China has threatened to cut iPhone sales and impose other trade measures against the U.S. if Donald Trump launches a trade war against it. A Communist party-controlled newspaper says Trump would be a “naive” fool to slap big tariffs on China. The U.S. President-elect has repeatedly accused China of stealing jobs from the American people and said Beijing would be punished with crippling trade measures.
But China warns America that such measures would bring disastrous consequences for the U.S. economy. The state-run Global Times published an article on Monday in which it warned that “a number of US industries” would suffer, including iPhone sales.
“Finally the new president will be condemned for his recklessness, ignorance and incompetence,” the newspaper said in an editorial.
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China threatens to cut iPhone sales and limit Chinese students in the U.S.
This is the first time China revealed what Trump’s big tariffs against Beijing would mean for Sino-U.S. relations. Trump, who became U.S. President-elect last Tuesday, previously vowed to punish China with “defensive” 45% tariffs on China’s imports.
“A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US,” the state-run newspaper warned.
If China cuts iPhone sales, it would be a major blow for the U.S. economy. At the beginning of 2015, Apple’s iPhone 6 sales were responsible for 10% of all U.S. economic growth, according to Investopedia.
Besides taking a hit from reduced iPhone sales, if China limits the number of its students studying in the U.S., it would also have a negative impact on the U.S. economy. The continued growth in the number of Chinese students coming to the U.S. to study had a positive economic impact on the country, according to the Institute of International Education. In 2015, international students contributed more than $30.5 billion to the U.S. economy. Official numbers provided by the Project Atlas showed that there were as many as 328,547 Chinese students enrolled in U.S. universities in 2015-16, accounting for a whopping 31.5% of the total international student enrollment.
Donald Trump on the verge of starting a trade war against China?
The newspaper also warned that any trade measures taken against China would trigger a “tit-for-tat approach” from Beijing.
“Making things difficult for China politically will do him [Trump] no good,” The Global Times wrote.
China’s officials have long criticized Trump for his intentions to start a trade war against Beijing. China’s foreign ministry has so far been cautious in its comments about Trump, hoping that his anti-Beijing rhetoric was just a way to attract more supporters in the U.S.
The state-run newspaper’s article was published hours after Trump spoke with his future counterpart, Chinese leader Xi Jinping. China’s leader congratulated the U.S. President-elect on his victory and sent his best wishes.
“During the call, the leaders established a clear sense of mutual respect for one another, and President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward,” a statement from Trump’s team read.
Tense China-U.S. relations would damage both
Despite Xi’s diplomatic language during the call to Trump, high-ranking officials in Beijing are still concerned about the U.S. President-elect’s policy towards China. Diplomatic relations between the U.S. and China directly depend on their trade relations. Let’s not forget that the two countries are the world’s two largest economies.
But once Trump imposes his 45% tariffs on “cheating China,” Sino-U.S. relations will inevitably take a turn to the worse. Both American and Chinese experts agree that Trump’s protectionist measures against China will not enhance the U.S. economy. In fact, they will only harm the economy (those iPhone sales cuts could do much of the damage alone).
American and Chinese experts argue that Trump’s anti-China trade measures would negatively affect U.S. companies and the economy as a whole. However, experts still haven’t lost hope that Trump’s harsh anti-China vows will be quickly replaced by more realistic and diplomatic talk as soon as he enters the White House.
It doesn’t matter how hell-bent Trump might be on “making America great again;” China is the key player in some of the most crucial global issues, including climate change, North Korea, trade ties, Iran nuclear deal and many more. Putting a strain on Sino-U.S. relations would mean reducing the chance of negotiating good deals for the U.S. in key global issues.
Two ways Trump can impose big tariffs on China
The bad news for Apple and its iPhone sales is this: Trump doesn’t even need Congress’ approval on his big tariffs against China. While the Constitution gives Congress the right to impose tariffs on other countries, it’s not only Congress that has the right to do so.
There are several tricky laws that allow the U.S. President to impose tariffs on other nations on his own. Although it’s more likely that Trump will seek Congressional votes to slap big tariffs on China, there are still two ways he could do it without help from Congress.
First of all, Trump could invoke the “Trading with the Enemy Act of 1917” to set big tariffs against other nations. The law states that the President can restrict trade with other countries “during time of war.” But here’s the thing: the U.S. doesn’t necessarily have to be at war with China for Trump to impose his desired 45% tariffs on Chinese imports. The definition is so loose that America can be “at war” in any part of the world, while Trump can impose tariffs on any countries he wants. In fact, some political experts believe that having U.S. special forces deployed in Syria and Libya is already enough to invoke the law.
Second of all, the International Emergency Economic Powers Act of 1977 would give Trump the freedom to slap other nations with tariffs of any kind. Under the law, the President has the right to impose tariffs on other nations during a “national emergency.” Since the courts have never dared to reject a president’s reasoning, Trump could use America losing jobs to China as a national emergency.