The United States and China prepare for a trade battle

President Trump's $ 200 billion threat will also not be ready to come into effect before the end of the fall because the United States must meet a number of procedural requirements. And as the United States approaches the mid-term legislative elections, the battle of China may seem "a political winner," says Dollar. "It's a historic day," said the former chief strategist of the White House.

Steve Bannon,

who always consults with the officials of the administration. "China has been at trade war with us for 20 years and now someone is getting up and fighting back."

The United States is already in its biggest trade battle since the Great Depression, with endless additional and threatened tariffs in sight of disputes with China and other nations.

Since the beginning of 2018, the United States and its trading partners have put tariffs – or will do so soon – out of a total of $ 165 billion in imports, calculates

Chad Bown,

a trade expert at the Peterson Institute of International Trade. In addition to new Chinese tariffs, this includes US tariffs on foreign washing machines, solar panels, steel and aluminum, and retaliatory tariffs from countries targeted by the United States [19659004 "It's the largest US application. Trade since Smoot-Hawley," says Dartmouth Trade Historian

Douglas Irwin,

Referring to the 1930 homework that many economists say has aggravated the Great Depression.

Other fare battles were small changes compared to those of Mr. Trump. A 1971 import surcharge by President Nixon lasted only four months. The Reagan-era tariff fights against Japan and the George HW Bush's campaigns against European agriculture involved tariffs on several hundred million dollars worth of goods, said Irwin, and tend to to be settled fairly quickly, he said.

For example, Reagan and Bush agreed to limit sales of cars and textiles in the United States, and bought more US semiconductors. Tokyo has never retaliated against US tariffs, as Beijing did

There have been some small olive branches offered by the United States and China, but none sign of imminent breakthrough.

President Trump has gone to the forefront of the giant telecommunications scene, ZTE Corp., which allegedly violated US sanctions against Iran and North Korea. He helped overturn a Commerce Department decision to prevent US companies from supplying ZTE with components – a real death sentence – and beat him to prevent Congress from tying up the deal. He also renounced threats to impose severe restrictions on Chinese investment in the United States and Chinese technology exports to China.

On the Chinese side, the government has refrained from stirring up nationalist sentiment and inciting Chinese consumers to boycott American products. as he did with other nations, like South Korea. Communist Party censors told the state media not to play commercial war stories or the impact of the fight in local stock markets, say Chinese journalists.

"We are obliged to respond to US tariffs, and we" "Chinese experts say that the two parties will probably start trading again when the impact of tariffs begin to be felt and that markets will start to react US officials say Trump is closely monitoring the impact of his trading actions on US markets, which was one of the reasons he gave up investment restrictions.

The Trump administration has been cautious – and a second round of tariffs an additional $ 16 billion, which will likely come into effect in August, to largely exempt US consumer goods Initial US tariffs on Chinese products target auto parts, electronic components, jet engine parts, compressors and other machines s.

This should reduce the reaction of consumers, but tariffs for machinery, engines and other components At the same time, Chinese retaliatory tariffs directly target US farmers – a great source of support for Trump – just like EU and Canadian tariffs on trade in metals. Until now, Farm Belt's support for Trump remains strong, but this could change over time as farm prices and sales plummet. "The trade war ends when things collapse on Trump and the US must reposition" their strategy towards China, said Rufus Yerxa, trade negotiator in the Republican and Democratic administrations. , who now heads the National Council of Foreign Trade Free Trade. "We do not know when it will be."

Even if this were to happen, from Beijing's point of view, it is difficult to say what kind of trade package would appeal to a sharply divided trade administration. A group, grouped around the Secretary of the Treasury

Steven Mnuchin,

is seeking a sharp increase in Chinese purchases, which would require Beijing to relax import restrictions on agricultural products, American films and other items.

A second group, however, led by the United States Trade Representative

Robert Lighthizer,

is skeptical about the Chinese purchase promises. They want Beijing to abandon the industrial policy schemes that it used to build its economy. Skeptical that China would bring such changes, this group believes that tariffs should be maintained for years to protect the US industry.

Chinese officials say that they believe that Mr. Trump did not fully appreciate the plan offered by Chinese envoy Liu He in February, which included tariff cuts, trade agreements, liberalization of the financial sector and a bilateral free trade agreement plan. The American side was so disappointed that Mr. Liu could not mark a meeting with Mr. Trump.

Cornell University China scholar

Eswar Prasad,

who regularly speaks to Chinese officials, says that Beijing is seeking to reorganize these offers in a manner that is more pleasing to Trump, who regularly calls on China to cut its trade surplus with the United States by $ 200 billion. . "There is a sense in Beijing that the way this is going is to prepare a package of measures to increase imports," he said.

Write to Bob Davis at [email protected] and Lingling Wei at [email protected]