In his own thoughts, President Trump is a four -dimensional deal maker who is always out of his counterparties. In his real trade war, however, Trump shown his cards to his most powerful opponent and has unveiled some of his limitations.
A few weeks of manic tariff activity by Trump and mass confusion in the financial markets have finally offered some clarity: although Trump wants to make the entire trading system of America again, his real target is China.
Up to and including 9 April, Trump had imposed new rates on imports from almost every country, plus extra import load on certain product categories, including cars, steel and aluminum. Nobody has a delay.
While the financial markets shrink, Trump finally declined on April 9 by suspending the majority of his land -specific “reciprocal” rates for at least 90 days until the beginning of July. The only remarkable exception is China, who received the opposite treatment: even higher rates.
The Trump rate on Chinese import is now 145%, an increase of around 6%, on average, when Trump took office and has trained his sights on the world’s economy in the world. The rate percentage is so high that it is “an effective blockade for Chinese import,” said Heidi Crebo-Rediker, former main control at the Ministry of Foreign Affairs and a senior fellow at the Council on Foreign Relations.
Read more: What Trump’s rates mean for the economy and your wallet
China leaves that in a unique counter position with Trump. China has taken revenge against the Trump rates much more aggressive than most other American trading partners, including many who do not take revenge at all and offered to make concessions instead.
The China rate on American goods is now 125%, collected from 84% on Friday, and Beijing has taken other measures to punish American companies. The rhetoric of China has also been much more warlike than that of anyone, with the Ministry of Trade that says in a statement that China will “fight to the end.”
China would avoid a trade war if possible, but it is a proud country led by a stubborn autocrat, President Xi Jinping, who undoubtedly hates the bullying of Trump. XI and his framework also regard China as a rightful super power trying to make its way to parity with the United States, and perhaps beyond. XI has one National Creed of self -reliance In recent years, and he can very well regard a trade war with Trump as a melting pot China has to continue on the way to economic quantity.
XI has some advantages. Firstly, Trump’s rates are a tax on American companies and consumers, not on Chinese exporters, therefore the first line of damage to US stock prices. Rates increase stock prices because they increase the costs for companies and lower the outlook for future income. They also harm Chinese exporters, because the rates effectively increase the costs of their products, so that American buyers are looking for other providers or simply buy less. But the US stock market is the first to feel the damage because stock prices are in fact a predictor of future economic developments – those markets now regard as bad.
