Economy - - Dec 13,2016
U.S. President-elect Donald Trump’s recent challenges to China and Taiwan over trade are rattling American companies who now wary of retribution from China.
Remarks by Trump that U.S. will not necessarily stick to its long-standing position (almost four decades) where Taiwan was considered a part of “one China”, has caused serious concerns among the Chinese media and administration.
U.S. companies have made enormous profits by maintaining stable relations with these two countries, but now fear retaliation from Beijing. Chinese foreign ministry warned that any comments that damages the principle of ‘One China’ could rupture diplomatic ties between the two countries.
Chinese state media called Trump “as ignorant as a child” and warned him using phrases like “pride goes before a fall”. There were endless rebukes from common people on Chinese social media as well.
Presently, more than 30 states have over $1 billion in exports to China and there is over $500 billion in commercial engagement by U.S. companies in China. All this would be at risk if Beijing retaliates with U.S. companies being on the chopping block. Not just capital and profits of conglomerates, this commercial engagement also supports thousands of American jobs that could get affected by Chinese action.
China has hit American goods with retaliatory tariffs in the past when disputes between the two nations flared. In 2011, it slapped duties on U.S. made large cars and sports utilities as part of a trade dispute.
The stakes are higher this time as Trump has looked to attack one of the most sensitive nerves of China. The largest of US conglomerates – automobile manufacturers like Ford Motors Co and General Motors Co, the retail giant Wall Mart Stores Inc, tech giants like Google and Apple, and heavy industries like aircraft maker Boeing Co are trading and investing billions and trillions in China.
According to the U.S. Census Bureau, the total value of U.S.-China trade in 2015 was $599 billion, of which $116 billion were exports to China, while U.S. companies imported $483 billion in goods from China.