China intends to crush the trade war

China has retaliated hard in the trade war with the United States by announcing unexpected climbing measures against Donald Trumps' prices. These included an additional 34% rate on all imports from America to correspond to those listed by Trump on April 2 for imports from China, as well as other measures. Chinas' response includes three things: prevailing on unilateral intimidation prices, an appeal to arms to other nations to retaliate against Washington and pressure on the United States to go to the negotiation table to conclude an agreement. The last thing that the Beijing government is currently wants, given its fractious economy, is a full -fledged trade war.

Although the American administration's method and tactics have encountered disappointment and disdain, it is important not to forget what Trump is after a complete reorganization of the world trading system. Its task may not be possible or at least more unpleasant than expected, but, leaving aside income and lever effect, the pricing policy of the premium on China supply chains which were created more and more. This includes the bypass of the Chinese practice of the Transith, that is to say the use of third countries to send Chinese products to the United States and other nations, for example, to promote the commercial imprint of China, the obscure country of origin of the country of origin or the bypass of trade barriers and export controls.

Note that among the highest rates announced by Trump on April 2, apart from China, were in Vietnam, Cambodia, Indonesia, Thailand and Bangladesh, as well as in India. During the weekend, it was reported that Vietnam, Cambodia and India were in negotiations with the United States to obtain lower prices in exchange for concessions but unknown. These concessions will almost certainly include actions, including prices, against Chinese goods and investments.

On the details of American-Chinese trade, the Trumps administration has left no doubt that even if it is probably still open to a given negotiation, a fundamentally mediocre commercial relationship has become even more tense. The average American price on all imports of Chinese products which represented approximately $ 440 billion in 2024 is now about 65%, including the 34% announced last week, the two 10% increases announced earlier this year and 11% preexisting. Some goods have a much higher rate, such as 100%electric vehicles. It should be noted that the United States also has a complex system of controls and restrictions on certain exports to China, in particular in advanced technologies, named companies and investment flows to and from the country.

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Chinas' reprisals against the last Trump prices were stronger than expected. It takes the average Chinese price on imports of American goods which represented approximately $ 143 billion in 2024 to around 50% (including 34% of tit-for-tat, and a preexisting level of 15%). The Chinas announcement on April 4 was accompanied by a series of additional measures which targeted certain specific American companies, launched anti-monopoly and competitive surveys on others, and imposed export controls on seven rare land.

The unilateral nature of the commercial relationship means that Chinese exports to the United States, under the rate levels of new levels, represent approximately 2.3% of Chinese GDP, while American exports to China represent only 0.5% of the GDP of the Americas. The price was therefore much larger for China. Even thus, the Chinese economy of 20 billions of dollars should be able to absorb it, especially if it takes corrective measures to mitigate the effects on export companies and hundreds of thousands of jobs in coastal provinces mainly oriented towards export.

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Beijing could, for example, channel the pricing income received from its own export companies, including state enterprises. This will almost certainly allow the renminbi to reduce the drop in Chinese export prices and therefore defuse part of the price increase caused by prices in the United States. He will most likely add to the monetary and fiscal relaxation of the policy which is already cooked in the economic perspectives of 2025.

We must therefore expect an additional reduction in already low Chinas Chinas and other monetary relaxation, as well as more loans by local governments, and additional assistance for the besieged housing sector. Many Economist Hope Beijing Will Use This Trade War Moment To Bolster Strong Consumer Demand Within China, But the Governments Firmitment to Industrial Policy and Exports Means its Political Capacity to Embrace Meaningful Changes to Instrux and Wealth Redistribution and the Distribution of Economic and Political Power is Weak.and China Will Certainly Find It Harder to Defray The Effect of Tariffs by Exporting More To And Investing More in Third Countries, Given That Many of these are now subject Themselves to High Tariffs or Will Office with Trump which promotes the United States rather than China.

There are also other tensions at stake, including the ban (now extended to June) of Tiktok in the United States unless it is sold to an American company, and the sale of more than 40 ports, including Panama by Hong Kongs CK Hutchison with the director of American active ingredients, BlackRock. Are there light points in the incessant gloom resulting from commercial conflicts and commercial wars?

One is the possibility that economic benefits are less draconian than the carnage involved by the recent fall in the financial markets. It will not go unnoticed that we have seen decreases marked by the value of the US dollar, bond yields and the price of oil, which can at least be considered compensations on prices, if not the stimulus.

The other is that it is even more likely than besides, in the coming months, the United States and China could always want an agreement under which they would cancel the sales dogs of war to a certain extent in exchange for concessions. It is as to see who holds the strongest cards: the American customer or the Chinese supplier.

[See also:Trumps tariffs are designed to extend American power]