The prospect of a trade war between China and the United States has picked up a great deal of traction over the past few weeks as Donald Trump prepares to enter the White House in January. During his successful campaign for the presidency, Trump made clear his disdain for the business practices of the Chinese, an ironic statement for a businessman who has previously sold some products that had a Chinese imprint.
One of Trump’s more nebulous remarks indicated that steep tariffs as high as 45 percent could be applied if China didn’t, in his words, behave with respect to undercutting American firms. He also indicated that he would brand the Chinese as currency manipulators, which sounds bold and challenging. Yet like many things that Trump has promised, the likelihood of such a move having any real impact is considered doubtful, since it meets few of the necessary criteria.
Most economic experts believe that Trump should focus more on the fact that an increasing number of American businesses are being purchased outright by the Chinese. For one thing, it would help block any further encroachment into giving them unfettered access to business and trade secrets that could prove important in the years and decades ahead.
Another important factor in this approach is that it would match the current trend by China to effectively wall off foreign entities from being able to exploit the vast Chinese population. The combination of increasing regulation and limiting overall investment has helped douse much of the previous enthusiasm over entering this market.
China seems fully prepared to enter any battle, indicating that they may seek business partners in other nations or work toward a trade blockade across all of Asia. That would end up resulting in American agricultural interests taking a huge hit.