The jury is still out on whether Trump’s tariffs on imports from China will hurt the US or China more. But political analyst Victor Shih has seen how China has been anticipating the latest wave of tariffs, he tells CNN. “But China can sustain that (situation) much more so than American politicians can,” he said.
CNN:
In China, a wide swath of suppliers are likely to see their already narrow margins completely erased, with a new wave of efforts to establish factories in other countries set to begin.
The scale of the tariffs could lead to “millions of people becoming unemployed” and a “wave of bankruptcy” across China, according to Victor Shih, director of the University of California San Diego’s 21st Century China Center. Meanwhile, US exports to China could “go close to zero,” he added.
“But China can sustain that (situation) much more so than American politicians can,” he said.
That’s, in part, because China’s ruling Communist Party leaders do not face swift feedback from voters and opinions polls.
“During Covid they shut down the economy (causing) untold employment, suffering – no problem.”…
Beijing in recent weeks has also been talking to countries from Europe to Southeast Asia in a bid to expand trade cooperation – and one up the US by winning over American allies and partners exasperated by the on-again-off-again trade war.
But it’s been bracing for US trade frictions since Trump’s first trade war and his campaign against Chinese tech champion Huawei, which were a wake-up call to Beijing that its economic rise could be derailed if it wasn’t prepared.
“The Chinese government have been preparing for this day for six years – they knew this was a possibility,” said Shih in California, who added that Beijing had supported countries to diversify supply chains and looked to manage some of its domestic economic challenges in preparation, among other efforts.
Today, China is much better placed to weather a broader trade conflict, experts say. Compared with 2018, it’s expanded its trade relations with the rest of the world, reducing the share of US exports from roughly one-fifth of its total to less than 15%.
Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Get in touch or fill out our speakers’ request form.
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