'As of May 10, Mr. Trump has arbitrarily increased tariffs on Chinese goods imported into the US, worth about 200 billion dollars, from 10 % to 25%. It is an action without any foundation. An action that makes no sense at all, as China can and will retaliate – and retaliate much stronger than what the impact of the US’s new “sanctions” may bear – because these arbitrary tariffs are nothing else but sanctions. Illegality of such foreign interference aside, there is hardly any serious economist in this world, who would favor tariffs in international trade among “adults” anywhere and for any reason, and, of course, least as a punishment for a nation. All that such sanctions do is pushing a partner away. In this case it’s not just any partner; China is a key trading partner of the United States.
The new tariffs will hardly harm the American consumer. There are huge profit margins by US middlemen and importers of Chinese goods. They are competing with each other within the US – and the consumer may not even notice a thing. However, the US economy will likely suffer, especially from Chinese retaliatory actions.
A spoiled child, what Trump is, doesn’t get his way – and goes into a tantrum, not quite knowing what he is doing, and knowing even less what he may expect in return.
Back to trading with China. China has a million ways (almost) to retaliate. China can devalue her currency vis-à-vis the dollar, or China can dump some of their almost 3 trillion dollars-worth of reserves on the money market – just take a wild guess about what that would do to the hegemony of the dollar which is already in dire straits – with ever more countries departing from the use of dollars for international trade.
And just hypothetically, China could stop altogether exporting all that Walmart junk that American consumers love so much – just for a while. Or China could stop making iPhones for the US market. Guess what kind of an uproar that would trigger in the US? – Or China could of course, levy herself high tariffs on US imports, or stop US imports altogether. China being part of the Shanghai Cooperation Organization (SCO) – actually the co-founder of it – has many alternatives to cover her demand. No need to depend on the west.
Let’s not forget, the SCO which also counts as its members, Russia, India, Pakistan, most of Central Asia, and Iran poised to become a full-fledged member – covers about half of the world population and a third of the world’s economic output, or GDP. No need to look to the west for ‘survival’ – those times are long gone.
But more importantly, what all this looks like to me – is the desperate thrashing around of a dying beast, or in this case a dying empire.'
Read more: Trump – from China to Iran to Venezuela – Threats and Sanctions Everywhere – A Chronicle of Disorganized Chaos Foretold
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