China’s New Trade Strategy: Threatening U.S. Companies

Arthur Dong ^ | August 13, 2018 | Arthur Dong

[Zhang Fei]

Starting August 23, an additional $16 billion dollars of exports from China to the U.S. will be subject to a 25% tariff, as the trade war between the two nations continues unabated. In preparation for these tariffs, China signaled that it would impose an equivalent amount of tariffs on U.S. imports. With both sides far apart, China has searched for alternative strategies to force a resolution of the deteriorating trade situation.

Earlier this month, an article published in the People’s Daily, an official newspaper of China’s ruling Community Party, signaled China’s intention to weaponize American corporations operating in the country. Using strongly phrased language, the piece identifies Apple as a poster child of American success built on the backs of Chinese workers and Chinese consumer demand. The article urges Beijing to address this imbalance by demanding that Apple to share a greater portion of its profits with China.

Up to this point, China has been careful to avoid nationalist appeals in the ongoing trade debate. The People’s Daily article signals a significant change in sentiment. By threatening companies like Apple, Beijing can pressure them to vocally oppose the Trump administration’s aggressive trade actions against China and to push Washington to resolve the worsening trade conflict.

In the past, China has pulled the nationalist card in disputes with other nations such as South Korea and Japan. In China’s tightly controlled media environment, the slightest expression of unfairness in a news outlet can stir the passions of the crowd, resulting in boycotts, protests, and even violence against foreign entities. The article targeting Apple suggests that Chinese policymakers may sweep other American companies into the debate as tensions rise.

United Technologies, Caterpillar, General Electric, Johnson & Johnson, Microsoft, IBM, Disney, Cargill, General Motors, Ford, and Procter & Gamble all have significant production capacity

[dsc]

“China’s ruling Community Party”

Pardon?

[dila813]

Bad News, these companies are making a beeline for the exits, meet capitalism’s big stick.

They aren’t going to produce product in China for the US Market.

They are going to Taiwan, Thailand, Vietnam, and Korea.

They are even moving production in with their suppliers to their factories in China.

You will be shocked how fast the capitalist pigs move.

[Mr. Jeeves]

Well, that could explain why Obama called himself a “Community Organizer.” :)