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Goldman Sachs: US-China Trade War Is Looming

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China Calls For War On Us
PHOTOGRAPH: Flickr/CDC Global | Goldman Sachs warns about a looming trade war between the US and China.

China calls for war on US soon?  The United States and China are not in a trade war at this time. However, an American multinational finance company warns the risk of one is rising fast. A Goldman Sachs analyst recently said there is “little reason to believe” that US President Donald Trump will withdraw his plans of imposing high tariffs on Chinese imports.

Even before he started his term, Trump has already been very vocal about his disdain for free trade. Throughout his presidential campaign, he has proposed a variety of potential tariffs on imports to the United States. His team suggested 10 percent tariffs on all imports but Trump mulls up to 45 percent especially on Chinese exports.

According to RT News, he argues several Chinese policies puts America at a disadvantage, citing the Asian country’s currency manipulation, theft of trade secrets, lax labor, environmental regulations and hacking.

“We believe the Trump administration is likely to make an announcement on China’s currency policy and impose unilateral tariffs on a number of products,” the analyst said. “In general, we expect this administration to be much more active in using existing ‘trade enforcement’ tools than recent administrations.”

However, the company expects the president not to implement the blanket 45% tariff anytime soon. Goldman Sachs says they might limit their activity on targeted actions first and use the blanket tariffs later.

US-China Trade War

Should the 45 percent tariff push through, it means a Chinese-made product originally priced at $100 would now cost up to $145. Per, Business Insider, the new policy wouldn’t go well with China as it would harm Chinese producers. According to Chinese trade expert Tu Xinquan, imposing such a trade regulation could set off “a full-blown trade war almost instantly”.

China would certainly make an equivalent amount of harm to the American economy and go beyond Trump’s measures. The Asian superpower, for example, could mirror the same trade policy but impose as high as 80 to 90 percent on US imports. Or perhaps, it might suspend copyright enforcement of U.S. intellectual property.

Xinquan says an across-the-board tariff of any size on imported Chinese products would significantly affect the US. “China would not tolerate even 1 percent more in tariffs than what is imposed on other countries.”

China Calls For War On US

Tensions between the two superpowers have already been high even before Trump’s floating of tariffs. As previously reported, the US and China have long been at loggerheads over the disputed South China Sea.

Most recently, Beijing has accused Trump of destabilizing East Asia for its intervention on its territorial feud with Japan. The US has notably pledged to defend Japanese Islands claimed by China.

China Calls For War On US. Donald Trump speaking to supporters at an immigration policy speech at the Phoenix Convention Center in Phoenix, Arizona.

“I made clear that our long-standing policy on the Senkaku Islands stands,” US Defense Secretary James Mattis announced on Saturday. “The US will continue to recognize Japanese administration of the islands and as such Article 5 of the US-Japan Security Treaty applies.”

China responded to the US stance on the disputed islands, insisting the islands are part of their territory. Beijing warned the US should “adopt a responsible attitude and stop making wrong remarks” about the Diaoyu Islands.

Chinese military commanders have admitted war is now a “practical reality” with the deteriorating ties between the two nations. Trump’s rhetoric about the South China Sea apparently made the situation much more dangerous.

Also Read: Donald Trump Defends Putin & Says US Has Plenty Of Killers As Well

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