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March 27, 2019
China Markets Herald Economist

President Trump’s Trade War with China is the Essence of MAGA

The Trump administration and China haven’t enjoyed healthy relations since the 2016 elections. Donald Trump signed multiple bills to put tariffs on Chinese products that the United States imports. So far, the US government has levied around $37 billion taxes on Chinese products that are imported to the States.

The government further threatened to increase this tax net to all $504 billion of imports from China in order to control the trade deficit between the two countries. The measures are expected to provide relief to the US workers who are developing their own products.

Some experts predict that these are temporary measures of relief and in the long-term, will create an unsustainable relationship between China and the US. However, from the latest developments, it seems that President Trump has somewhat managed to rattle the Chinese leaders. According to the recent reports, the Commerce Ministry of China, the police, and other entities have summoned the exporters and talked to them about contingency plans in case the US further tightens this new policy of Chinese exports to America.

The reports tell that the agencies have directed exporters to devise plans in order to shift exports to other countries and possibly lay-off some workers as sales take a hit. Despite that, the Chinese leadership is confident that they will outlast the trade war with Washington.

The Chinese government is getting a lot of suggestions on how to deal with President Trump’s pressure as well. Some are suggesting China propose a deal or maybe cut prices so the US doesn’t further tighten the policy.

Some are arguing that China should go on the offensive and put America in the defensive corner. However, that seems very unlikely as the reports are indicating. China, it seems, is open to talks because it realizes that it has had a long run in unfair advantages and must be a bit fairer in order to keep doing business with the strongest economic country in the world.

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