China Prepared for Trade War with USPosted: January 8, 2017
In its report “China’s chip policy poses risk to US firms and national security, White House says”, SCMP says that the US worries about China’s industrial policy targeting for leading position in semiconductor. That will give Trump justified reasons for a trade war with China.
China’s “options include subjecting well-known US companies or ones that have large Chinese operations to tax or antitrust inquiries”. “Other possible measures include the launch of anti-dumping investigations and scaling back government purchases of American products, according to the people,” says SCMP.
SCMP quotes Brian Krzanich, chief executive of Intel Corp. as saying, “Lowering the tax rates, making it easier for people to do manufacturing here, that’s what will bring manufacturing back to the US.” According to Krzarnich, US industry leaders do not want a standoff with China.
When this writer worked for a US law firm to help US companies establish joint ventures in China in 1980s, he often heard managers of US industrial firms complain the stringent product responsibilities on US industrial enterprises. That was a major reason why they had to move production to China.
Will Trump be so stupid as to start a trade war with China instead lowering tax and give other domestic incentives to US industries? That will test Trump’s wisdom.
Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at http://www.scmp.com/news/china/economy/article/2060207/chinas-chip-policy-poses-risk-us-firms-and-national-security.