Just as President Trump is buddying up with North Korea, the US relationship with China is about to tank again. On July 6 the US will officially introduce tariffs on Chinese goods entering the country.
The $50 billion of tariffs have been discussed in great detail over the last couple of months, the world is of course taking advantage of the always reasonable, consistently proportional and often timid US, so the news should come as little surprise. What we don’t know is how big this spat will become.
The 1300-strong list of products subject to tariffs was released back in April, and covers various different industries. The one we want to know about is of course telecommunications and technology, and while there are some very technical specifications, the Trump administration seems to be targeting next generation technology in the China’s Made in China 2025 strategic plan.
“My great friendship with President Xi of China and our country’s relationship with China are both very important to me,” Trump said in a statement. “Trade between our nations, however, has been very unfair, for a very long time. This situation is no longer sustainable.
“China has, for example, long been engaging in several unfair practices related to the acquisition of American intellectual property and technology. These practices, documented in an extensive report published by the United States Trade Representative (USTR) on March 22, 2018, harm our economic and national security and deepen our already massive trade imbalance with China.”
China has of course promised to retaliate, which will be met by further tariffs from the US. This is the unknown; how immature are these politicians prepared to be?
Christine Lagarde of the International Monetary Fund has already warned of the consequences of tariffs, believing there will only be negative consequences for all parties involved and global trade on the whole, however that seems to be of little concern. Trump wants to make a point, and this is not a man who is known for admitting a mistake. How far will this trade war escalate and for how much longer can these supposedly intelligent people ignore the advice of economic experts.
China has yet to take any notable actions in retaliation to Trump’s economic aggression, but we suspect it might not be too long.