Trump claims China rebuilt itself with money drained out of US

Mark Kolbe  Getty Images

Mark Kolbe Getty Images

In the past week the slow dribble of tariffs and counter-tariffs has rapidly grown into a full-fledged confrontation between the world's two greatest economic powers.

The president had commented that he would consider subjecting an additional $267 billion worth of Chinese goods to tariffs if China retaliated. One top Chinese official has warned darkly that the country could cut off exports of key components to USA manufacturers if tensions worsen.

The two economies escalate a trade war on Tuesday after Beijing added 60 billion dollars of U.S. products to its import tariff list in retaliation for U.S. President Donald Trump's planned levies on 200 billion dollars worth of Chinese goods. One worry for the U.S. is that China, the US's biggest creditor, will scale back purchases of Treasuries, an option that China's ambassador to the USA doesn't rule out. But to encourage these changes, the United States needs to nudge China's government to adopt them as part of its own internal reforms. If not, the economic losses from his trade-war adventure will really start to mount. We have a lot more to come back with", Trump told a packed rally in Missouri for Republican Senate candidate Josh Hawley on Friday (Sept 21)."We are cracking down on the unfair trade practices of China...

China is predictably angry at the fact that Trump is derailing their gravy train after picking the USA apart for so many decades.

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In its trade conflict with China, too, the USA has put increasing pressure on China to accept its insatiable demands. Caught in the crossfire are companies like Cedar that depend on affordable imports and other businesses whose exports may now become prohibitively expensive in China.

It's the long term that counts, and this trade war will probably not be settled for a long time.

"The economic outlook is not ideal of course, and it will last longer than people expect", Ma said at the World Economic Forum in Tianjin. Domestic consumption contributed 78.5 percent to the growth rate. It's also true that the Chinese financial system is as overloaded with bad debts as American banks were in 2008. Workers' wages fell economy-wide, investors saw lower returns on capital and about 200,000 jobs were lost. It's more like a commitment to both domestic and worldwide audience. In this scenario, it's global trade that would collapse, which wouldn't be in anybody's interest.

The tariff exchange is creating casualties in the United States.

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But what's clear is that the latest fight in the escalating trade war is likely, one way or another, to affect consumers, companies, markets, the economy and the political landscape. "For example, the United States exports automotive parts to Mexico to be assembled into cars".

That's not just Chinese paranoia.

Sherill Mosee, founder of MinkeeBlue, which makes travel and work bags made in China, says she might have to close her company by next spring if she doesn't find a new manufacturing partner for her handbags, which are now made in China. "The immediate impact will be to raise prices on consumers and tax American business and manufacturers". But the longer the dispute goes on, the more both sides will see casualties.

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