A
Chinese editorial the day after US President Donald Trump's
inauguration took talks of a trade war even further, speculating on
the possibility of "real war" between the two
Ed Zhang,
editor at large of the China Daily, asked "Will there be a
trade war between the two largest trading powers?" and noted
that many are saying "a showdown with China is unavoidable
and imminent."
Trump showed
no inclination to back down in his inauguration speech January 20,
Zhang said, noting the new president's promise that every decision on
trade, taxes, immigration and foreign policy will be made to benefit
American workers and American families.
Zhang
speculated on what that might mean for Chinese businesses. "If
there is a hike in tariffs across the board, then Chinese companies
will lose a lot of orders for the same goods they have been shipping
to the US market for the last decade," he said. But they
might gain an opportunity to offload products that aren't profitable
or that are made with environmentally costly materials.
"Officials
with China's National Development and Reform Commission may thank the
Trump administration if it can help China offload obsolete,
unsustainable industrial capacity quicker," he said.
Meanwhile,
Chinese business could take the opportunity to seek tax breaks to
help improve their competitiveness, and the country's savings could
be used to upgrade its industry.
But what
will be the reaction, he mused? "No war can be one-sided. The
Chinese government will adopt counter-measures, and local companies
will find more import substitution opportunities in the selected
industries," he guessed.
"And
if a real war is waged alongside a trade war, that will only create
more defense orders for local companies."
Zhang went
on to detail the costs the US would bear as war-maker, saying
protectionism would hurt the US economy and would turn away China's
1.3 billion potential customers. "What real businesspeople
should do is negotiate to strike the best deal they can. Indeed,
since Trump was quoted as having said everything is negotiable,
what's the point of a trade war?"
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