Trump's decision to impose a 10% tariff on $200 billion of imported Chinese goods means that America is now levying extra taxes on a total of roughly a quarter-trillion dollars' worth of products from the People's Republic, showing that the trade war has indeed taken off. Furthermore, these newly proclaimed tariffs will increase to 25% by the beginning of next year if a trade deal isn't reached with China before then, which was seen as such an affront to China's international dignity that it vowed to respond with its own tariffs on $60 billion of American imports. In the fast-moving tit-for-tat between the two Great Powers, Trump then accused China of seeking to interfere in the upcoming elections through its specific targeting of certain categories of US workers, ironically disregarding the fact that the US' own tariffs could also lead to domestic political consequences in China, albeit of a different type.
Right now neither side looks willing to budge on their positions, and there's a distinct possibility that this could soon lead to yet another escalation in their tariff war. Trump's threatening to impose tariffs on another $250 billion of Chinese imports, while some voices have suggested that China's so-called "trump card" would be to levy an "export tax" on products from the US' "Big Tech" companies. The strategic logic behind the second-mentioned possible response is to worsen the growing divide between Silicon Valley and the White House, which has been growing ever since Trump accused some of these companies of monopolistic practices and censorship. Counterproductively, however, it might be the case that such a cunning response by China could be flipped around by Trump as proof of further so-called "meddling" in America's affairs, which might in turn trigger further tariffs and so on and so forth.
However it evolves, one thing is clear, and it's that the US and China both regard the tariff war as an issue of pressing national security importance, thus making a "compromise" all the more difficult.
Andrew Korybko is joined by David Hungerford, Veteran grassroots activist and economist, and Scott Gibbons, author of the book Trapped by History: the Remaking of America and Death of the Middle Class, The Millennial Metropolis: Power Cities in the Age of Trump, and a forthcoming book, Trumped by History: The Resurrection of the Great American Middle Class.
Want to sound off and share what you think about this? Send us an email at email@example.com or find us on Facebook!