Will China hit Hollywood and N.Korea diplomacy in US trade war?
BEIJING: China may look beyond tit- for- tat tariffs in the looming trade war with the United States, analysts say, with a range of creative options at its disposal, including targeting Hollywood films or dragging its feet on North Korea.
Fears of a debilitating trade war between the United States and China are rising after US President Trump said up to US$ 450 billion in Chinese goods – nearly all of its exports to the US – could be in the firing line for higher taxes.
Beijing immediately responded, calling Trump’s threat ‘blackmail’ and warning it could hit back with “strong countermeasures combining quantitative and qualitative measures”.
But with only US$ 130 billion of imports from the US last year, how would China hit back? Why is Beijing retaliating?
“Retaliation has to be done, if you don’t retaliate you lose even more, so that’s why you have a trade war,” said Yukon Huang, a senior fellow at the Carnegie Endowment for International Peace who has discussed the trade tensions with top Chinese officials.
Other countries have learned from Japan’s experience, Huang said, alluding to the Asian giant’s historical trade tensions with the US, which cooled off only after Tokyo accepted quotas on exports to the US, reduced its import tariffs and allowed its currency to appreciate.
“Japan lost 20 years,” Huang said, referring to the country’s two decades of no growth.
“You both lose, but if you don’t do that, only you lose.”
Beyond tariffs: how else can China hit US products?
The iPhone X, Buick Excelle car, Starbucks’ double mocha macchiato and tickets to see Tom Cruise’s summer action flick are all hot sellers in China.
They could all become subject to restrictions should tensions snowball into an all- out trade war with the US, analysts say.
Beijing has shown to other countries that it can use wide-ranging tactics to mete out economic punishment. — AFP