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The Reaction To Tariffs In China


Do U.S. tariffs on Chinese products really put much pressure on China? Let's put that question a little differently. Do U.S. tariffs put much pressure on China's leader, Xi Jinping? That is a key question if President Trump's strategy is going to work as intended. China is retaliating for the latest round of tariffs on products coming to the United States, and China's Commerce Ministry accused the U.S. of causing an economic emergency. NPR's Beijing correspondent Anthony Kuhn has been covering this story all along, and he's in our studios today in Washington, D.C.

Anthony, good to see you.

ANTHONY KUHN, BYLINE: Good to see you too, Steve.

INSKEEP: Thanks for coming by. How do these tariffs look from China, which you've covered for so many years?

KUHN: Well, I think the threat of the Trump administration to impose an additional $267 billion worth of tariffs on Chinese goods...

INSKEEP: Oh, that would be the next round, which they're heading for. Yeah.

KUHN: Yes, that's right. If that happens, that would really be a new ballgame for several reasons. One, instead of focusing on certain kinds of products like high tech, which the U.S. has done because it's unhappy about the treatment of intellectual property in China, this would basically target all imports from China into the U.S. And that, I think, would raise questions about what the U.S. is getting at, whether this is inherently economic or political.

INSKEEP: Political, meaning some way to damage China's regime or even - what? - go for a regime change over time. Is that what you're saying?

KUHN: I think it would raise concerns about that. Also, it's going to raise questions about what China can do in return because, of course, China exports more to the U.S. than it imports from the U.S. It has a trade surplus. And therefore, it would not have a lot of room left for this sort of tit-for-tat retaliation. Either it...

INSKEEP: Oh, yeah.

KUHN: ...Would have to hit fewer goods with higher tariffs, or it would have to try something else - non-tariffs, some other kind of ways to make business for the U.S. difficult in China.

INSKEEP: Well, this is the President Trump logic here - the Trumpian logic, if you will - that the United States has the leverage because the United States is buying stuff from China, and China needs that business to continue. But as these tariffs begin to take effect and as more seem to be on the horizon, what are the actual political effects inside China?

KUHN: Well, as you can imagine, in China, it's very easy for them to just blame the U.S. for all this trade war, say that China is a victim; it's retaliating only because it has to defend itself. At the same time, you know, it's really interesting that they describe this as an economic emergency, as the commerce ministry put it. Well, who's responsible for this? There has been criticism that President Xi Jinping made a strategic miscalculation, that he misread Washington in all of this and that he bears some responsibility, that he was overconfident and got China into a fight it couldn't win before it was really ready.

Now, what evidence do we have of this? There's been some criticism from intellectuals, but there are also a couple of things that happened this summer. Let me just show you here. This is the front page of China's main newspaper, the People's Daily.

INSKEEP: You're holding this up. OK.

KUHN: Yeah. OK - and five stories, four pictures - all about President Xi Jinping.

INSKEEP: (Laughter) He's all over the front page. He's the only story.

KUHN: All over the front page, yep. This is what it's been like under Xi Jinping - until July. He suddenly disappeared. And this was widely interpreted as a sign of a split at the top, perhaps over the trade war.

INSKEEP: Well, maybe he doesn't want to be the face of government at the moment. Just got about a couple seconds left - but the bottom line here, China's authoritarian government stays in power by promising people prosperity. Is that prosperity seen, in some way, at risk here?

KUHN: No, it's not really clear. You know, the impact has not really been felt so widely in China economically. There haven't been waves of layoffs or bankruptcies. And trade with the U.S., despite the trade war, has actually been up in the first half of the year.

INSKEEP: Wow. OK, Anthony, thanks very much.

KUHN: You bet, Steve.

INSKEEP: NPR's Anthony Kuhn. Transcript provided by NPR, Copyright NPR.