The consensus of almost all commentators in the US mainstream papers is that Trump has adamantly got it wrong - his tariffs are in fact US taxes on American consumers and factories - and not his con that other countries pay those taxes. In fact many of the older US steel and aluminium plants have folded because of the rise in raw metal prices.|
Secondly, there could be two reasons in the background why he threatened the 10% tariffs on the second tranche of China exports within one day after the Shanghai talks had ended:
(a) he was unhappy with the size of the US Federal Reserve's interest rate reduction by only 0.25% to about 2.25% and wanted to force Powell to reduce the rate more; the problem is central banks only reduce interest rates when an economy is not doing well or a threat to its performance looms over the horizon; thus, Trump adding pressure on Powell must mean his tariff weapon has not worked and he has been playing poker with peoples' sentiments:
Trump's first salvo of tariffs affected US manufacturers; his second salvo will next affect US consumers. The end result will be build-up of inflationary pressure in the US just when it runs out of workers who will next clamor for higher wages and thus reduce export competitiveness of US products, hence nullifying the cheaper US dollar effect from interest rate reduction to add to the counter-tariffs that other countries will impose in response to his tariffs, all of which thus being of no help to reduce any US trade deficit.
Furthermore his populist piggle will mean decoupling US manufacturers from other markets and when the US economy comes under self-generated contraction, those manufacturers will run out of overseas markets to make their pile in order to pay taxes to reduce the US' USD22 Trillion debt (https://www.usdebtclock.org/).
In short, he has dropped his tariff sledgehammer on his own foot:
(b) Nevertheless, he would be able to afford personal feet therapy since he would have known in advance Powell was about to drop the interest rate and therefore he could buy US shares before the market knew and sell them for a profit before his 10% tariff announcement which he would know in advance before those shares naturally fell in response to the tariff threat. It thus seems likely he didn't care a spit how both his US and the rest of the world would be affected by his threats and tirades and personal glory.
He decided peremptorily to hit China with the new 10% tariffs on the rest of her goods after the Shanghai talks had adjourned. This is enough proof he has added a threat before any conclusion of the talks so that he is acting like a schizophrenic - wanting a deal but derailing its process.
Given this inevitable conclusion, how should any country respond, let alone one such as China which has suffered so much from the idiosyncracies of such a vindictive bully who yet self-proclaimed himself as a stable genius?
> Keep channels open but do as done before - counter-respond - while initiating Plans B (to Z).
It's necessary because all of a sudden the US is now planning to install 5,500-km intermediate-range ballistic nuclear missiles in Asia after cancelling its INF nuclear treaty with Russia, thus raising tensions when there wasn't any in places faraway from the US mainland :
Could it be because of the Japan-SouthKorea trade 'tensions'? (huh). Perhaps Japan should remind the US that Japan was nuked twice by the US and any new nukes in the region may precipitate a hot conflict in NEAsia even if fired from Guam or Okinawa. Surely the spirits of those 300,000 Japanese (and American, Korean,etc WWII prisoners) won't stand for them; they may even 'argue' that the US already has nuke subs prowling the seas in the areas so why add land-based nukes which are anyway targets for massive retaliations covering wider circumferences thus resulting in more massive collateral damage to those unfortunate to live in the operating places.
There you have it: trade + dollar + military. One can discount the other one, 'human' rights, because what the US' CIA infiltrators have done to the minds of HK youths can be considered inhuman in the resulting destruction of the public property and business which were servicing and employing them. And the HK opposition who had received a large sum from the USD29 Million allocated by the US' National Endowment For Democracy (NED) should hang their heads in shame.
And it wasn't about trade disputes either. After all, WTO records show that over the last 22 years, the US has been the biggest culprit - losing 89% of a record 129 cases.
By coupling US monetary policy with his tariff weapon, Trump has just exposed he intends to use the successive reduction of US interest rates to buffer against the negative effects of his future imposition of tariffs.
Perhaps he will finally come to his senses when the US Federal Reserve runs out of interest rates to cut but that may not even happen before the US economy nosedives and brings his house down.
Then it may finally dawn on him that his advice to US citizens about 'short term pain for long term gain' was actually meant for countries like China.
Hence, China should carry on what she has been doing all along. And support Huawei and others to make China's 5G project the most successful in the world. It will be - since 5G in BRI alone will uplift millions throughout the world who have been displaced by history.