The Chinese are experts when it comes to doing business around the world. They are masters at turning pennies into millions of dollars. The Chinese are the best when it comes to duplicating high-price merchandise at cheaper prices. Their massive economy is the result of that business tactic. But the Chinese aren’t the cheapest manufacturing country in the world anymore. Vietnam, Thailand, and other Asian countries still use cheap labor and sketchy materials to keep the retail bottom-feeders around the world happy.
China’s plan, according to President Xi, is to change their business model, so it is more consumer friendly. The old manufacturing economy is not as productive as it was twenty years ago, so China is importing more goods from Europe, the United States, and South America. But trading with the United States isn’t as easy as it was before Trump came to Washington. Trump, the deal maker, wants to beat the Chinese at their own game, and that may cost Americans more than they bargained for when they elected Mr. Trump. China recently filed a complaint with the World Trade Organization challenging President Trump’s tariff increase on imported aluminum and steel, according to ABC news. Trump’s tariff plan is his opening shot at bringing the Chinese down to earth when it comes to dealing with the United States. Mr. Trump claims China unfairly protects its industries, and its currency, and the president says that’s not fair.
President Xi believes Mr. Trump is violating international trade rules by imposing a 25 percent additional duty on steel, and a 10 percent additional duty on aluminum. But China’s trading partners accuse the Chinese of pricing steel and aluminum well below the market price because their supply of aluminum and steel exceeds the demand for those products. President Xi is fighting back by putting additional duties on pork, steel pipes, and apples. All those products come from states that voted for Trump in the 2016 election.
The steel and aluminum tariffs started Trump’s business campaign to get better deals for American businesses that export goods to China and other countries. But his plan may backfire if the Chinese decide to enforce additional tariffs on American products, But the real Chinese threat that could stop Trump’s deal making plan cold may be China’s decision to sell more U.S. bonds. China owns a large amount of U.S. bonds, and if China decides to dump them quickly, Trump will have a serious financial issue to fix along with the trade issue.