Drudge Retort: The Other Side of the News
Sunday, May 19, 2019

From the volume of bellicose rhetoric in China's state media, you might think Beijing is digging in for a bloody fight to the finish in its trade conflict with the United States. But after the US administration this month jacked up import tariffs on US$200 billion of Chinese goods to 25 per cent, and threatened equal tariffs on another US$340 billion, the Chinese government faces a huge problem. The policy responses it is considering are all either impossible, impractical, ineffective or expensive. This leaves Beijing with difficult and limited options.

Hit by a hike in US tariffs China could:

1) respond with equal tariffs (impossible given the trade imbalance);

2) dump US Treasury bonds (ineffective and impractical since China only holds 5% of all treasuries);

3) let the yuan weaken (expensive and devastating to their economy); or

4) give in to Trump and lose face (for Xi, unthinkable).

With no good options, China is not in an enviable position at all.

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Surprising that the SCMP allowed this OpEd to run given how bleak it paints China's options. With the PRC Politburo admitting yesterday that the Trade War will slice at least 1% off China growth if it continues (most analysts are predicting at least a 2.5% drop), it will be fascinating to see how China ultimately comes up with a solution that allows Xi to save face.

#1 | Posted by Rightocenter at 2019-05-19 08:26 PM | Reply | Newsworthy 1

"it will be fascinating to see how China ultimately comes up with a solution that allows Xi to save face.
#1 | POSTED BY RIGHTOCENTER"

Their only solution is to suck it up for 2 years and then try to interfere in the election to get a weak hand elected as president.

This article misses the big picture on why this is so disastrous for China. If US puts tariffs on the rest of China's exports, it would effectively end China as a nation.

#2 | Posted by iragoldberg at 2019-05-19 08:58 PM | Reply

--Their only solution is to suck it up for 2 years and then try to interfere in the election to get a weak hand elected as president

They're rooting for Moldy Joe, who doesn't think they are a competitor.

#3 | Posted by nullifidian at 2019-05-19 09:04 PM | Reply | Newsworthy 1

"#3 | POSTED BY NULLIFIDIAN"

I wonder how much concern we will get from the Dems when China actually does the things they falsely accused the Russians of doing.

#4 | Posted by iragoldberg at 2019-05-19 10:18 PM | Reply

I'm a neophyte when it comes to this, but I've a question. If all it takes to end China as a nation is to put the screws to them, why weren't tariffs placed on the Chinese before now?

#5 | Posted by lee_the_agent at 2019-05-19 10:56 PM | Reply

#5

Thanks Obama! (and Bush, Clinton, and to a small extent Bush Sr.)

#6 | Posted by Rightocenter at 2019-05-19 10:59 PM | Reply | Newsworthy 1

"I'm a neophyte when it comes to this, but I've a question. If all it takes to end China as a nation is to put the screws to them, why weren't tariffs placed on the Chinese before now?
#5 | POSTED BY LEE_THE_AGENT"

1.) They should have so it would not have gotten this bad
2.) We have a unique set of circumstances now that didn't exist before. I explain this if you are actually interested.

#7 | Posted by iragoldberg at 2019-05-19 11:44 PM | Reply | Funny: 1

The Bush clan has always been Sinophile, and Obama preferred not to rock that boat.

#8 | Posted by moder8 at 2019-05-20 11:11 AM | Reply

#8

Agreed, but it goes a little further than that in that Obama was pushing the TPP so hard that he didn't want to ----- the ASEAN signatories with a tariff fight while he and the Trade Representative were putting that together. The TPP was Obama's solution to the China Trade Imbalance, he was hoping that the TPP would spread manufacturing around and force China to come to the table to save their manufacturing base.

#9 | Posted by Rightocenter at 2019-05-20 11:49 AM | Reply

donydealmaker couldn't handle DPRK's chubby leader, but he is magically going make China heel

Hardy Har Dixie Cup Indeed

#10 | Posted by ChiefTutMoses at 2019-05-20 12:24 PM | Reply

#10 | Posted by ChiefTutMoses

Drink of the Dixie cup of faith, the Dixie cup of salvation.

If you're strong, help the weak.

There is so little time, my children - so little time.

#11 | Posted by HeliumRat at 2019-05-20 01:35 PM | Reply

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