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Trump recently enacted tariffs of up to 50% on washing machines and parts, and 30% on solar panels which, while applied globally, are seen as being aimed and South Korea and China respectively. These came after complaints by American companies to the US International Trade Commission that China was unfairly subsidizing solar panels and the South Korea was dumping washing machines into the US market.

South Korea has filed $711 million worth of annual trade sanctions with the WTO as a response, but China's adherence to WTO rules has been questionable since it joined and it has only filed for a discussion with the US.

What politically feasible options does China have to respond to this, short of a trade war? Thinking more international-relations focused but welcome domestic-policy related answers as well.

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They could respond with sanctions and tariffs of their own, possibly targeted towards either energy imports or foodstuffs. Or they can lodge a dispute with the WTO.

China has already implemented new quality rules for U.S.-based oilseeds (a.k.a. soybeans, sunflower seeds, peanuts, cottonseed) that took effect on January 1st, 2018, with some estimates stating that half of the soybeans the U.S. exported to China in 2017 would not be able meet the new standard. Recently, China has also opened investigations related to U.S. subsidizing and dumping of sorghum, where China receives 79% of the U.S. exports.

So while I doubt that neither China nor the U.S. would be interested in a complete trade war, the likely options for China are to also look at what they import from the U.S. and selectively increase tariffs for targeted industries. Or lodge a formal complaint with the WTO.

But keep in mind that trade with the U.S. and its consumer base has contributed greatly to China's doubling of its GDP between 2010 and 2017 and the rise of the Chinese Consumer. Similarly, the U.S. enjoys the fruits of cheap labor with very little regulations without having to work in sweatshops themselves, and the trade between the two is generally seen as a net benefit for both. But the current U.S. administration was elected while campaigning with an all-around protectionist message with even direct and pointed criticism of Chinese policies, so they ostensibly must do something or risk not living up to a lot of their campaign promises. The Chinese may understand this, and could also decide to just wait Trump out.

  • Re "sweatshops ... net benefit": please clarify whether "net" is meant in a corporate manager short-term financial sense, or is meant in a national sense, or an international sense, or directly, as in how sweatshops may increase sales for the netting industry. – agc Feb 14 '18 at 19:18
  • @agc I mean it as in there is give and take on both sides as there is with most deals, but both sides are generally regarded as better off being trading partners than not. – Jeff Lambert Feb 14 '18 at 19:22
  • Re "both sides": so in an apparent mutual national sense then, where "both sides" are national governments, or invested expert appointees thereof. But when you say "the U.S. enjoys the fruits of cheap labor with very little regulations without having to work in sweatshops themselves" ... that tends to suggest U.S. workers and consumers somehow come out ahead there, which seems less than evident, i.e.: the race to the bottom, shuttered main streets, service sector overwork, shoddy and obsolescent products, adulterated medicine, et al. – agc Mar 20 '18 at 7:19
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The three most obvious 'options' that China has:

  1. They rectify the behavior that has given so much steam to the idea of imposing tariffs on them on the first place. It would be hard for the United States to 'get away' with imposing tariffs if it wasn't an open secret that China engages in unfair trade practices/has unnaturally low costs due to nonexistent/unenforced labor/environmental regulations.

  2. They bring some action to the WTO, alleging unfair practices on the United States part. This may or may not result in a ruling in their favor.

  3. Engage in tit for tat until one side or the other is no longer willing to escalate, or it becomes a full scale trade war. This might devolve into non-economic actions, like kicking out diplomats.

If you consider 'waiting' to be an option, there is a fourth one. It's very likely that if China is patient, one of the multinational corporations (IE: Google, Apple, any company offshoring in general) will use their bought influence to undermine the tariffs at some point.

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