China trade war analyses of deeper nuances and wider

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CHINA Trade War: Analyses of Deeper Nuances and Wider Implications 21 The US is likely to be able to withstand most of the restrictions without significant shortages or pricing impacts. However, given that China can use subsidisation to account for rising import costs, Beijing is in a stronger position than Washington is when it comes to this specific tariff. 21 China already has outlined a strategy to respond in the WTO while also targeting politically sensitive US exports that would squeeze Trump's support base. In February, China opened an investigation into the alleged US farm subsidies for sorghum production. The country's government also has raised the possibility of targeting other agricultural exports, including pork and soybeans, for investigations that could hurt business in states such as Iowa, Nebraska, Indiana and Missouri which are traditional Republic strongholds. Reports have circulated in the Chinese state media that Beijing may drop aircraft orders from the US aerospace firm Boeing Co. in favour of France's Airbus. China included narrow - body aircraft but not wide - body aircraft in its retali- atory tariffs. Only two companies in the world make wide - body planes: Boeing and Airbus. If China put a tariff on planes from the American Boeing but not the European Airbus, it would lose leverage with Airbus with which to extract favour- able prices and access to cutting edge technology. China has imposed tariffs on the easy stuff: luxury goods like American wine and liquor and agricultural goods that are considered luxuries within China, like almonds and pistachios. China s Options China can limit the operations of American banks and other service provid- ers in China. The government could also urge the Chinese public not to buy 21 “ Here Are the Major Takeaways From Trump's Tariff List ”, The Stratfor, April 4, 2018, available at: - states - china - trump - tariffs - trade
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US - CHINA Trade War: Analyses of Deeper Nuances and Wider Implications 22 American brand cars like Chevrolets and Fords, even though those are built almost entirely from Chinese made parts and assembled in factories in China. Through Geopolitical Actions China could try to raise the temperature in the dispute by installing more military equipment on the artificial islands that it has recently built across the South China Sea. China could also step up pressure on Taiwan. Not likely at this stage. Eswar Prasad, an economist at Cornell University who studies Chinese eco- nomic relations writes: One of the very important tools that the Chinese have is the ability to make life difficult for a large number of American businesses. They have all of these unconventional weapons that are not covered by traditional trad- ing rules that could be potent weapons in actually fighting a trade war. American automakers who make cars in China might find their local joint venture partners squeezing them out. Regional governments might send safety inspectors to plants
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