China may escalate its pressure on American companies in response to US President Donald Trump’s customs duties, as it is reluctant to use some power in negotiations between the two largest economies in the world under an escalating trade war.
Beijing has already responded, an increase of customs duties on American goods 34%, and has taken a set of other measures, including:
- Block export of rare minerals
- Investigation of fighting monopoly with the Chinese branch of the American Dubont company, the giant of chemicals.
On Monday, Trump said it will impose an additional 50% additional customs duties on China if Beijing does not withdraw its counter -fees on the United States.
A comprehensive increase
Unlike the previous two rounds of retaliatory measures, which targeted specific groups of American imports, Beijing announced this time a comprehensive increase in customs duties entering into force as of April 10, that is, a day after American drawings entered into force.
“The Chinese reaction to the first two increases in customs duties was moderate and moderate, but we found that patience was not useful,” said the Dean of the China Institute for World Trade Studies at the University of Business and International Economics in Beijing.
But while “the situation is bad, it may be worse,” said Kori Combs, assistant director of Trevium China’s consulting company, based on Beijing, adding, “Beijing left for itself, strategically, a space to continue to escalate the response whenever the actions of the United States or others threaten its economic interests.”
He added that the latest export controls included a list of rare minerals, adding that Beijing still has a space to apply tougher export controls and make new investigations with companies that have a presence in China.
https://www.youtube.com/watch?v=_7GETVMG_DS
Chinese officials told official media on Monday that they are ready to reduce borrowing costs and reduce the requirements of the cash reserves for lenders, and they also said that there is a “wide field” to increase the financial deficit of the state and use exceptional measures to enhance consumption.
Trump’s commercial attack comes at a difficult time for Beijing, which is actively seeking to attract foreign investment to support its slow economy and confrontation with the deflationary pressures.
China was working to reduce tensions with the new administration with the start of the second term, as it took an unfamiliar step by sending Vice President Han Cheng to attend the Trump inauguration ceremony in January.
But Chinese restraint ended after she found itself last week, one of the largest goals of the “mutual” customs definitions that Trump revealed, and the new definitions will raise the average American graphics on Chinese goods to 60%, according to the analysis of Goldman Sachs.
China condemned the customs definitions, which led to a wave of sale in global stocks, and also intervened at the last minute to stop the sale of American Tek Tok operations by the Chinese social communication group to a union of American investors, in an effort to re -negotiate the definitions before agreeing to any sale, according to the Financial Times from a source described as the beginning.
Rare minerals are a future goal
The controls announced on Friday target the so -called rare medium and heavy terrestrial elements such as samarium, cadolinium, and tablet, which can be extremely important for countless technologies including optical fibers, storing and transferring data.
Combs said that America’s dependence on the outside in these elements is “relatively limited”, and the Chinese mines represent about 60% of the rare ground elements in the world.
However, the rare light ground elements, which are also necessary for a wide range of high -tech products including medical equipment, electric compounds and smartphones, waved on the horizon as a possible future goal for Beijing.
Experts say that the Ministry of Commerce, which grants approvals to Chinese companies to export vital components and machines, may tighten examination procedures for American clients.
The British newspaper quoted a mediator in Beijing selling Chinese intermediate goods and manufacturing equipment to the United States as saying that the regulators have slowed in recent months in issuing approvals on the elements listed in their control -subject list of commodities that require an export license, including basic minerals.
“They do not categorically reject your request, but rather they do not respond to your request. We have seen in the past, during periods of geopolitical tension, that these approvals are disrupted,” Al -Waseet said.
https://www.youtube.com/watch?v=z5gouyjnqa4
Investments ban
Another way that Beijing can explore is to prevent Chinese companies from carrying out any foreign investment in the United States, and preventing them from participating in Trump’s efforts to revive the American industry. Chinese companies, such as the BYD auto company and the Battle of Goshen, in facilities in the United States, have invested in the United States, but future manufacturing investments in the United States require Beijing’s approval.
China had already made it difficult for some engineers and equipment to leave the country, in an effort to protect its hegemony in the supply chain in the field of electronics and batteries. Foxconn, the main partner of Apple in manufacturing, faced difficulty sending Chinese machines and technical managers to India, where Apple was working to diversify its supply chain.
Experts have warned that Beijing is likely to take retaliatory measures against American companies that have operations in the country, after the anti -monopoly investigations have already begun with the two Group and Envide technology groups in recent months.
