Trade wars threaten Australia

When Donald Trump announced his first round of tariffs on China at a special ceremony at the White House last month, Chinese President Xi Jinping said nothing. Instead, China responded with a set of matching tariffs, on products such as soybeans, pork and cars – all targeted at farming and industrial areas, which Trump’s Republicans need to win at the coming US midterm elections. Trump doubled down and proposed tariffs worth US$100 billion, raising the prospect of a trade war between the world’s two largest economies.
 

On Tuesday, Xi broke his silence. In a speech at the 2018 Boao Forum for Asia, he tried to soothe tensions and – without mentioning Trump – warned that raising barriers leaves countries “assigned to the dustbin of history”. Xi’s various concessions were hardly new, but they allowed Trump to claim an initial victory (he sent a thank-you tweet).
Trump is taking on Xi in a game at which China excels. Neither nation will win a trade war, and the losses, which could be disastrous, would be experienced everywhere, not least in Australia.

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