In the above-linked interview with Reuters yesterday, Red China’s finance minister, Liu Kun, all but admitted that China is losing the trade war with the U.S., and the losses are expected to worsen.
For now the impact of the China-U.S. “trade frictions” on the Chinese economy has been small, but he is concerned about potential job losses and lost livelihoods …
… the Chinese government will increase its spending to support workers and the unemployed who are hurt by the trade conflict, and also predicted bond issuance by local governments to support infrastructure investment this year will pickup and blow past 1 trillion yuan ($145.48 billion) by the end of the current quarter.
So far, China has either imposed or proposed tariffs on $110 billion of U.S. goods, representing most of its imports of American products. Crude oil and large aircraft are key U.S. goods that are still not targeted for penalties.
“We’re responding in a precise way. Of course, the value of U.S. imports of Chinese goods isn’t the same as the value of Chinese imports of U.S. goods. We’ll take tariff measures in accordance to this situation,” … “When we take measures, we try our hardest not to harm the interests of foreign businesses in China. That’s why our tariff measures are targeted to avoid affecting them as much as we can,”
That’s a rare admission that China is already out of ammo in this war. Although the U.S. is poised to slap tariffs on at least $200 billion of Chinese imports – still just a fraction of Chinese imports – China has targeted only half that amount because that’s all it imports from the U.S. In a tit-for-tat trade war, Red China is already out of “tits.”
Some American businesses and industry lobbies, including the U.S. Chamber of Commerce, have criticized U.S. President Donald Trump’s imposition of punitive tariffs on Chinese goods
This statement can’t be allowed to stand without comment. The “U.S. Chamber of Commerce” is not an “American” lobbyist. The Chamber of Commerce is a foreign-based organization, established in France, to promote global trade regardless of its negative impact on the United States. It opposes Trump’s trade policy because global trade will suffer as the U.S. returns to more domestic manufacturing. The “U.S.” Chamber of Commerce is its U.S.-based branch and every local Chamber of Commerce in the U.S. is dedicated to the mission of the parent organization – promoting global trade regardless of its impact on Americans.
The U.S. tariffs have affected China’s economic growth – albeit modestly – and their impact will become even more pronounced if the trade frictions persist, Liu said.
“From my perspective, I’d pay more attention to the impact that the China-U.S. trade frictions has on jobs in China. After all, some firms will be affected, exports will be reduced and production will be cut,” …
China’s urban survey-based jobless rate rose to 5.1 percent from 4.8 percent in June. The government aims to keep the rate below 5.5 percent this year. China plans to increase its fiscal spending to support workers or jobless hurt as higher tariffs kick in. “We will make adequate preparations in terms of fiscal policy, and help unemployed workers find new jobs and ensure their basic social security,” Liu said.
China’s already feeling the pain. They’re losing this trade war, and it’ll get worse for them. In the meantime, the U.S. economy has been going gangbusters, led primarily by big gains in manufacturing, and this is only a taste of things to come if Trump continues to use tariffs to re-establish a balance of trade for the U.S.