America ratchets up the pressure in its trade war with China

CHINA’S PROPAGANDA machine grinds slowly. But its output is nothing if not consistent. It took more than 24 hours for state media to report President Donald Trump’s threats, tweeted on May 5th, to ratchet up tariffs on China. By that time Chinese stocks had already plunged, a foretaste of global market ructions. When the response finally came in official editorials, it was a familiar refrain from China’s canon of trade-war statements: “We do not want to fight, but we are not afraid to fight and, given no choice, we will fight.”

That sounds bellicose. Yet one lesson from the past year’s dispute with America is that China places more weight on the sentence’s first part, its desire to avoid a full-on fight. At multiple points when the Chinese government could have retaliated against America by targeting its businesses, it has instead tried to win them over.

Dodging a fight, though, does not mean giving in. As The Economist went to press, officials from both countries were preparing for talks in Washington to see if they could revive a deal which, until Mr Trump’s tweets, had seemed nearly done. The previous evening, America announced its intention to raise tariffs on $200bn of Chinese goods from 10% to 25% from midnight on May 9th. According to Reuters, citing American government...

via The Economist: Finance and economics Business Feeds

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