China Facts: US-China; tariff war - aim and possible outcome



US president Donald Trump's new tariffs against China will among others try to harm China's ambitions with regard to CM2025 i.e. in strategic sectors such as advanced IT products, robotics, aerospace and electric vehicles. "Analyst say that focusing on these sectors alone will make it difficult for the US to reach its goal of imposing tariffs on $60bn worth of Chinese exports - one-eighth of the country's total exports to the US last year". However, the White House is constrained in its ability to target more low-tech export such as consumer electronics and appliances, clothing, footwear, furniture and toys as many of them are produced for sale under US brands or feature significant involvement of US companies in the supply chain. Furthermore it is estimated that a tariff rate of 25 per cent on $60bn would only dent Chinese growth of gross domestic product by 0.1 percentage points this year, as the overall importance of exports to China's economy has fallen to 18 per cent of GDP from 35 per cent in 2006*)     


*) Financial Times 24th March 2018
















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Hans Henrik Pontoppidan
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