They say you can tell a lot about a person by who they associate with.
Well, if that’s true, then Donald Trump might well try and make good on his bombastic rhetoric regarding China and trade.
As detailed here in one of the most viewed posts in this site’s short history, the choice of Peter Navarro as trade czar (that’s basically his role) speaks volumes about the new President’s intentions. For those who might have missed it, the Harvard-trained Navarro is the director of “Death by China,” and he isn’t what you might call a universally respected academic. He’s had a rather peculiar career that’s seen him try everything from running for elected office to penning books on how to get rich with macro analysis to tilting at Chinese windmills. He seems to have found his niche with the latter thanks in no small part to Donald Trump, who apparently believes he has found a kindred spirit in the University of California, Irvine professor.
Trump’s recent Twitter tirades directed at companies who have manufacturing operations in Mexico have only served to reinforce the notion that the incoming administration will make good on threats to adopt a protectionist policy at the expense of America’s trading partners.
Well, don’t expect China to go down without a fight – especially considering the fact that should Trump go forward with punishing tariffs, the PBoC might be forced to float the RMB (much) sooner than they had planned.
In the latest sign that the Politburo is taking Trump at his word, the ubiquitous “people familiar with the matter” tell Bloomberg that China is essentially preparing for war.
China’s central government has compiled list of possible retaliatory measures against U.S. companies in event President-elect Donald Trump starts a trade war after taking office, according to people familiar with the matter.
- Potential actions against U.S. companies in China include antitrust, tax probes: people
- Other options include tighter scrutiny over imported goods from the U.S., limiting Chinese government procurement of U.S. products, launch of WTO-compliant anti-dumping investigations: people
- The people asked not to be named as the information is private
- Industries that could be affected include IT, pharmaceutical, consumer and agricultural: people
- Not all options may be used and China won’t make first move: people
- Well-known U.S. companies or those with significant operations in China would become targets: people
- Representatives at Ministry of Commerce, National Development and Reform Commission, State Administration of Taxation, General Administration of Customs either didn’t respond or couldn’t immediately comment
- Trump’s transition team didn’t respond to a request for comment
Watch Trump’s Twitter feed for a late night temper tantrum and remember, nothing says the US would necessarily come out on top in a trade war with the Chinese.