The US President Donald Trump said the trade war with China was “lost many years ago” by his predecessors. His statement comes amid a turbulence in financial markets after Washington imposed a 25% duty on 1,300 Chinese products. Beijing responded to the measure with its levies against American goods, ranging from soybeans and wine to Boeing aircraft – a more severe reaction than many expected.
Despite the mounting tension, the US president said his country is not in conflict, Bloomberg said.
“We do not find ourselves in a trade war with China – the war was lost many years ago by foolish or incompetent people who represent the US”, wrote Donald Trump in Twitter. “We now have a trade deficit of 500 billion USD per year, and the theft of intellectual property for another 300 billion USD. We can not allow this to continue”, added he.
Trump strike on Beijing’s plans to dominate the sector of strategic technology by introducing duties on 1,333 Chinese products – from semiconductors to lithium batteries. In response, China said it also introduced import levies on US imports worth about 50 billion USD.
And while Beijing’s actions have sparked a collapse in US futures and international stock prices, the focus is on whether Trump will take action. The US president has ordered the finance ministry in Washington to draw up a project to curb Chinese investment, which in turn could lead to further retaliation. However, both countries still have time to give up their actions. The US levies have to wait for a 60-day period of public talks, and Beijing said their duties would come into force at the same time.
The both presidents Xi Jinping and Trump have reasons to believe that the other will take the first step back. The Chinese Communist Party relies on the decades-long economic boom in the country to maintain its one-party government and can not afford a downturn.
At the same time, Donald Trump has no reason to worry about politics, including the forthcoming elections of the Congress in November. The Chinese Duty List strikes the farming, which Republicans need to keep control of Congress. Similarly, worries about commercial conflict led to a cooling in stock prices.
Efforts to end the conflict are also compounded by the uncertainty surrounding what Trump wants – quick concessions or a fundamental shift in trade relations with Beijing.
The US president may be trying to start a bigger battle against China’s “Made in China 2025” program, which is trying to reach a dominant position for the country in the technology sector. The authorities in Beijing have already signaled that they are ready to admit more foreign participation in sectors that improve the services sector, such as banking and insurance, but could consolidate their position if the conflict threatened on a wider scale Chinese ambitions.