China Threatens of “Tit-For-Tat” on iPhone Sales If “Naive” Trump Starts Trade War

Rafia Shaikh
Posted Nov 14, 2016
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Donald Trump, the President-elect repeatedly targeted China during his presidential campaign. He vowed to take a tougher stance on trade in hopes of bringing manufacturing back to the United States. China’s state-backed newspaper has now published a story saying the government would respond with countermeasures if Trump starts a trade war against the country.

The newspaper warns that the sales of iPhones and US cars would suffer a major setback. “China will take a tit-for-tat approach then,” the Global Times said in an editorial published on Sunday. “A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”

Trump promised his voters a 45 percent import tariff on all Chinese goods during his election campaign. Similar to several other areas, it is unclear how it would work. But, should this or any other similar policy come into effect, China will take a “tit-for-tat” approach.

China isn’t convinced Trump would go through with his promises on trade war

The Chinese newspaper called the President-elect‘s trade promises as “merely campaign rhetoric” and questioned its legal validity. As president, Trump can only impose tariffs of no more than 15 percent, and for a maximum period of for 150 days on all imports – unless a state of emergency is declared. Economists are concerned over a potential trade war with China, the country’s biggest trade partner. But, Donald Trump dismissed these concerns at a rally, “we already have a trade war. And we’re losing, badly.”

The piece said Trump is a “shrewd businessman” and “will not be so naïve.” But, if he was serious about the policy, “a number of US industries will be impaired.”

If Trump wrecks Sino-US trade, a number of US industries will be impaired.

Finally the new president will be condemned for his recklessness, ignorance and incompetence and bear all the consequences. We are very suspicious the trade war scenario is a trap set up by some American media to trip up the new president.

The Global Times pointed toward the 35 percent tariffs imposed in 2009 on Chinese tires by outgoing president Barack Obama. China retaliated with its own tariffs on US car parts and chicken. “Both China and the U.S. suffered losses as a result. From then on, the Obama administration waged no trade war against China. If Trump imposes a 45 percent tariff on Chinese imports, China-U.S. trade will be paralyzed,” the publication said.

Like many of his campaign promises, it isn’t clear whether the President-elect will be as aggressive against China when his tenure starts in the Oval Office. Chinese President Xi Jinping and Trump spoke over the phone on Sunday talking about close communication.

“During the call, the leaders established a clear sense of mutual respect for one another,” a statement from Trump’s presidential transition team said. “President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward.”

Judy Shelton, one of Trump’s economic advisors, told Bloomberg in an interview that Donald Trump “is someone who is going to carry through on what he says.” But the Chinese paper points to the President-elect softening his tone on a number of issues since his unexpected election win. Whether the coming months will affect his earlier promises of a US-China trade war, is something economists are hoping for.

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