What Are Beijing's Best Weapons in the US-China Trade War?

What Are Beijing's Best Weapons in the US-China Trade War?

Last week, the Trump administration put a "knife to China's throat" in the two countries' ongoing trade dispute, and yesterday things only got worse.


China announced it would increase tariffs on $60 billion worth of goods imported from the US. Not to be outdone, the Trump administration readied its own fresh tariffs on the remaining $300 billion in Chinese exports not currently subject to increased duties. That's a move that could cut as much as 1.2 percentage points off of China's GDP.

Not surprisingly, all of that pushed markets into another tailspin, over concerns that the trade tussle between the world's two largest economies won't ease up any time soon.

With Trump prepared to really get serious, what else can China do to fight back?

China has already nearly reached the limit of US goods on which it can impose additional tariffs. But there are plenty of other ways that China could grab Trump by the… economy.

Here's how things could really get nasty:

Trade war 2.0: So far, Beijing has declined to place tariffs on certain US goods—like crude oil and Boeing 747s—that are tough for China to replace. But in recent months it has reduced its purchases of US crude and may soon cut back further on other key commodities, like soybeans. China could also instruct its customs officials to give importers of goods produced in the US – such as luxury cars or produce – an extra hard time at the border in ways that are legal in practice but clearly politicized in spirit.

Singling out US companies in China: It could also make life much more difficult for US companies that produce and sell in China. For example, around 40 percent of Apple's sales today come from Greater China, which includes mainland China, Taiwan, and Hong Kong. GM has a joint venture in China, where it sells more vehicles than anywhere else in the world. China could implement new regulations on these companies or move to subsidize their competitors, inflicting pain on some of the titans of America, Inc.

The nuclear option: A more severe step would see Beijing threaten or even move to dump some of its $1.2 trillion holdings of US government debt, a possibility mentioned Monday by the editor of The Global Times, the Communist Party's mouthpiece. That would send US interest rates—the cost the government pays to borrow and finance its spending—soaring and could inflict a major shock on America's financial system more broadly. But by the same token, it could just as easily imperil China's economy, the main reason Beijing hasn't made good on this threat.

China, in sum, has lots of ways it could hurt the US – but each would carry its own risks and blowback. These, for China, are the tradeoffs of a trade war.

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Back in August, when the Taliban took over, we asked whether anyone in the international community would recognize them. Now it looks like things are heading that way.

This week, the Kremlin hosted a summit with the Taliban that was attended by China, India and Pakistan, as well as all five Central Asian Republics.

The domestically-focused US, however, wasn't there. The US continues to maintain that the Taliban can't be trusted. But does it matter? In 2021 does a Taliban-led government even need American recognition to function and thrive?

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Taking place on October 21 and 22, the Sustainability Leaders Summit will go beyond preexisting narratives and debate priorities for governments and industries ahead of COP26. Placing the spotlight on Asia's role in the global sustainability agenda, the event will address whether Asian countries and companies can achieve shared sustainability goals, and what is needed to help get them there. The summit will be co-hosted by Tak Niinami, CEO of Suntory Holdings, and Ian Bremmer, founder and president of Eurasia Group and GZERO Media. We will address three key questions: How can Asian countries, with the help of the private sector, achieve shared Sustainability Goals? Why does this matter? And what are the policy changes needed to bring it about?

Attendance is free and open to the public. Register to attend.

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For Kevin Rudd, former Australian PM and now CEO of the Asia Society, the science on climate change is pretty much done, so the only unresolved issues are tech and — more importantly — lack of political leadership. He can't think of a single national political leader who can fill the role, and says the only way to get political action on climate is to mobilize public opinion.

Rudd joined for the first of a two-part Sustainability Leaders Summit livestream conversation sponsored by Suntory. Watch here and register here to watch part two Friday 10/22 at 8 am ET.

The minutiae of supply chains makes for boring dinner table talk, but it's increasingly becoming a hot topic of conversation now that packages are taking much longer to arrive in the consumer-oriented US, while prices of goods soar.

With the issue unlikely to be resolved anytime soon, right-wing media have dubbed President Biden the Grinch Who Stole Christmas, conjuring images of sad Christmas trees surrounded by distraught children whose holiday gifts are stuck somewhere in the Pacific Ocean.

It hasn't been a good run for Uncle Joe in recent months. What issues are tripping him up?

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Ian Bremmer shares his insights on global politics this week with a look at the NBA's latest rift with China, Brazil's Senate investigation, and COVID booster shots.

China wipes Boston Celtics from NBA broadcast after the "Free Tibet" speech from Enes Kanter. Is NBA boxing itself into a corner?

Nice mixed sports metaphor there. NBA has some challenges because they are of course the most progressive on political and social issues in the United States among sports leagues, but not when it comes to China, their most important international market. And you've seen that with LeBron James telling everyone about we need to learn better from the Communist Party on issues like Hong Kong and how Daryl Morey got hammered for taking his stance in favor of Hong Kong democracy. Well, Enes Kanter's doing the same thing and he's a second-string center. Didn't even play yesterday and still the Chinese said that they were not going to air any Boston Celtics games. Why? Because he criticized the Chinese government and had some "Free Tibet" sneakers. This is a real problem for a lot of corporations out there, but particularly publicly, the NBA. Watch for a bunch of American politicians to make it harder for the NBA going forward, saying how dare you kowtow to the Chinese when you're all about "Black Lives Matter" inside the United States. No fun.

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

A Trump media platform? Is this for real?

This week, President Trump announced his potential return to social media through the creation of his own digital media platform that's going to merge with an existing publicly-traded company in a deal known as a SPAC. These deals are increasingly popular for getting access to capital, and it seems like that's where President Trump is headed.

The publicly-traded company's stock was up on the news, but it's really hard to see this coming together. The Trump media company claims it wants to go up against not only Facebook and Twitter, but companies like Amazon and cloud computing and even Disney providing a safe space for conservatives to share their points of view. The fact of the matter is, conservatives do quite well on existing social media platforms when they aren't being kicked off for violating the terms of service, and other conservative social media platforms that have attempted to launch this year haven't really gone off the ground.

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Protests in Sudan: Protests are again shaking the Sudanese capital, as supporters of rival wings of the transitional government take to the streets. Back in 2019, after popular demonstrations led to the ouster of longtime autocrat Omar al-Bashir, a deal was struck between civilian activists and the army, in which a joint civilian-military government would run the country until fresh elections could be held in 2023. But now supporters of the military wing are calling on it to dissolve the government entirely, while supporters of the civilian wing are counter-protesting. Making matters worse, a pro-military tribal leader in Eastern Sudan has set up a blockade which is interrupting the flow of goods and food to the capital. The US, which backs the civilian wing, has sent an envoy to Khartoum as tensions rise, while Egypt, the UAE, Saudi Arabia, and Turkey are all vying for a piece as well.

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