United States corporations are growing increasingly anxious that a tough approach might hinder their prospects in the world’s second largest economy and make them targets of Chinese retaliation, especially since President-elect Donald Trump’s trade and foreign policy team has adopted a hawkish position towards China.
Trump has promised to cut off reliance on China and warned to impose tariffs of at least 60%.
Just that would cause disruption. It would result in job losses, drive businesses to rush to locate alternative sources of supplies, and raise costs for American customers.
The Chinese government may react by launching a more comprehensive offensive on American companies. In Beijing on Thursday, Scott Kennedy, senior advisor at the Centre for Strategic and International Studies, told reporters that the Trump administration’s measures might be perceived as economic warfare.
“If that is how they are interpreted, China may respond with much more vigour, not just tariffs.” China may “push back as hard as they can,” Kennedy added, adding that those measures may include everything from diplomatic and security issues to economic adjustments.
Source (CNBC)
