China imports only about $120 billion of goods and services from the US, so the Chinese government can’t match Trump’s new proposed $200 billion tariffs dollar-for-dollar. Of course, China doesn’t have to retaliate and continue this trade war, but egos and nationalism rule geopolitics. So, here are ways how China can punch back:
- Increase the tariff rates on US goods. So, rather than 25% extra tariffs on soybeans, turn it up to 40%, for example.
- Stop buying certain US products: In 2017, China was the second largest buyer of US oil, importing 81 million barrels of oil. That’s a lot of leverage.
- Boycott US products and businesses in China. Just to give an idea, Nike sells $4 billion worth of shoes in China; Apple sells more iPhones in China than in the US; GM sells 4 million cars in China; and there are 3,000 Starbucks stores…
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