections. Senators and representatives from states that would be most impacted by Chinese retaliatory tariffs – particularly agricultural states, already showing anxiety, and many of them have to deal with mid-term elections later this year.

The Chinese leader has just been appointed for life so doesn’t have to worry about votes.

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9 Comments

  1. Reply
  2. Blazer

     /  April 7, 2018

    the U.S will lose a trade war…don’t know about a nuke..one though.

    Reply
  3. Reply
    • lurcher1948

       /  April 7, 2018

      PG im disappointed with you, quoting the voice of national

      Reply
  4. lurcher1948

     /  April 7, 2018

    USA USA USA, and trump is building the most beautiful wall the world has ever seen,with Chinese…steel

    Reply
    • Gezza

       /  April 7, 2018

      Have you got a link showing the wall’s being built with Chinese steel?

      Reply
      • lurcher1948

         /  April 7, 2018

        Have you a link showing that it isn’t Gezza

        Reply
        • Gezza

           /  April 7, 2018

          No need. I’m not making a claim i’s being built with Chinese steel, & it’s extremely likely that it isn’t. Are you making shit up?

          Reply

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