Saturday, June 30, 2018

U.S. Tariffs Will Severely Undermine Chinese President Xi's Domestic And Foreign Policy Objectives

U.S. President Donald Trump and China's President Xi Jinping arrive for a state dinner at the Great Hall of the People in Beijing, China, November 9, 2017. REUTERS/Jonathan Ernst

Gordon G. Chang, National Interest: Trump's Tariffs Could Crush China's Ambitions

China is not in a position to prevail over a determined American leader.

President Donald Trump on Wednesday handed a reprieve to ravenous Chinese acquirers looking for U.S. tech companies by issuing a statement that he will not put in place across-the-board rules blocking certain investments from China.

On May 29, the White House in a statement promised by June 30 to “implement specific investment restrictions” barring Chinese parties from acquiring “industrially significant technology.”

Instead of using authority granted by the International Emergency Economic Powers Act of 1977 to issue such investment restrictions, the president on Wednesday endorsed legislation, now working its way through Congress, expanding the authority of the Committee on Foreign Investment in the United States. CFIUS, as the Treasury-led interagency body is known, can block certain acquisitions of U.S. businesses by foreign parties.

“China will closely monitor the legislation process and evaluate its potential impact on Chinese companies,” Commerce Ministry spokesman Gao Feng said on Thursday in Beijing to reporters. “China does not agree with tightening foreign-investment conditions using national security as reasons.” The official reaction was, considering the circumstances, mild, an indication Chinese leaders were relieved by Trump’s decision not to act.

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WNU Editor: If it was not an issue, Chinese President Xi would never have made this direct threat .... Chinese President Xi Tells The U.S. That 'In Our Culture, We Punch Back' (June 29, 2018). Bottom line .... China is seeing its annual $400 billion trade surplus with the U.S. being threatened by these tariffs, money that they have already made plans to spend.

3 comments:

  1. This kind of begs the question, whose dumber, us for allowing ourselves to get into this unsustainable situation or the Chinese for basing their plans on an economic situation that cannot be sustained? Based upon the information available right now I'd say the Chinese are the dumber side.

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  2. Economies fully intertwined like those of China and the U.S.A. when working seem to keep the two nations from military confrontation. But if an economic war begins, and impacts either or both nations seriously, then military confrontation might replace economic confrontation

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  3. This comment has been removed by the author.

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