Tariffs will have ‘minimal effect on China’, says strategist

US_China_trade_warBecause it is no longer export-driven, China’s economy would survive US import taxes without significant damage, said an investment strategist. According to figures shared by Andy Rothman of asset manager Matthews Asia, net exports account for 2% of China’s GDP, down from 9% in 2007. Chinese exports to the US accounted for less than a fifth of its total exports last year, he added. “Because Trump would be fighting a trade war without the support of America's allies, the impact on China's exports would be relatively small,” said Rothman. Rothman’s prediction is for a short-lived tit-for-tat exchange without lasting effects. “I expect Trump to implement the first round of 25% tariffs on $34 billion of Chinese imports on July 6. Beijing will immediately respond with reciprocal tariffs (but nothing more),” he said. “Trump will proceed with the required public comment period for a second round of tariffs on another $16 billion of Chinese goods, and it is very likely that these will go into effect by early September. Beijing will immediately respond with reciprocal tariffs (but nothing more). Trump will talk about another round of tariffs on another $200 billion of Chinese goods. “The reciprocal tariffs on $50 billion of goods in both directions will have minimal impact in China.” ©2018 funds global asia

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