If Trump instigates a trade war with China, there will be dire consequences for American companies like Apple, warns an editorial in China’s Global Times, a state-run newspaper.
One of the many outlandish promises Trump made during his campaign was to impose a 45 percent import tariff on Chinese goods. Earlier this year, he also vowed to force businesses like Apple, which manufactures the majority of its products in China, to bring jobs back to the US, proposing a 35 percent tax on companies that did not comply.
Though Trump has already begun backpedaling on some of his more drastic proposals, such as his calls to repeal Obamacare and to force South Korea and Japan to pay more for their defense, it is an open question whether he will follow through on his commitment to declare the world’s second-largest economy a currency manipulator and impose tariffs.
On that issue, Trump’s economic advisor Judy Shelton recently stated in a Bloomberg interview that the president-elect has been “intellectually consistent” in his view that it is unfair of China to debase its currency in order to make its exports more competitive and hurt American manufacturers in the process.
“China will take a tit-for-tat approach,” the Global Times declared in response. “A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”
The state mouthpiece also hastened to remind readers that the last time tariffs were imposed on Chinese tires by the Obama administration, a retaliatory tariff on US chicken was adopted by China, leading to economic losses on both sides of the Pacific. The lesson to be drawn from this is that trade relationship between the world’s largest economies cannot be torpedoed without severe consequences for everyone.
“Trump as a shrewd businessman will not be so naïve,” the Chinese newspaper opined. Apple stock fell another 2.5 percent on Monday following the publication of the Global Times editorial.
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