China is Already Threatening to Cut Sales of U.S. Products (Namely the iPhone) if Trump Pursues Trade War
It’s barely been a week since Donald Trump scored his shocking victory in the U.S. Presidential election, but the possibilities of what a Trump Presidency will mean for international relations is already coming into focus. And the picture might not be a very pretty one—at least as it relates to China.
An editorial published on a state-run newspaper’s website on Monday said President-elect Trump would be “a naïve fool” to launch an all out trade war against China. During the hotly contested race for the White House, Trump on numerous occasions promised to go after Beijing with “defensive” 45 percent tariffs on Chinese imports and accused the country of manipulating currency.
In its editorial piece, the Global Times warned that pursuing measures like the tariff would be “a grave mistake.”
“If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance and incompetence,” the editorial stated.
In response to the proposed tariffs, the editorial said that Beijing would introduce immediate countermeasures, which include halting sales of the iPhone, among many other things. “A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted,” it stated. “China can also limit the number of Chinese students studying in the US.”
Strangely, the editorial was published just hours after the President-elect spoke with China’s president Xi Jinping in what was characterized as a productive and respectful phone call.
“During the call, the leaders established a clear sense of mutual respect for one another, and President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward,” a statement from the Trump camp said, via The Guardian.
Then there’s the question of legality: Could President Trump actually impose this 45 percent tariff, or was it just political grandstanding during a contentious election? The answer to that question is a bit murky.
As Consumer Technology Association CEO Gary Shapiro told the press during his pre-CES Unveiled New York new conference, the legal hoops that President Trump would have to jump through to get such a tariff passed would likely take more than the four years of his first term.
But even if we were just talking about tariffs imposed by executive action, the sitting president only has the legal authority to impost tariffs of up to 15 percent for 150 days to “combat balance of payments deficits,” Forbes explains. Aside from having to deal with our own laws on the matter, the Trump Administration would have to navigate international trade agreements already in place as well as the World Trade Organization’s laws on the matter, which state that tariffs can only be imposed when there is “material injury to the domestic industry.”
So, while this is an issue that will continue to get attention in the media—and is something that we’ll be keeping an eye on with regards to how it could impact the consumer electronics industry—don’t expect to see anything with this 45 percent tariff or the Chinese trade war actually materialize.