Countering US Tariffs: China's Economic Strategy (Part 1)
"Some people see the devaluation of the yuan as a strategy to hedge against tariffs, but I personally don’t think this is effective." – Zhang Yansheng
Today’s edition features an excellent interview with Zhang Yansheng (张燕生), conducted by Mandy Zuo for the South China Morning Post. Many thanks to them for allowing us to share it here. Sinification will resume its weekly posts after the Christmas break. Wishing everyone a very happy holiday. — Thomas
Key Points
Trump’s threats to raise tariffs on China could either be genuine or just a negotiating tactic.
Implementing such tariffs would entail huge administrative costs, which might deter the new administration from imposing them.
If enacted, there is broad consensus in China to avoid a tit-for-tat response.
Although domestic pressure to retaliate could arise, Beijing will probably respond by strengthening its commitment to free trade.
However, this does not mean China would accept new tariffs passively; rather, it would seek ways to circumvent them.
Although a small faction of “extremists” in Washington advocates for tariffs, the broader American business community remains committed to tr…