The U.S. and China have not always been on good terms, that is a fact. Sometimes, it Is inferred that this is mainly the fault of the U.S., and in some ways, it can be.
The issue of the recent tariffs on steel and aluminum, proposed by Trump, seems to be a prominent indication of the U.S.’s unwillingness to compromise. Though the U.S. has exempted their allies, such as the EU and Japan, on tariffs on the imports, they have begun to target the tariffs toward China. This has angered the nation, for obvious reasons, and given a justification for retaliation.
Chinese commerce Minister Zhong Shan stated that the proposed metal tariffs and this potential trade war could be catastrophic for the world economy as a whole and shatter global growth.
One prominent company that is at stake because of the proposed tariffs is Boeing, which is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. This company is known as one of the largest U.S. exporters, if not the largest. It sends most of its supplies abroad, gaining a huge chunk of its profit from exporting to China especially, one of the fastest growing aircraft markets. Ultimately, the company would be the doorway that China would use to exact their revenge during a potential trade war. Since China is such a sole provider of the company’s income, they can refuse to buy their supplies and upset the business.
However, China’s revenge on this company would also hurt them as well. China does not yet have the resources and ability to provide the services that Boeing does domestically and is in dire need of their businesses. So if they do nothing about these imposed tariffs that are significantly affecting their economy, they are basically seeing downfall of the second largest economy in the world. This would then, in turn, affect many other countries that rely on the support of such a powerful entity.
Considering that China is being singled-out, they have sufficient reason behind any revenge enacted on the United States. Though they haven’t yet, the potential of any retaliation of any sort could result in something damaging, not only to the US, but to China, and many other countries involved in any import and export.
A trade war could be catastrophic, but so would the weakness of China’s economy if no action was taken. The fact of the matter is, either way, this could be avoided with the retraction of Trump’s proposal. Otherwise, what would be the best result?
