Having backed off some other campaign pledges, it’s unclear if Trump will end up slapping punitive tariffs on China – and Beijing has signalled some optimism he will be more pragmatic in office. Still, the message from China is that any move to tax Chinese imports would bring retaliation. The US economy would take a hit and America would damage its longstanding ties with Asia.
“China wouldn’t like to see that happen,” Fu Ying, who chairs the foreign affairs committee of the legislature and was a vice-foreign minister until 2013, said of the US imposing punitive tariffs. “But if so happens, it won’t be one-way traffic,” she said last week in Beijing.
That’s where I think the former vice-foreign minister is wrong. China has rigged the game so that trade with the US is largely one-way traffic.
Container imports and exports at the Port of Los Angeles (FY 2016) highlight the problem. More than 57% of outbound containers are empty. Container shipping represents mainly manufactured goods, rather than bulk imports or exports, and the dearth of manufactured exports reflects the trade imbalance with Asia. Even the container statistic understates the problem as many outbound containers contained scrap metal and paper for processing in Asia, rather than manufactured goods.