Daily Management Review

Possible China Retaliation Over Trump Talk Signaled by Targeting U.S. Automaker


12/15/2016




Possible China Retaliation Over Trump Talk Signaled by Targeting U.S. Automaker
A sign of how Beijing could retaliate if President-elect Donald Trump upends decades of relations between the two nations is China's plan to punish a U.S. automaker accused of price-fixing.
 
A bedrock of U.S.-China ties that has underpinned the vast increase in trade and cooperation between what are now the world's two largest economies would be eroded by Trump's assertion that the United States need not be bound by the policy that Taiwan is part of "one China".
 
The kind of economic war that many feared could be launched by Trump's threat during the U.S. presidential campaign to slap tariffs of up to 45 percent on Chinese imports or outright military confrontation would not result from the disagreement, few expect.
 
Many analysts see Taiwan as the most sensitive part of the U.S.-China relationship and if Trump presses on the Taiwan question, a rising China has plenty of other ways to push back hard.
 
The official China Daily newspaper quoted a state planning official saying China will soon penalize an unnamed U.S. automaker for monopolistic behavior in what might be a shot across the bow of the Trump administration, due to take office on Jan. 20. Shares of General Motors Co and Ford Motor Co skidded even though the official said no one should read "anything improper" into this.
 
This specific investigation was already underway before Trump's recent comments, the media reported quoting auto industry sources.
  
But questions around whether officials might be seizing on the case to send a shot across the bow of the incoming Trump administration were raised by the manner in which it was announced, by saying only that it was a U.S. automaker before a formal announcement of fines.
 
Trump's team was aware of the report but it would be premature to comment, Jason Miller, a spokesman for Trump, said on Wednesday.
 
China's threat to fine the automaker was a "good sharp reminder" to Trump that "they have cards to play too and that if he is thinking that he can enter into negotiations - be it on Taiwan, trade, North Korea, whatever - as if the United States is the sole global superpower ... then he is going to need to think again", said a Democratic congressional aide in Washington.
  
"China welcomes foreign companies, including American ones, to invest in and operate in China. At the same time they must respect China's laws and rules. This point is very clear," ministry spokesman Geng Shuang said when asked by the media that if this was China sending a message to Trump.
 
"Taiwan policy is what China considers a core interest ... and it's prepared to go to great lengths to defend it," said Eric Altbach, senior vice president at the Albright Stonebridge Group consultancy in Washington and a former deputy assistant U.S. trade representative for China affairs.
 
The media quoted a U.S. official speaking on condition of anonymity as saying that Trump was not fully aware of the potential backlash from Beijing over his questioning of the "one China" policy was the consensus within the Obama administration. Trump had irked China by taking a phone call from Taiwan's president.
 
(Source:www.reuters.com) 






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