China Declares Trade War Victory: Gloats At US "Suffering" After "Crushing Counterattack"

Barely a day after China dropped the hammer on US stock markets by unveiling retaliatory tariffs on $50 billion in US imports that - unlike US measures that mostly targeted obscure industrial products - actually struck at key industries like soybean farmers, automobiles and airplanes, the Communist Party crowed about what it already sees as its "victory" in the nascent trade war in an editorial published by the Global Times, China's state-owned, English-language tabloid and extremely hawkish party mouthpiece.

In the editorial, China swatted away US claims - repeated most recently by Larry Kudlow during this morning's interview with Fox Business's Maria Bartiromo - that China has somehow victimized the US via its trade agreements while gloating about the leadership's decision to strike at a "massive weak spot" for the US economy.

While the tit-for-tat tariffs could hurt both economies, the damage to China's economy caused by the US's Section 301 tariffs will "pale in comparison to the damage done to the US economy via China's retaliations."

And just to illustrate that point, literally, a Chinese cartoonist showed that another way Beijing will hurt the US is by a "stockmarket squeeze."

Furthermore, in standing up to America's "bullying tactics", China warns that the pleasure the US had derived from its sanctions in the past "will now cause them suffering as their financial and political gains diminish to zero."

This is Beijing's clear show of retaliation toward the proposed tariff list on Chinese products from the US. Beijing showed an impressive response time for its retaliation efforts, taking less than 12 hours to announce its trade countermeasures. Chinese officials agree that its country's countermeasures match those imposed by the US and that they showcase China's determination to win this trade war.

It is worth noting that China strikes the US side by targeting its most valuable imports, such as soybeans, automobiles and chemical products. These aspects were targeted because they represent key pillars in the US imports and can create a massive weak spot for the US economy if their profitability is at risk.

Although China will sustain financial losses thanks to the US' Section 301 investigation tariffs, they will pale in comparison to the damage done to the US economy via China's retaliations.

China's counter tariffs are a spectacular way of standing up to America's bullying tactics, not only for itself, but for other countries threatened by the US's new trade policies.

And with China digging in for a long, protracted trade conflict, one from which it will never surrender, if it is indeed Kudlow's - and the Administration's - hope that China will concede to US trade demands, then there will be much disappointment all around.

Underscoring China's preparation for a "scorched earth", and tit-for-tat escalating war, the Chinese government has told its citizens it is prepared to go toe-to-toe in its fight with Washington. In fact, more and more Chinese citizens think that an "epic trade war" is inevitable, which would knock some common sense into the US government so that it will change its way of dealing with China.

Hawkish politicians in Washington have obviously overestimated the capability and endurance of the US economy in a trade war, since they believe they can do whatever they like. China has shown a great deal of restraint for now, but if the US persists in this trade war, China is ready to fight to the end.

Washington will eventually see what they have lost, thanks to their actions, and it will only serve to embarrass the US. This trade war will serve as a good example to the US that it cannot use intimidating trade tariffs as a form of diplomacy.

Before China announced its recent retaliatory tariffs on US products, Washington enjoyed crushing and threatening other countries on trade sanctions. Now, as China deploys its counterattack, the pleasure that the US achieved from those tariffs will now cause them suffering as their financial and political gains diminish to zero.

If a trade war does happen, China has contingency plans to help its economy avoid a slump.

And, in a dramatic break with precedent, China warned it could even take steps to weaken the US dollar, something that, if history is any guide, should be a concern to the Treasury market as it would suggest that China may be thinking of liquidating its Treasurys .

Many believe that the Trump administration's $50 billion tariff on Chinese products is meant to pressure China to submit to the US demands. If that is the case, the US will undoubtedly lose. This is because the Chinese government has rallied its citizens and is prepared to go toe-to-toe in its fight with Washington. In fact, more and more Chinese citizens think that an "epic trade war' is inevitable, and could knock some common sense into the US government, so that it will change its way of dealing with China.

If the trade war happens, China will show that it has just as many reserve plans as the US, if not more. Chinese experts suggest that China could even take actions to weaken the strength of its currency. Since China is the world's largest trading economy and the largest buyer of commodities like oil products, China could use its influence to push its own currency, RMB, in global markets to reduce the dominance of the US dollar. That would be a heavy blow to Washington.

If this trade war comes to pass, it will be an evenly matched total war between China and the US economies, and not some small scuffle. It would be delusional for the US to think it will be victorious at the end of this trade war. China comes up with the conclusion in confidence, and will not shy away from letting Washington know in this situation.

And while taking overt steps to weaken a currency would violate a G-20 communique agreeing to avoid currency wars through competitive devaluations, we doubt that would stop Beijing should Trump push it too far.

Meanwhile, a greater - and more likely - risk than a Treasury dump by Beijing is another devaluation: after all the Yuan is already back to where it was in the days just before the Yuan's 2016 deval. Fears about an impending yuan devaluation akin to the drop that unleashed turbulence across global markets back in August 2015 have historically had a negative impact. Traders will remember 2016, when markets got off to one of their worst early performances in decades as continued daily, if less acute, Yuan devaluations hurt stocks.

While this warning appears to have been largely overlooked by markets, it's definitely something to keep in mind.

