Trump has miscalculated China's pain threshold

US President Donald Trump takes part in a welcoming ceremony with China's President Xi Jinping in Beijing, on Nov 9, 2017. PHOTO: REUTERS

US President Donald Trump said that the United States would be collecting tens of billions of dollars in tariff from China and that he would use the money generated to buy up agricultural products to distribute to starving people worldwide (Trump claims US has upper hand in trade war with China, May 14).

He also warned that China would be hurt very badly if it did not make a deal because companies would be forced to leave for other countries.

He may claim to have the upper hand but today's China is a very different one from what it was in the 1800s and 1900s. The US President's statements may just backfire.

China could have walked away from the last round of negotiation when the US failed to uphold the principle of negotiation - of give and take with compromises in the interests of both parties.

China's top trade negotiator, Vice-Premier Liu He, revealed three unacceptable items: disagreement over tariff removal; forced US imports to China beyond its needs and disregard for China's sovereignty and dignity.

The Trump team had only a demand list with no inducements to counterbalance unreasonable terms. It is all sticks, and no carrots - even unwilling to dismantle the tariffs once the deal is done.

The US administration failed to appreciate the remarkable resilience of the Chinese people who worked hard to achieve what China is today.

It did not steal its way up the economic ladder. China paid about US$30 billion for technology transfer in 2017 alone.

China underestimated Mr Trump's camouflaged intentions to inflict deep and lasting harm on its economy while Mr Trump underestimated China's capacity to weather the challenges caused by the tariff war and how China could retaliate to undermine US long-term dominance of the world economy.

Cutting multi-billion dollars of US export services in finance, IP products, tourism and education are part of China's arsenal. It could even ban exceptionally rare earth export for national security reasons.

It is very unlikely that high value-added industries could move out of China in the next five years because no neighbouring country has comprehensive facilities of integral production chains.

Paul Chan Poh Hoi

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