China has not been taking the imposition of US tariffs on its goods lightly. In fact, leaders have reacted with an efficient fury to put their own tariffs in effect. While the tensions between the two countries have been increasing, one Chinese official showed a sense of humor by saying “Huawei cut Apple into pieces.” This report comes from Yahoo Finance.
“Huawei cut Apple into pieces”
The statement was taken from a tweet by Zhao Lijian. He serves deputy chief of mission at the Chinese embassy in Islamabad. His tweet revealed his ability to see some humor in the whole situation. “It has been just revealed why @realDonaldTrump hated a private company from China so much. Look at the logo of Huawei. It has cut APPLE into pieces…”
Historically, the Chinese market has been relatively isolated from international investors, but much is changing there now, making China virtually impossible for the diversified investor to ignore. Earlier this year, CNBC pointed to signs that Chinese regulators may start easing up on their scrutiny of companies after months of clamping down on tech firms. That Read More
BREAKING: It has been just revealed why @realDonaldTrump hated a private company from China so much that it went so far by announcing a national emergency. Look at the logo of Huawei. It has cut APPLE into pieces… pic.twitter.com/KOXstlAsja
— Lijian Zhao 赵立坚 (@zlj517) May 20, 2019
America vs China – Is there a deficit?
The US has imposed more than $250 billion in tariffs on China. This seems like an extremely high amount, until you look back at the trade history between the two countries. While it may be true that Huawei has cut Apple into pieces, China has been on the profiting end of trade relations with the US for many years.
According to The Balance, China owns more than 1/4th of the US national debt to foreign countries. This is largely due to the amount of trade between the two countries, and how much China profits from those trades. In 2018 alone China profited by more than $400 billion in trade relations with the US. The deficit comes from sectors like cell phones, computers, clothing, and accessories. The goods are typically made with materials shipped from US manufacturers to China for cheap assembly. However, once assembled and shipped back to the US, they are considered to be imports. So, while Huawei may have cut Apple into pieces, China has been steadily slicing into the American pie for her own piece of profitability.
Bans on Chinese Products
Chinese phone maker ZTE was banned in the US last year, after it was learned the company had sold goods to Iran. The US has no trade relations with the country, and recently named the Iranian Revolutionary Guard as a terrorist organization. When the Chinese company supplied Iran with electronic devices, the US saw that as an affront to the long standing relationship between our nations. The remark that “Huawei cut Apple into pieces” comes after Google initiated a ban of its own this week. The tech giant banned Huawei from accessing its Android OS in the future, effectively handicapping the sales of Huawei devices on the global market. Huawei has been working on development of their own OS, but it is doubtful it can compete with iOS and Android on a global scale.
Chinese Response to Tariffs
President Trump has imposed tariffs in a step by step fashion, hoping to get the Chinese to cooperate. However, Xi Jinping cannot afford to simply back down in this standoff. His political position could be at stake, so he must remain steadfast in his resolve. Because of this fact, he has fired back at the US with tariffs of his own. The nation has also refused to purchase imported soybeans from the United States, which have been one of our biggest exports to the nation. All in all, Huawei cut Apple into pieces, but the big picture shows China having a huge advantage over the US in terms of profitability. It remains to be seen how this trade leveraging between the two leaders will actually play out.