Comments

FireBrander Stan522 Thu, 04/05/2018 - 10:59 Permalink

"It would be delusional for the US to think it will be victorious at the end of this trade war."

Well, it all depends on how you define "victorious".

I've lived most of my life, comfortably, without buying any "Made in China" products (60's/70's/80's era)..nearly everything was "Made in the USA" and much of it I still own and still works perfectly.

So if being "Victorious" is defined as the USA going back to a self sustaining, stable, national economy..then we can easily "win" this trade war.

In reply to by Stan522

Deep Snorkeler takeaction Thu, 04/05/2018 - 11:10 Permalink

America the Most Powerful Empire in the World

1. strongest military ever: insanely costly, corrupt, ineffective, unusable

2. the largest economy: fraud-founded, unproductive, a criminal network

3. dominant culture: CGI monster movies and blasting guitars

4. education: annually producing hordes of semi-literate beings, drifting half-minds

5. politics: a leisure class of degenerate non-doers

Americans hope for a better future but are unworthy of it.

In reply to by takeaction

macholatte IridiumRebel Thu, 04/05/2018 - 12:24 Permalink

 

China Declares Trade War Victory

China has had technology and expertise delivered to it on a silver platter by globalist corporations and fawning politicians since “Nixon Opened China”. They have been spoon fed success at the expense of the American Sheeple.

So yes. The headline is correct. America has been bludgeoned nearly to death in its suicidal efforts to promote globalism, multiculturalism and white genocide.

But the war ain't over.

 

 

In reply to by IridiumRebel

Kayman bigkahuna Thu, 04/05/2018 - 15:41 Permalink

Hopefully China is on Walmart's 180 day accounts payable list. 

And if we get really, really lucky China will sell it's U.S. treasuries. The Fed and the other Central Banks will mop up $1 Trillion like the bottom of a slurpee.

The Question is, what does China do with all it's unemployed, hungry workers.

Soy is up, pork is up, so much for people claiming farmers are going to pay some price.  China could work with the U.S. but they have been on the Clinton/DNC dirty money gravy train for too long.

In reply to by bigkahuna

Grimaldus Occident Mortal Thu, 04/05/2018 - 13:25 Permalink

Chinese communist leadership are the worst kind of coward---so afraid of political opposition they murder any Chinese citizen that threatens them. Absolutely disgusting, criminal people, murdering their own citizens to stay in "power". 

I can't imagine the kind of twisted sick fuck it takes to be like that.

The Chinese communist party is doomed, the writing is on the wall. It won't be because of foreign intervention either, it will come from within China. Pissed off angry Chinese people will throw off the chains of tyrannical and corrupt communist criminals. Hopefully more sooner than later.

Maybe the Chinese communist leaders will allow free and fair elections someday, joining hands with all Chinese to make a better country. But the sad reality is rivers of blood would flow, they will kill millions of their own to hold onto tyranny.

 

 

 

 

 

 

Grimaldus

In reply to by Occident Mortal

Fuelling Chaos Grimaldus Thu, 04/05/2018 - 16:17 Permalink

Tyrannical and communism in the same sentence makes no sense.. Tyrannical capitalism is the he'll you are living through right now. But you are right in inferring that a two party dictatorship is sooooo much better than a one party dictatorship.. you carry on like you actually select your leaders. Communism and totalitarianism are polar opposite doctrines. Read a book

In reply to by Grimaldus

CatInTheHat Occident Mortal Thu, 04/05/2018 - 16:16 Permalink

The American exceptionalism bullshit reigns supreme here.

People greatly underestimate China, unlike Putin and his reference to the US as 'our partners' the Chinese are not so polite .They are quickly becoming the leading economy in the world and their very ambitious belt and road initiative, is kicking American ass, some of that success is due to Washington Zionist GREED in hollowing out our manufacturing base and sending it to CHINA, is that their fault? They make stuff. We don't make shit, but war and more war and empire is now gasping it's last bouts of AIR, with 21 trillion in debt for which China holds most of and the Ponzi here about up, the rest of the world is TIRING of our shit, our threatening and bullying through sanctions and war,the elite are now fucking with the wrong countries. TRUST me, China will be just fine, but WE WONT BE. There is ZERO exceptional about us and our corrupt parasitic, fascists in power who have now transferred about all the wealth possible in the US, from us to them,not only with offshoring of jobs but bank bailouts, the recent tax heist, and the GIVEAWAY of 1.5 trillion to the defense contractors who simply launder that money into offshore accounts while we pretend that the department of defense is really making or doing anything to make us safer while continuing to bully and turn into shitholes, countries and millions of lives we DESTROY, who are literally defenseless against American Zionist psychopaths. Now, they dare to mess with both Russia and China. Anyone here read the NPR???

I hope they kick our arrogant, narcissistic murdering sanctioning asses to the curb. American 'exceptionalism' is long overdue for a REALITY check ...

 

 

In reply to by Occident Mortal

Stuck on Zero FireBrander Thu, 04/05/2018 - 11:31 Permalink

The bellicose language that China is using will only resolve the will of Americans to avoid Chinese products and to produce their own. It will also encourage every other nation on the globe to retaliate against China also. China should have taken the liberal approach and shown a starving orphan in a Chinese province to CNN to show how Americans are harming the poor.

In reply to by FireBrander