Source: Global Times

The article "Diane Francis Column" website of Canada dated April 21st, originally titled "Sino-US Dispute", has a proverb from Africa that applies to the trade friction provoked by the US today: "When elephants fight, grass gets trampled." The tariff blackmail initiated by the United States against China is shaking the world, and this shaking will continue for some time. Beijing has responded with a series of countermeasures, and now the whole world is watching who will blink first.

After the market fell into chaos on April 9th, the U.S. government retreated somewhat, suspending so-called "reciprocal tariffs" for most countries for three months. However, when these tariffs are finally implemented, global trade will significantly shrink and restructure. Before then, markets will remain volatile, trade fairs will be canceled or postponed, intermediaries will rush to find alternative solutions, or strive to reach agreements with the U.S. government. China has demonstrated its firm stance and publicly pledged to "see it through to the end."

Then comes the question: which "elephant" will win? The U.S. believes it holds more cards than China, but it is wrong. China holds a large amount of U.S. Treasury bonds and is a powerful opponent with significant trade influence and a global network of allies. The farcical behavior of the U.S. government has made many realize that compared to the unpredictable, capricious, and inconsistent Washington, China is a more reliable partner for cooperation. Now, American citizens are anxious and angry due to tariff policies, stock market crashes, and looming inflation.

China has taken a series of countermeasures against the high tariffs imposed by the U.S. The U.S. will also suffer losses due to tariffs as some partners and customers turn to China to tap into its vast market and utilize its abundant labor resources. Spain recently announced plans to strengthen ties with China. French President Emmanuel Macron urged European enterprises to stop investing in the U.S. The EU will send a delegation to Beijing this summer. The UK, no longer an EU member, is moving towards reintegrating with mainland Europe and developing trade agreements with other medium-sized powers.

Another "ace" for China is that the commodities it imports from the U.S. (mainly agricultural products and raw materials) can easily find substitutes elsewhere, while the goods imported from China by the U.S. cannot. This means that for the U.S., engaging in a prolonged and intense trade friction with China carries greater risks.

Marta Bengoa, a scholar at City University of New York, said: "The U.S. depends more on China because it is much easier for China to obtain agricultural products from other places than for the U.S. to replace electronic products and machinery. For example, China has started purchasing a large amount of soybeans from Brazil, so ultimately China holds more initiative."

American consumers do not approve of the U.S. government's tariff blackmail against China, nor do American businesses and retailers. Most people worry about the potential inflation caused by tariffs, and many retailers will not be able to pass on the costs to their customers. Wall Street is dissatisfied with the government's reckless actions and its indifference to protecting the capital market.

In addition, the recent remarks by the U.S. president suggesting that the Federal Reserve chairman should resign because "he did not cut interest rates" sent chills down the market. A thought of the Fed being attacked and its chairman possibly being dismissed makes the market uneasy, as the Fed and its chairman underpin the value and influence of the dollar globally.

American tech professionals are also unhappy. Silicon Valley has large-scale manufacturing operations and a growing consumer market in China, closely linked to China. Since "Liberation Day," many important American entrepreneurs and organizations have headed to China. Most notably, after the U.S. government decided to impose indefinite export restrictions on Nvidia's H20 chips exported to China, Nvidia CEO Jensen Huang went to Beijing.

Nvidia's ban came suddenly and had a significant impact, not only because it harmed the core interests of a rising star in America's semiconductor chip sector but also because it demonstrated how unreliable the U.S. government's trade policies are. This established fact is now forcing companies to try to conduct business with both of these major countries.

The Financial Times of the UK further explained why the technology sector must take root in both the Chinese and American economies: "The technology industry is concerned that efforts to encourage more chip and electronics manufacturing to return to the U.S. will produce unintended consequences, hindering the development of companies like OpenAI, Google, and Microsoft, which are trying to outpace China's competitors in developing advanced artificial intelligence."

The U.S. government's tariff policies are now disrupting every aspect from global capital flows to supply chains and technological development. Who will be the winner in this trade friction initiated by the U.S.? No one. Who will be the loser? Everyone - whether "grass" or "elephant". (Author Diane Francis, translated by Wang Cong)

Original: https://www.toutiao.com/article/7496268952004231743/

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