The office of the US Trade Representative announced a proposed tariff list on 1,300 Chinese products worth about $50 billion on Tuesday. The wide-ranging list covers aerospace, information and communication technology, robotics and the machinery industries. The US has obviously targeted China’s high-tech sector, with an aim to restrain Chinese exports to the US and undermine China’s high-tech development.
China has responded immediately. The Ministry of Commerce and Ministry of Foreign Affairs both issued statements condemning the US practice. The Ministry of Commerce spokesperson said China will adopt an equal scale of countermeasures on US exports.
China imposed retaliatory tariffs on US products worth about $3 billion as a response to US tariffs on Chinese steel and aluminum, and it took effect on April 2. The latest list the US unveiled under the section 301 investigation, along with China’s statements to strike back, beat the drum for a trade war.
The US attempts to attack China’s “Made in China 2025” plan. However, China’s astronautics and aeronautics industries have a strong independent research and development ability. China has surpassed the US in key areas such as 5G communication technologies and its robotic technology is competitive. It’s unrealistic for the US to block these developments.
The actions of the US remind us that China cannot count on any help from the US to develop high-tech technology, and it has to develop an independent ability. The Chinese market should lean toward local high-tech companies. US communication products pose more threats to China’s national security than Chinese products do to the US. China mustn't let down its guard.
Since the US has initiated the trade war, China’s countermeasures should deal a heavy blow, hitting what the US fears most.
We strongly recommend starting with US soybeans and corn products. If its agriculture industry feels the pain, it will cause an enormous spillover effect in the country with strong political impact. The ruling GOP will pay a huge price. US soybean farmers are already very nervous and have run ads on television to oppose Trump from launching a trade war. Their anxiety will put pressure on US policymakers.
US automobile industry should come next. Many US enterprises such as General Motors have factories in China. Beijing should substantially increase the import tariffs on US vehicles and their components, prompting US manufacturers to transfer more production to China. In that case, relevant manufacturing in the US will be further depressed. Since China has long been the world’s largest auto market, it has a dominant influence worldwide in this field.
Beijing should also cut orders from US aircraft maker Boeing and order from Airbus instead.
China has many cards to play. The branches of US companies in China produce and sell over $200 billion worth of products in China every year, yet Chinese local companies have the ability to replace most of them. US service trade with China has also been growing rapidly. Beijing has a lot of room to suppress the US in this regard.
Some US elites stubbornly believe that the Chinese economy’s dependence on the US market is much higher than the US economy’s dependence on the Chinese market. They are pushing Washington to change its trade policy with China based on their vague understanding. But the truth is that the total size of China’s consumer market has already surpassed the US. The logic that China is more dependent on the US is untenable.
The US is trying to strangle Chinese high-tech development while containing China's rise through the trade war. Washington is afraid of China’s rising competitiveness in the field of high technologies. However, it adopts a measure of isolationism instead of motivating the US to compete.
China should make the US pay the same price, force the US to rethink the strength comparison between the two countries and reflect on how to get along with China in the future