BLUSTER ASIDE, U. S. AND CHINA VULNERABLE TO TARIFF TRAUMA
WASHINGTON — The U. S. and China have been flashing a lot of bravado just before firing the first shots in a conflict that risks erupting into a mutually damaging trade war.
“China will not bow in the face of threats and blackmail, nor will it be shaken in its resolve to defend global free trade,” a spokesman for Beijing’s Commerce Ministry declared Thursday, one day before the two sides were to subject billions of dollars of each other’s goods to punishing tariffs.
President Donald Trump, who ran for the White House on a vow to force China and other nations to reform their policies, has insisted that a trade war would be easy to win.
Yet among the people and business in both countries that are suddenly under threat from higher costs, closed- off markets and deep uncertainties, there’s far less confidence. A trade war between the world’s two biggest economies will leave casualties — from makers of musical instruments to farmers in America’s Midwest to a manufacturer of soldering irons south of Shanghai.
In some areas and industries, pain is already being felt.
“There’s going to be an awful lot of battles lost on the way,” said Tim Velde, a farmer in western Minnesota’s Yellow Medicine County who is bracing for China’s tariffs on American soybeans. “I don’t see anybody winning.”
At 12: 01 a. m. Eastern time Friday, the United States was set to slap tariffs on $ 34 billion in Chinese products. And Beijing was ready to respond in kind. From there, the hostilities could escalate quickly and drastically. Trump has threatened to slap tariffs on up to $ 450 billion in Chinese imports — nearly 90 percent of all goods China sent the U. S. last year — if Beijing continues to retaliate and doesn’t yield to Trump’s demands.
The Trump administration wants China to drop what it calls its predatory drive to supplant American technological dominance, through tactics that include forcing U. S. companies to reveal trade secrets in return for access to the Chinese market and committing cyber- theft.
In selecting American products for retaliatory tariffs, Beijing chose many that would inflict political as well as economic pain. Its target list is heavy on American farm exports — a shot at Trump supporters in the nation’s heartland. Farmers are also well- represented by lobbyists and powerful members of Congress who might be able to influence the Trump administration.
Automakers could endure pain, too, once China applies higher tariffs to vehicles from the United States. Beijing already imposes a 25 percent tariff on imported autos. Retaliatory tariffs would likely double that tax, said Kristen Dziczek of the Center for Automotive Research, an industry think tank.
Parrish Akins, a farmer in Nashville, Ga., estimates that 50 percent of his cotton is exported out of the country, China being one of the main recipients.
“We’re very concerned about tariffs,” said Akins, who despite the potential effects on his business supports Trump’s policy on tariffs.
“We’ll suffer in the short term but the long term effects of fair trade will be positive for American agriculture and American industry.”