Trying to force the US to back down in the trade war

But Trump says “I'll see you,

and raise you 5%”

And now he's calling on US companies to leave China

Welcome back to China Uncensored.

I'm Chris Chappell.

The Chinese Communist Party is not happy about

the US's latest tariffs on Chinese goods.

So they've launched new tariffs of their own—

of up to 10% on $75 billion worth of US goods.

That was announced last Friday.

And it came after the US unveiled tariffs

on an additional $300 billion of Chinese goods

scheduled to go into effect in two stages—

one in September and the other in December.

And the Chinese regime's new tariffs play on

people's fears of a recession ahead of the 2020 election.

They want to make President Trump blink.

But they forgot they were dealing with Tariff Man.

Trump had tweeted on Friday,

saying he would not only NOT withdraw the planned tariffs

in response to China,

but that he would levy EVEN MORE tariffs on Chinese goods.

As he told reporters that night,

"We're having a little spat with China and we'll win it.

We put a lot of tariffs on China today as you know,

they put some on us.

We put a lot on them."

And then Trump was off to attend the G7 summit in France.

On Monday, he gave a colorful explanation

for the logic of why China's one-upmanship

in piling on tariffs is doomed to fail.

“When I raise and he raises, when I raise and he raises,

we can never catch up.

We have to balance our trading relationship

at least to an extent.

And they were unwilling to do that.

And we're never going to have a deal if that happens."

One of the ways the US-China trade relationship

is unbalanced is the $420 billion trade deficit with China.

In 2018, the US exported only $120 billion to China,

while imports from China were $540 billion.

But if this was just a trade imbalance problem,

then it would be easy to solve.

China could buy more pork and soybeans from the US,

and everyone would go home happy.

Except for this little guy.

Mmm, bacon.

Which is to say, it's not just a trade imbalance problem.

According to the U.S. Trade Representative,

China steals up to $600 billion per year

in American intellectual property.

This is done in part through state-sponsored

corporate espionage and cyberattacks.

It's also done through forced technology transfers,

where the Chinese regime forces foreign companies

doing business in China to hand over

intellectual property and licenses.

Chinese state-run media has responded to these allegations

by accusing the US of using intellectual property

as “a weapon to contain other countries,

and a veil for bullying the world.”

So…China is stealing from the US.

The US is complaining about China stealing from the US.

And now China is saying quit bullying us for stealing from you.

Sounds reasonable.

Trump said at Monday's G7 summit

that if China doesn't start treating the US fairly,

he's willing to stop doing business with China entirely.

"You know, and I told this to President Xi,

who I really respect.

I really do...

... But I told him very strongly,

I said 'look, you're starting up here

and you're making 500 billion a year

and stealing our intellectual property.

We're down on the floor.

Lower than the floor.

Can't make a 50/50 deal.

This has to be a deal that's better for us.

And if it's not better,

let's not do business together.

I don't want to do business.

Forget about tariffs for a second,

we're taking in tremendous amounts of money.

Forget that.

I don't wanna do business.'”

The Chinese regime, meanwhile,

said it would fight back against American tariffs.

The Communist Party's mouthpiece The People's Daily

said in an editorial on Sunday that

"China is confident that it will follow its own path

and do its own things well,

and will never waver in its stand on

countering any provocations by the U.S. side."

But despite Trump's assurances

that he and Xi Jinping are still pals,

one person who sees their bromance crumbling

is former White House Chief Strategist Steve Bannon.

"I'm glad we're having this interview today on Friday

because I think the friendship quote unquote

with President Xi and President Trump

probably ended today when China came back

and tried to play smashmouth

and raise tariffs on these American goods."

Does he mean the Chinese regime

is dropping hints that if Trump doesn't follow,

there won't be a tomorrow?

“And if you follow, there may be a tomorrow

But if the offer's shunned,

you might as well be walkin' on the sun”

Ah, remember when bowling shirts were cool?

Me neither.

But anyway, the Trump-Xi Jinping bromance not withstanding,

Trump said he's ordering US companies

to “immediately start looking for an alternative to China,”

including bringing their companies home

and making their products in the USA.

...leading American media to ask,

“wait, can he do that?”

Trump answered that question,

telling all the “fake news reporters”

who doubted him that yes, he can,

using the Emergency Economic Powers Act of 1977.

“Case closed!”

Wait, so he CAN do that?

Well, yes.

But it's complicated.

The 1977 law gives the president the power

to block financial transactions between a US company

and a specific foreign country, i.e.

China.

So if Trump enacted that power,

it would effectively prevent US companies

from conducting business with China.

But Trump CANNOT specifically force those companies

to move their manufacturing to the US.

Because they can just move to other countries

with low labor costs.

In fact, they've been gradually doing that already

over the past year,

relocating factories from China to Southeast Asia.

See, it's important for big companies

to pay their workers as little as possible,

even if they can't do it in China.

At least until the robots take everyone's jobs.

So what do you think about

Trump's response to China's tariffs?

Leave your comments below.

And now it's time for me to answer a question

from one of my 50-Cent Army supporters on Patreon.

Sell asks:

“There's a lot of talk about the potential

for the CCP/Chinese economy

to collapse under all this pressure,

but with how much the global economy is intertwined with China,

could the rest of the world survive such a collapse?

Wouldn't that qualify as an economic version of

"Mutually Assured Destruction"?

Good question, Sell.

If China's giant economy collapses,

the entire world will feel the ground shake.

It could crash stock markets globally,

and lead to another global financial crisis.

However, the less tied the US is to China,

the less the US would feel it.

That's part of the reason why the Trump administration

wants US companies to pull out of China.

It protects the US economy against a possible disaster there.

So really, smart companies ought to pull out as soon as possible.

Thanks for your question.

Be like Sell, and support China Uncensored on Patreon.

We rely mainly on viewer support to make this show.

Once again, I'm Chris Chappell.

See you next time.