讀後心得

Trump and Xi Jinping show no signs of backing down in the trade war, which has significantly impacted American companies hoping to enter the Chinese market. China has imposed a 34% import tariff on American goods, particularly affecting American agricultural products, as they have recently faced additional taxes of 10% to 15%. This has caused a substantial increase in prices for American agricultural products, making it difficult to compete in the Chinese market. China appears unfazed by the search for alternative import sources, believing that this policy effectively undermines Trump's support base. The global economy is concerned about this, as highly internationalized supply chains may lead to economic turbulence affecting all trade. During the holiday period, China announced countermeasures, demonstrating its determination and showing little optimism for reaching an agreement. Meanwhile, Xi Jinping is engaging in tree planting activities, showing disregard for Trump’s comments, and may choose to strengthen trade with other countries, further harming American companies’ interests.

Trump and Xi Jinping both seem reluctant to back down in the tariff war. American companies face significant challenges in entering the vast Chinese market. The 34% import tariff on all American goods could drive them out of the market. This is particularly harsh for American agricultural products, which have recently been hit with an additional 10% to 15% tariff by China as a response to Trump’s previous tariffs on China. Adding a further 34% tariff on top of that would push these products out due to excessively high prices. Beijing is not concerned about finding alternative import sources for chicken, pork, and sorghum. China understands that this is an attack on President Trump's voter base, but from a global perspective, this undoubtedly raises concerns among analysts. With the highly internationalized global supply chain, the parts of any product may come from all over the world, meaning that when economic turmoil begins to fester in one country, it could have catastrophic effects on all trade.

Trump's tariff policies caused significant fluctuations in the U.S. stock market, while China announced additional tariffs of 10-15% on American agricultural products. As Trump looks forward to Xi Jinping's visit to the U.S., the key cards he can bring to the China-U.S. "agreement" negotiation table have also come under scrutiny. In the midst of the uncertainty Trump is sowing, Xi Jinping sees an opportunity.

American agricultural products aiming to export to China will suffer the biggest blow. The primary concern is that the world’s two largest economies are confronting each other with no signs of backing down. The Chinese Ministry of Finance announced its promised "decisive countermeasures" on WeChat at six o'clock on Friday afternoon, right before the public holiday. The timing of this announcement may suggest several points: first, China wants to somewhat mask this news domestically to avoid alarming the public too much; second, China made the announcement quickly after preparations were solidified; third, China relinquished the brief window before Trump’s new tariffs come into effect next week without attempting to reach an agreement. The authorities have decided to go all out. If this holds true, it is undoubtedly severe news for the global economy, as it implies that reaching any solution between the two superpowers will be more challenging than most anticipate.

Another notable aspect is the current actions of Chinese leader Xi Jinping. In other countries, governments might closely monitor the situation to avoid the worst outcomes, but China is not doing that. Xi Jinping, together with six other Politburo Standing Committee members, was planting trees externally, emphasizing the necessity to combat deforestation. This displays calmness in the face of Trump, sending a message: Washington, we ignore your words. In reality, reaching some sort of agreement between China and the U.S. is still possible, but the rhetoric at this stage does not seem to be developing in that direction. China may choose to strengthen trade with other countries, particularly former Western allies of the U.S., and increase new trade routes that exclude the U.S. This will inevitably further hurt American companies and the American consumers who are about to pay the price for Trump’s tariffs.