2018-04-04

China Fired Its Biggest Shot in Trade War

ZH: Why China's Soybean Tariff Changed Everything
And here the problem emerges, and why China's action has taken so many by surprise: “There simply aren’t enough soybeans in the world outside of the U.S. to meet China’s needs,” said Mark Williams, chief Asia economist at Capital Economics. “As for reducing dependence on imports, there are a few options, but none is a magic bullet that could hurt U.S. farmers without generating costs at home.”

There certainly isn't enough production at home: China grows only about 14 million tonnes of soybeans, mainly to make food for human consumption, making it especially reliant on foreign imports, and thus, the US.

In short, by crippling US soybean imports, China may have shot itself in the leg.
Now we will find out if this is really a trade war or if China has miscalculated and walked itself into a trap. Slowing China's growth through economic policy is one national security strategy proposed by Edward Luttwak in his book the Rise of China vs the Logic of Strategy.

No comments:

Post a Comment